Organizational Health and how to measure it
If there's one thing we can all agree on, it's that our workplaces have changed. We continue to experiment with new ways of work. Do we go full remote? What version of hybrid work is best? And how do we know what's working and what isn't?
Businesses of all sizes are forced to innovate, create new revenue streams, and simultaneously focus on survival and growth. Existing capabilities, resources, and processes fail to serve the new mission. People must work together to create, innovate, and problem-solve.
What do you know about your people and their ability and willingness to contribute to your latest goals? How are they coping with the risks and challenges thrust upon them? Are they getting the right help and support at the right time?
The measurements we have in place are outdated; what used to serve us as indicators for business health and performance (e.g., P/L statements, KPIs, and annual employee engagement scores) are not sufficient nor effective. At Happily.ai, we measure pretty much everything and study what impacts people and business performance most. Here's what we found to be the key metrics to manage organizational health.
1. eNPS
You should measure eNPS quarterly by asking the following question:
On a scale of 0 to 10, how likely are you to recommend your workplace to others?
This adaptation of the NPS® for employees is a useful proxy for employee satisfaction. Promoters (those who answer 9 or 10) are key to attracting talent to your organization. Detractors (those who answer 0 to 6) are threats to your engagement, productivity, and your ability to retain and attract talent.
A follow-up question for those who respond six or below is recommended:
What is the number one reason you're unwilling to recommend our company to others?
You may not be able to make changes to satisfy all detractors, but you may find a common thread that you can work to solve. Also, hearing them out, managing expectations, and clearing up misunderstandings can go a long way.
A hospital CEO was surprised to find many detractors among eNPS respondents. The follow-up question helped him learn that many who were unlikely to recommend the workplace responded that they preferred keeping friends separate from work; it had nothing to do with the hospital's work environment.
2. NPS®
You should measure NPS internally every quarter by asking the following question:
On a scale of 0 to 10, how likely are you to recommend our products and services to others?
A staple metric to study customer satisfaction, NPS can also be a valuable tool to understand employee attitudes. Your employees should be the most prominent advocates for your product and services, but are they?
A technology startup found their customer-facing teams (sales and customer service) had critically low NPS. Day-in-day-out questions and feedback from sales prospects and existing customers wore down confidence in the company's products. These interactions invariably affected performance —how can you sell a product you didn't believe in? Company leaders quickly renewed confidence by managing expectations, aligning on a better-fit buyer persona, and acting on feedback, which led to a turnaround in productivity.
3. Well-being
You should measure employee well-being every quarter by asking the following five questions:
In the past two weeks:
- I have felt cheerful and in good spirits
- I feel calm and relaxed
- I feel active and vigorous
- I wake up feeling fresh and rested
- My daily life is filled with things that interest me.
Options: Strongly agree (5), Agree (4), Slightly Agree (3), Slightly Disagree (2), Disagree (1), Strongly Disagree (0)
It is futile to expect engagement, productivity, practical problem-solving, or initiative from employees with low well-being. Low well-being affects our rational decision-making, energy levels, and capacity for empathy and compassion. If your workplace and culture contribute to low well-being, fixing these issues should be your number one priority.
Each person may require different interventions to improve well-being.
4. Culture
You should measure the strength of your culture at least bi-yearly by asking the following five questions:
- I understand how our company culture supports our long-term success, and it makes sense
- Our company values help guide my decisions and actions at work
- We act quickly to uphold our core values
- I have the ability and opportunity to act according to our core values
- The actions of our leaders and managers are consistent with our company values
Options: Strongly agree (5), Agree (4), Slightly Agree (3), Slightly Disagree (2), Disagree (1), Strongly Disagree (0)
"Culture eats strategy for breakfast" —Peter Drucker.
A strong culture is your most potent lever to improving your employees' well-being, performance, and effectiveness. Having a mission and a set of core values isn't enough. Company leaders need to make sure that:
- Employees understand how the company's core values contribute to the company's success.
- Employees have role models (leaders and managers) who behave according to the core values.
- Employees participate in reinforcement when actions align with core values.
- Employees have the necessary skills to act according to values.
Cultivate positive cultural leaders in your organization, and actively seek out and eliminate detractors who are toxic and can derail your positive leadership efforts.
5. Employee sentiment
You should measure the sentiment of your employees at least monthly (or every day with Happily.ai) by asking:
How are you feeling today?
This simple question is powerful when asked regularly. Look for changes in the individual, team, and organizational sentiment and proactively learn about what's going on. You are systematically building empathy in your organization.
Whether related to work or not, sentiment is an effective predictor of day-to-day productivity. It is hard to be at our best when we're not feeling well. A person indicating that they're not feeling well for a sequence of days is signaling that they need extra help and support. Without intervention, they're at risk of leaving. At Happily.ai, we predict attrition at greater than 93% accuracy by analyzing this metric alone.
What Leaders can do
Business leaders must lead the initiative to measure and manage organizational health. Getting timely insights in the right hands can make HR a strategic partner, people managers more empathetic, and employees proactive. You're setting up a regular feedback loop that will help you understand your people and their ability and willingness to contribute to your latest goals, how they're coping with risks and challenges, and if they're getting the right help and support.
- Send out a survey to your employees with the five sets of questions.
- Gather and share the results with your entire company.
- Communicate your plan and priorities for the changes you want to see.
- Set measurable goals and share accountability.
- Regularly work with your management team to enact changes and track progress.
These measurements may take you a few hours to set up but can save you months of productivity loss from low engagement, unwanted employee turnover, and more. If you're interested in bringing these measurements and continuous improvement to your workplace, I invite you to check out our work at Happily.ai.
Net Promoter®, NPS®, NPS Prism®, and the NPS-related emoticons are registered trademarks of Bain & Company, Inc., Satmetrix Systems, Inc., and Fred Reichheld. Net Promoter Score℠ and Net Promoter System℠ are service marks of Bain & Company, Inc., Satmetrix Systems, Inc., and Fred Reichheld.
