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19 Nov 2023

Unlocking Organisational Health for a Sustainable Future

Deloitte Human Capital – Organisational Design
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In a constantly changing business landscape where organisations are dealing with increasing cost pressures, the concept of Organisational Health has emerged as a key element of sustainable business success. It is not just a response to the latest economic and political developments but critical to achieving organizational longevity, resilience, and competitiveness.

Expand the different sections below to learn more about our latest thinking on the topic of Organisational Health or download the full paper including additional information. 

Defining Organisational Health: The Key to Sustained Business Success

 

What is Organisational Health?

At its core Organisational Health ensures that the relevant capabilities and resources, at the right costs and in the right geographies, are optimally deployed to enable the organisation to deliver a future-proof business strategy, all while maximising profitability. It provides a foundation for a forward-looking strategy, strengthening long-term viability and adaptability in a dynamic business landscape.

What are the key benefits of Organisational Health?

Based on our client experience and market analysis, we see these key benefits of fostering and sustaining Organisational Health:

  • Long-term success and sustainability: A healthy organisation secures its place in the competitive business landscape for years to come.
  • Higher performance and productivity: Healthier organisations tend to perform better and achieve heightened levels of productivity.
  • Adaptability and change management: They are better equipped to navigate and thrive amid challenging and ever-evolving circumstances.
  • Well-being and talent development: Health-conscious organisations prioritise the growth and well-being of their employees, fostering an empowered and engaged workforce.

In essence, a healthy organisation is strategically positioned to outperform competitors, seize new opportunities, reduce costs, optimise the use of resources, and maintain agility in response to evolving industry dynamics. 

 
 

Building resilient health: Key drivers for success

 

To thrive in today's complex business landscape and secure your organisation's lasting success, it is essential to take a systemic approach. Organisational Health centres on a set of key drivers, clustered into key themes addressing relevant topics (see Figure 1), to boost your organisation's strength and competitiveness. Strengthening these drivers fortifies your organisation's resilience, enabling it to flourish in a dynamic business world. The following themes are informed by market insights and real client experiences:

  • Theme 1: Organisational Structure and Capabilities: This theme centres on shaping your organisation's structure and capabilities. It involves strategically designing your ecosystem set-up and workforce around your core organisational capabilities, optimising operational processes and ways of working, and establishing effective governance and decision-making processes. You align employees' skills and roles with your business strategy to ensure impact and efficiency.
  • Theme 2: Financial Costs: The second theme focuses on your organisation's financial landscape, encompassing workforce costs, external vendor investments, and geographical footprint. It involves resource optimisation and strategic financial management.
  • Theme 3: Sustainability and Talent: This theme concentrates on fostering a strong organisational culture, shared values, and ethical, sustainable business and people practices. It also encompasses recruiting, retaining, and developing talent with the right skills.
 

Figure 1: Set of key drivers, clustered into key themes addressing relevant topics

 Figure 2: Typical metrics per driver

Factors to successfully achieve and continuously manage Organisational Health

 

Buy-in across business units and geographies / resistance to change: In across various business units and geographies is often a significant hurdle.The success factor here lies in effectively communicating Organisation Health’s value, aligning it with the broader organisational strategy, and addressing concerns about change. Overcoming resistance to change by demonstrating the positive impact on each unit's and geography's objectives Ownership from senior business leadership is a key success factor. When leadership not only supports the project but actively champions it, the chances of success significantly increase. Leadership ownership drives a culture of health and serves as a model for the entire organisation. It is about more than endorsement; it is about active participation and commitment is critical.

 

Business leadership ownership: Ownership from senior business leadership is a key success factor. When leadership not only supports the project but actively champions it, the chances of success significantly increase. Leadership ownership drives a culture of health and serves as a model for the entire organisation. It is about more than endorsement; it is about active participation and commitment.

 

Collaboration between HR and Finance: Collaboration between HR and Finance teams is crucial for success. An effective partnership between these two functions ensures comprehensive understanding of the financial implications of organisational health initiatives. Successful projects have mechanisms for crossfunctional collaboration that aligns financial and human resource strategies.

 

Data availability and consistency:  Success in organisational health projects depends heavily on the ability to obtain and maintain high-quality data across different business units and countries. This data provides an essential foundation, enabling organisations to assess their health against industry standards or peers. However, it can often be challenging to ensure good data quality and acquire the capability to compare different data sets between business units and countries. Inconsistencies or data gaps may impede organisations' efforts to accurately track their progress and pinpoint areas requiring improvement.

 

Data privacy and regulations: Maintaining a strong grip on data privacy and adhering to evolving regulations are paramount to success. Failure to navigate these concerns can lead to data breaches, legal issues, and damage to an organisation's reputation. Successful projects have robust data privacy measures in place, ensuring data is managed securely, in compliance with all relevant laws.

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Teena Madhvani

Human Capital Partner

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