1.4 Framework of Organizational Health
There are many frameworks developed for organizational health. Some of the important ones have been discussed in this section.
1.4.1. NHS Framework
The researchers for the NHS reviewed several frameworks from different authors (Quick et al. 2007; OHDDC 2008; Thaw 2002, cited in Britton n.d.; Schein 1965, cited in Goldman Schuyler & Branigan 2003; Bruhn & Chesney 1994; De Smet et al. 2006) and synthesized to develop their simpler framework.
In the NHS framework, the four categories are Interrelation, Identity, Autonomy and Resilience. Interrelation refers to the relationships within the organization itself. Identity refers to the organization’s acting as a cohesive entity. Autonomy refers to the organization’s capacity to act upon the outside world, and Resilience its capacity to cope with challenges coming from the outside. This framework represents an attempt to give content to the idea according to which the health of the organization is analogous to the health of an organism.
Interrelation refers to the harmonious balance of components within the organisation, and the smooth functioning of the circuits by which resources such as information are shared and transmitted or decisions communicated. Two dimensions of interrelation which are emphasised by all frameworks reviewed are open and honest communication, and fairness. Identity refers to the relationship between the parts and the whole. Identity is often referred to in the literature using terms such as ‘cohesiveness’ and ‘shared values’. Identity includes both structures and perceptions. A healthy organisation is one which is structured in such a way that the role of each component contributes to the overall function of the whole. It is also one in which these structures are clearly perceived and shared throughout the organisation, creating a “sense of belonging” (Quick et al. 2007). Different theories of organisational health adopt different views on the process of change which promotes identity, with some strongly emphasizing the integrity and consistency of individual leaders within the organisation (Quick et al. 2007), and others referring in more neutral terms to a process of “alignment” throughout the organisation (De Smet et al. 2006). The theory of organisational culture (section 3.6 below) may be valuable for understanding this process. The process by which parts and whole are aligned also ensures that the organisation’s values are effectively propagated. Hence, a further characteristic which forms part of the identity dimension is “clarity of purpose”, which is mentioned by virtually all theorists of organisational health.
Autonomy refers to the organisation’s capacity to act upon the surrounding world. This includes both the impact that the organisation’s action is capable of having, and the values which inform this action. To be healthy, an organisation must both be capable of acting decisively to achieve its goals, and also have the integrity to ensure that these actions are appropriate to the environment in which it lives. A key dimension of autonomy is “courage” (Quick et al. 2007) in the sense of a willingness to take calculated risks (or bets, as described byDe Smet et al. 2006). However, this is not the only component of autonomy; structural factors are also important. Autonomy is supported by strategic depth in the organisation’s core competencies, and by an organisational culture which empowers individuals. Thus, an organisation with a high degree of autonomy is one which is able to pro-actively transform its environment and create an impact which is consonant with its core values.
Resilience refers to how the organisation is acted upon by the world. This incorporates a broad range of capacities, including the ability to respond constructively to challenges; to learn from the environment, and from the organisation’s failures as well as its successes; and the organisation’s adaptability to changing circumstances. Resilience thus includes categories such as “innovativeness” and “problem solving adequacy” (OHDDC 2008). Resilience can be seen as linked to identity insofar as it consists in the organisation’s capacity to change and renew itself in response to challenges without compromising fundamental values. Thus, Bruhn & Chesney (1994) argue: “Healthy organisations have the ability to adapt to fluctuation and change and return to their usual, stable pattern of functioning”. Similarly, McKinsey (2006) emphasise the importance of a “formula” which informs change and can be repeated as the organisation moves into new areas. Under the assumption that most organisations operate in an environment which is constantly changing, autonomy and resilience overlap, since producing an impact will be impossible without the capacity to adapt and learn from the environment. This co- dependence of autonomy and resilience can be expressed in terms of action-learning models such as the Kolb cycle (Kolb 1984), where action and learning succeed and mutually inform each other..
As this last point illustrates, all the divisions between different dimensions are artificial to some extent, since each forms a phase of an ongoing process which should be seen as a whole, and they are interrelated in complex ways. For example, a key aspect of maintaining identity is the ability to get feedback on the adaptations facilitated by resilience (Schein 1965, cited in Goldman Schuyler & Branigan 2003); the values projected into the world by the organisation’s autonomy cannot migrate too far from those which are instantiated in its internal interrelations (the need for ‘complementarity’ identified by De Smet et al. 2006); and so on. Hence, problems with one dimension of health are unlikely to manifest in a clearly localised form, but may be diffuse in their effects.
1.4.2 McKinsey Model
The model developed by McKinsey, and described in De Smet et al. (2006) and McKinsey (2009) is one of the most comprehensive attempt to develop an framework which articulates the concept to the extent that it can pinpoint specific indicators of organizational health. The model has 5 dimensions and 9 elements of organization health.