Using Strengths to Increase Organizational Health

Authored by Matt Hommel

Using Strengths to Increase Organizational Health

 

According to management expert, Patrick Lencioni,  "Organizational health is the single greatest competitive advantage in any business."

 

There are many definitions out there about organizational health, and for the record - organizational health does not mean your employees can run a 6-minute mile, or bench press their bodyweight for multiple reps. 

 

McKinsey & Company describes organizational health as a company's ability to:

 

  • Align around a clear vision, strategy, and culture
  • Execute with excellence and efficiency 
  • Renew the organization’s focus over time by responding to market trends and remaining relevant through innovation

 

The reality is that organizational health leads to things like higher Individual well-being, employee engagement, productivity, health, employee retention, and overall increased business performance & profits. 

 

In fact, McKinsey also reveals that healthy companies significantly outperform their competitors by upwards of 3 times the returns for shareholders than the organizations who aren’t healthy.  

 

So how do you increase organizational health?

 

Well… there are certainly a lot of ways to make an organization more healthy and increase profits… 

 

One of the biggest advancements of organizational health is Strengths-based development. 

 

Organizations that are strengths-based are exceptionally healthy, and experience significantly more overall profitability. Meanwhile, they also maintain a happier overall work environment, and lower the turnover percentage of exceptionally talented high-performers. 

 

Strengths is a business strategy, not only for attracting, retaining, and developing top talent, but increasing overall business outcomes as well. This is because Strengths has been shown to be one of the biggest ways to increase employee engagement. High engagement has been correlated with nearly every important measure of organizational health.

 

So how do you take this approach?

 

The first thing you need to do to take a Strengths-based approach is if you haven’t already, invest in one of two Strengths Finder tests. There are more, but these two are the ones that I highly suggest and the ones that will offer you the biggest ROI. One of these does cost money, but is backed with decades of sound research, and offers you a customized report, as well as many other featured benefits. The second one is totally free, but does not offer a debrief or report afterwards… unless of course, you wanted to do some Coaching after taking the test. 

 

The two tests are:

 

  1. StrengthsFinder 2.0 test (this is the paid test)
  2. High5test (this is the free test)

 

If you have already taken one of the two tests, then great! You are already on the right track, if you haven’t, be sure to take one of the tests. After taking the tests, the most important thing is actually being able to apply these Strengths to increase engagement or organizational health. One of the best things you can do is get a coaching session to walk through your strengths, or seek out a coaching engagement over a period of sessions to learn more about how you can utilize your strengths to increase performance. 

 

Now remember, Strengths is a business strategy, not just for the entire organization collectively, but also for an individual as well. 

 

Strengths-based benefits for the individual

 

Individuals who are aware of, and know how to use their Strengths, are 6 times more likely to be engaged at their jobs, and 3 times more likely to experience a better overall quality of life. In essence, strengths help you become a happier, higher-performer. 

 

The importance of working with a coach with Strengths, is that many times we can misinterpret our own Strengths and use them counterproductively. This is why it requires an expert often to really reap the business and life benefits of Strengths. Also, having a coach almost always helps regardless, this being as executives we often don’t have people to talk to about our thoughts, feelings, and goals. Coaches allow us to essentially “pour these things out” and make sense of them. 

 

Ever notice how when you talk to a best friend about your problems, even if they don’t give you any advice whatsoever-- just simply talking with them and getting those thoughts out all of the sudden causes it to make sense? It’s as if out of nowhere you get this sense of clarity, direction, and relief?

 

It works the same way with journaling, now I won’t go into to the science of journaling, and how that helps, but the fact of the matter is that:

 

Emotions have no place on paper, and all problem solving begins by either writing down the things on paper first, or talking to somebody about the problem. Also, a great coach will work to pull all these things out of you naturally, and pull out the best within you.

 

In any endeavor coaching is absolutely crucial to reach a higher level of performance and success. In fact, According to PwC, one of the Big Four accounting firms, the mean ROI for executives who invest in coaching is 7 times the initial investment. Meaning they get back $7 for every $1 they put down

 

Some of the best coaches on the planet even have coaches of their own. 

 

Coaches need coaches…

 

C-suites need coaches...

 

Managers need coaches…

 

Everybody needs coaches… 

 

Strengths-based benefits for the organization

 

Aside from the personal benefits you get from Strengths coaching however, let’s talk about the benefit of the business at large. 

 

Organizations that use strengths and are highly engaged can see 18% higher revenue per employee compared with averagely engaged organizations.

 

Now, also important to note, is the list of costs that you can cut through with a Strengths-based approach. Not only do you increase revenue beyond a baseline, you can also cut costs. Evidently, the added benefits of Strengths are often exponentially effective. For example, on average a disengaged employee costs a company 34% of that employee’s salary. For instance, when you pay an employee a salary of $100k and they show up day after day actively disengaged, you really only make $66,000 from that person. 

 

This $100,000 down investment only yields a $66,000 ROI, so you are losing $34,000. Now imagine you work for a 1,000 person company, and the average salary is $100,000 dollars. Furthermore, let’s say 50% of those employees are actively disengaged. 50% of 1,000 is 500 employees whom are actively disengaged. Now consider the average salary is $100k, but for the actively disengaged 50%, you’re really only making $66k off of them.

 

Now, what is 500 times $100,000?

 

$50,000,000

 

So $50 million is what you SHOULD be making off of those 500 actively disengaged employees. But, $50 million times 0.66 (66%) equals to $33 million 

 

So off of a $50 million dollar investment, you’re only making $33 million, so really, $17 million is just getting flushed down the drain, when you can realistically change this through Strengths! 

 

Additionally, according to Gallup, if you were to combine the additive benefits of talented managers, talented contributors, high engagement and a strengths-based culture, an organization could see 59% higher revenue per employee.

 

Coupled with the fact of coaching, which yields a 700% ROI (According to PwC, as stated above). 

 

Evidently it’s easy to see the importance of Strengths & organizational health as a business strategy. This why Patrick Lencioni refers to it as “The single greatest competitive advantage”

 

So whatever your approach is to organizational health & profits…

You simply cannot go wrong by investing in Coaching or Strengths-based Development as a competitive advantage for yourself or your business at large.

Matt Hommel

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