Organizational health is (still) the key to long-term performance

This is an excellent read from McKinsey. It turns out that, unsurprisingly, organizational health is (still) the key to long-term performance:

McKinsey’s Organizational Health Index (OHI) continues to show, for instance, that, over the long term, healthy organizations deliver three times the total shareholder returns (TSR) of unhealthy organizations, regardless of industry. Other findings point to greater resilience and higher financial performance in healthy organizations, even as the world around them has become that much more complicated.

This bit particularly resonated with me:

According to the OHI research, companies with leaders who take decisive actions—and who commit to those decisions once they are made—are 4.2 times more likely to be healthy, as compared with their peers.

But it’s not enough just to be fast with those decisions; our OHI research shows that decisive leaders who empower their employees (giving those closest to the work the autonomy to make their own decisions) are 85 percent more likely to improve the quality of organizational decisions, as compared with their peers.

I’ve long been a fan of the adage “move decision-making to those closest to the data”. This research shows how important that continues to be for companies to succeed and employees to remain happy and fulfilled.