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Measuring Organizational Health

Most construction companies track A LOT of metrics... revenue, net profit, overhead costs, safety incidents, schedule adherence, production, new work, current bid list, etc... like I said, A LOT. Many track several people metrics as well, like headcount, hires, turnover, etc. Unfortunately, not enough companies track the metrics that provide a glimpse into the overall health of an organization.

So what is missing?

To answer that question, you must first take a step back and answer what is organizational health?

According to McKinsey, organizational health is "the organization’s ability to align around a common vision, execute against that vision effectively, and renew itself through innovation and creative thinking." In other words, the ability to achieve one's vision no matter who is in charge.

So how do you measure organizational health?

If you were to ask McKinsey, they would recommend that there are 37 management practices that drive 9 organizational outcomes.

Seems like a lot!

I agree. I trust that McKinsey knows their stuff and for organizations that are ready to go all in, I say go for it, more power to you!

For the rest of us, that don't have the time, money, or support to go all in, but still want to improve the metrics you track, then read on...

Key First Two Steps

Before you add any new metrics to your dashboards or reports, first look at your vision and business goals. How will you know that you are on track to achieve them? For example, if your goals includes the diversifying of your workforce, but you have never measured this before, start by defining what diversity means for you, then track where you are. This could mean you track overall gender or racial diversity percentages, but it could also mean that you track racial diversity tenure over time.

Next, be sure that the metrics you are track are tied to a business problem you are looking to solve. This next step is about being strategic with what you track, and not including metrics just because you can. For example, if you are struggling to hire the right talent, focus your efforts on learning more about the candidate experience versus on training completions.

If your metrics are tied to your vision and are helping you solve problems, you are on your way to measuring your organizational health!


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