People First

People First -Toward Better Ways, Increased Value and Secure Futures

Organizational health comprises three elements: how well the entire organization rallies around a common vision and strategy, how well the organization executes its strategy, and how well the organization innovates and renews itself over time – toward better. It’s about people.

Over the long term, healthy organizations deliver three times the total shareholder returns (TSR) of unhealthy organizations, regardless of industry.1

According to our research, organizational health – “people first” - is the strongest predictor of value creation and a critical factor in sustained competitive advantage. In one evaluation of 1,500 companies in 100 countries, for instance, we saw that companies that had improved their organizational health realized 18 percent increases in their EBITDA after one year.

Health and M&A. In merger situations, healthy organizations—those that applied various health interventions during the integration phase and emphasized organizational health throughout the integration—gained a 5 percent median change in TSR compared with industry peers after two years. The change for unhealthy companies was –17 percent over the same period.

Health and transformations. In large transformations, companies that embedded organizational- health investments and initiatives in their change programs across an 18-month period saw 35 percent higher TSR than companies that did not invest in health.

Health and resiliency. Healthy organizations are not just higher performers, they are also more resilient and better able to manage downside risk. For instance, from 2020 to 2021, during the COVID- 19 pandemic, healthy organizations were 59 percent less likely than unhealthy organizations to show signs of financial distress.

Health and safety. Companies with superior organizational health are better able than their peers to provide safe work environments, thereby limiting their exposure to financial, operational, and reputational risks. Indeed, companies in the top quartile in organizational health have six times fewer safety incidents than those in the bottom quartile.

1. Leadership is undergoing a generational transformation - Values, COVID, AI, Meaning

It’s fair to say that few—if any—executives anticipated the deeply disruptive business (and societal) changes that would emerge because of the 2020 global pandemic and the speed at which organizations needed to transform themselves. As they have reckoned with changes in where and how work gets done, leaders are learning that they need to be both decisive and empowering.

It calls for a paradigm shift in leadership and, among other new requirements, the need for executives to shift from being controllers to becoming coaches who engage employees and help foster in them a bold mindset of testing, learning, and fast adaptation.

We believe sustainability in its broadest sense – and “people first” in its relentless daily pursuit – are increasingly imperative issues.

2. Data is the fuel for everyday innovation - The Oil of the Information Age

Leaders have traditionally thought of innovation as a process for bringing “the next big idea” to life. But our latest data reveal that companies are more likely to succeed with innovation initiatives if “big bang ideas” are supported by data-driven insights and supplemented with smaller, more frequent ideas that target improvements in everyday processes or ways of working. Little things add up. The more customer-connected the data, the more effective the efforts to find better ways. And the better the conditioning for resilience, adaptation, and creating secure futures.

3. The dynamic deployment of talent – the heart of people first - is becoming even more of a competitive advantage

Companies that encourage and even facilitate internal role changes – cross training, rotations, mentoring, developmental assignments - can sharpen employees’ skills, maximize their versatility, encourage learning and provide avenues for growth. According to our findings, employees that experience more mobility and variety at work are 27 percent less likely to report feeling burned out, 47 percent less likely to report intentions to leave their organization, and 2.3 times more likely to recommend their companies to others.

Core people first practices include:

• Strategic clarity. Healthy organizations effectively translate vision and strategy into actionable and measurable objectives that are clearly articulated and shared with employees at all levels. Reinforced through an operating system that is plan, deploy, review. Learn. Rinse and repeat.
  
• Simplify and Empower. Healthy organizations tend to have structures, processes, and working norms that speed up decision making, remove layers of bureaucracy, and make it easy for employees to get things done—even when situations are new or ambiguous.
  
• Personal ownership. Healthy organizations hire and develop managers who have a deep sense of personal ownership for their work and who foster that same sense of ownership in their teams and employees. Caring counts. Recognition is the secret sauce to promote accountability and ownership.
• Customer-Connected Culture. Healthy organizations tend to have a clear view of where and how they fit in the competitive landscape and of their value propositions; they use these insights to set strategic priorities, make decisions, and allocate resources...and undertake intelligent experiments to gain results and learning.

PEOPLE FIRST SURVEY – Overview

These questions address the areas that are most central to attracting, retaining and growing a competitive workforce. So well trained and cross-trained they could work anywhere. So well led they thrive, prosper and grow. They map directly to People First levers.

Please give your most honest and accurate response to these questions about your daily experience at work. (Note: response scales are 1 to 6 on agree/disagree scale. )

1) There is no favoritism in my work group.

2) I have a clear understanding of what I’m expected to achieve in my job.

3) Most of the time, I get to do work I’m challenged by, good at and enjoy doing.

4) My manager operates with honesty, integrity and fairness.

5) People here tell the truth and keep their promises.

6) My manager expects me to suggest/helps me find better ways to get things done.

7) When things go right (or not) I know quickly what numbers go up or down.

8) We have a clear, elevating purpose in this company - we do work that’s worth doing.

9) Most people I know here are capable, committed, and caring.

10) Taken together, the pay and benefits programs here are distinctly above average.

11) Work problems (and bad apples) don’t last long around here.

12) My workload is managed, so I can get things done without undue or extended stress.

13) I like what this company stands for on the social issues that affect us all.

14) There are plenty of resources to support my development, ways to get involved in new things, encouragement to learn and grow.

15) This company does a good job of supporting peoples’ well – being.

16) I feel in the know about company priorities, direction and strategy.

17) I routinely recommend good people I know to apply to work here.

18) I see evidence that we have the capacity to improve, innovate and change wisely.

19) I am well recognized for my contributions.

20) I’m in the loop on what’s going on around here.