In our culture development keynotes, workshops, and retreats we’ve been citing research from the largest study of organizational effectiveness ever undertaken. A few years ago McKinsey & Company published their extensive research in Beyond Performance: How Great Organizations Build Ultimate Competitive Advantage (click here for my book summary and review).
The research study identified nine elements that combine to support and sustain high-performing organizations; Leadership, Culture and Climate, Direction, Accountability, Coordination and Control, Capabilities, Motivation, External Orientation, and Innovation and Learning.
A recent article in McKinsey Quarterly updated the research. “The Hidden Value of Organizational Health – and How to Capture It” shows that the payoffs from organizational health is even larger than found in the original research. The authors also report on four combinations or “recipes” that when companies were strongly aligned on them “were five times more likely to be healthy and to deliver strong, sustained performance than companies with mixed (or random) recipes.”
The four practices are clustered around Leader Driven, Market Focused, Execution Edge, and Talent and Knowledge Core. Three of these clusters include factors such as career opportunities, inspirational leaders, open and trusting, employee involvement, bottom up innovation, talent development, rewards, and recognition, and personal ownership. These factors are generated by strong leadership and high performance cultures.
In looking at how to increase effectiveness this research strongly correlates with our work on strengths-based leadership in three key areas:
1. “…fix all broken practices (by improving them enough so that a company escapes the bottom quartile)” is very similar to our findings that leaders must address any Fatal Flaws before trying to build strengths.
2. “Trying to exceed the median benchmark on a large number of practices is not effective” parallels our research showing that focusing on improving a number of leadership competencies is much less effective than focusing on one strength at a time and building it to the 90th percentile.
3. Developing strengths “increase the probability of building a healthy organization by a factor of five or ten” is very similar to our research showing that building 3 – 5 strengths will put a leader in the top 10 – 20 percent of all leaders.
The evidence keeps growing; building strengths is the pathway to peak personal, team, and organizational performance.