Seven Signs of a Healthy Organization

March 19, 2009

Suppose you made a trip to the doctor’s office for a checkup. Seated in the waiting room, you reach for a magazine. Just then, the doctor strolls in and approaches you. “How do you feel?” the doctor asks. Feeling a bit confused, you mumble something like, “Okay, I guess.” The doctor gives you the once-over and says, “You look fine to me.” With a nod, he turns to leave. “I’ll see you again next year.”

While you might wish all visits to the doctor were this simple, you probably would believe the examination was far from complete. And you probably wouldn't know any more about the status of your health than you did before the visit.

And yet, often that’s the extent of scrutiny we give to the organizations we manage.

Most of us have an internal gauge that we rely on to tell us how things are going. For example, you might think to yourself, “My unit is running extremely well,” or “My unit is doing okay,” or “Things aren’t going well in my unit right now.”

The gauge doesn’t tell us a whole lot. It’s just an overall reading - a gut feeling, if you will - of how well (or poorly) things are going. For example, it doesn’t tell us anything about how to build a stronger, healthier organization. And it offers no help in finding the root cause of problems. For that, we need more accurate readings from instruments with greater precision.

Vital Signs

The place to begin is to look at a few key indicators of your department's or team's health. Think of these indicators as vital signs. That is, they don’t tell you everything you need to know about the health of your organization, but they can still be helpful in identifying those areas that are working well and those that require further analysis.

To help you get started, I have provided seven such indicators, which I’ve structured in the form of a self-assessment.

(Incidentally, I originally began with a total of eight indicators. However, due to the current employment situation, I dropped 'Retention of Key Employees' from the list. Very few organizations are experiencing significant turnover these days).

INSTRUCTIONS: Read the description for each of the following seven indicators. Then, on a scale of 1 to 5 (where 5 is best) , assign a number of points for each indicator. When you have finished, add up the points and enter the total at the bottom.

The scores are somewhat arbitrary, of course. They represent your subjective assessment at this time. Still, it’s a good place to start.

1. Productivity - Getting the most out of your workers.

Signs of strength: Work output is high, the unit as a whole consistently meets targets and work quotas; work is performed efficiently.

Signs of trouble: Deadlines are missed or quality is occasionally substandard; some individuals are not carrying their fair share of the workload; occasional backlogs; customer complaints about slow service.

Points_______ (1 - 5, where 5 is best)

How to improve in this area: Provide clear standards for performance. Provide effective training. Assess organizational procedures and practices to determine if any are getting in the way of performance. Look for ways to streamline the work.

2. Employee Satisfaction - Keeping people happy.

Signs of strength: People express satisfaction with their jobs; complaints are minimal. People are attentive to the work.

Signs of trouble: frequent complaints; rude behavior toward customers or coworkers; excessive socializing, goofing off, or other forms of work avoidance; the presence of rumors and innuendo, high rates of absenteeism,

Points_______

How to improve in this area: Make sure people are well matched to their jobs, taking into account their temperament and abilities. Make sure people have meaningful work. Give workers flexibility to determine for themselves the best way to perform the job. Establish clear lines of communication; provide sufficient opportunity for workers to express ideas and needs.

3. Teamwork - encouraging people to work well together as a team.

Signs of strength: People trust one another and treat each other with respect; workers frequently offer help to one another and contribute freely to the team effort. People are encouraged to speak their mind; workers routinely offer ideas for improvement;

Signs of trouble: Workers perform their own jobs, but are reluctant to volunteer for additional assignments; workers are reluctant to offer help to one another; some have been known to say, “It’s not my job;” there are occurrences of turf wars, cliques, or jealousy;

Points_______

How to improve in this area: Explain how each person’s job contributes to the overall mission of the organization. Assign each person a meaningful role on the team. Highlight each individual’s personal strengths and contributions. Avoid the perception of favoritism. Provide mechanisms for resolving conflicts.

4. Organizational pride - helping people become good organizational “citizens.”

Signs of strength: Workers express pride in working for the organization; they talk positively about the company inside and outside of work; they encourage their friends to apply for jobs with the company; they enjoy socializing with one another; and they embrace the values of the organization.

Signs of trouble: worker complaints about company policy or gripes about upper management; active or passive resistance to change efforts; disciplinary problems.

Points_______

.How to improve in this area: Emphasize the importance of the mission of the organization and its role in society; explain what the organization stands for; explain why it is a great organization to work for; refrain from criticizing company policies or upper management; communicate employee concerns to upper management;

5. Cost Effectiveness - getting the most out of physical and financial resources.

Signs of strength: Workers have the supplies and resources they need to perform well; people are well trained; workspace is adequate and well-designed; money is spent wisely, cash reserves are sufficient to address unforeseen emergencies.

Signs of trouble: tools or equipment are outdated or in disrepair; training is inadequate or unavailable to those who need it; people are overworked due to insufficient levels of staffing; signs of wasteful spending; a chronic shortage of cash reserves.

Points_______

How to improve in this area: Look for more cost-effective ways of performing the work, especially in the area of technology and work procedures; carefully analyze the costs and benefits before undertaking any major effort; have a business reason for every decision; look for low-cost ways of doing things.

6. Customer Satisfaction - making sure customers are satisfied.

Signs of strength: Customer satisfaction is measured and documented through surveys and other instruments; the customer experience is well understood; customer testimonials and referrals.

Signs of trouble: customer complaints are disproportionately high; few mechanisms in place to obtain customer feedback or measure customer satisfaction; competitive inroads; loss of long-time or important customers.

Points_______

How to improve in this area: talk with customers to identify their needs and perceptions; experience your organization’s services as if you were the customer; provide a mechanism for obtaining ongoing customer feedback; provide training in customer service.

7. Value to the organization - making your department or team invaluable to the organization.

Signs of strength: The contribution made by your department or team to the organization as a whole is clear and impressive; workers have a clear understanding how their work contributes to the overall mission of the organization; the department or team has the support and commitment of upper management.

Signs of Trouble: weak support by upper management; value contributions to the organization as a whole are unclear or minimal; all or portions of your function could be outsourced.

Points_______

How to improve in this area: Talk with your boss to learn about his or her perceptions of your department or team; inform upper management of your department or team’s accomplishments and contributions; establish close working relationships with other departments, divisions or teams in the organization; continually search for more cost-effective ways to do things.

Total points:________________

This instrument should give you some basic information about the overall health of your department or team. While it doesn’t reveal the underlying causes of any organizational problems, at least it gives you a starting point for further analysis.

So, let’s have a look at your total score.

Based on your assessment, here is my professional opinion.

27 -35 -- Congratulations, you’re doing well. See you again next year.

17-26 -- Don’t panic. With the right treatment, you can still build a strong and healthy organization.

Less than 17 - You need to see a specialist.