How is your organisation feeling today? Just as health gurus stress that individuals should be enjoying optimum health levels, rather than simply managing to avoid catching flu, it now seems that organisations need to aim for super-health as well. Not just in terms of the health of the workforce, but in terms of how the workforce feels about the organisation.
Sounds like the touchy-feely approach gone mad? Perhaps. But it is worth looking at the recent success of companies that have taken the wellbeing approach seriously.
‘Wellbeing’ features prominently in the categories assessed for the Sunday Times’ 100 Best Companies to Work For list, sponsored by the Department of Trade and Industry and Investors in People. Other categories include: how employees feel about managers and colleagues; how much they think their employer puts back into society; and the extent to which they feel their working life is contributing to their personal growth.
Beating the competition
The 2006 list was published by the Sunday Times at the beginning of March, and shows that healthy companies aren’t only popular with staff, they are outperforming competitors on the FTSE 100 index as well. Some companies high up on the list have shown five-year returns of more than 40% since the list was set up in 2001.
One example is Denplan, a dental insurance subsidiary of insurance giant Axa, which was 11th in this year’s Sunday Times’ 100 Best Companies to Work For list. The leadership of managing director Stephen Gates scored highly, with 88% of staff having a great deal of faith in him, and 84% finding him “inspiring”. On top of that, 80% of staff feel they are listened to by senior management as a whole.
Gates puts his success down to communicating with staff, linking pay to performance, making work fun (this is even mentioned in the mission statement) and celebrating success.
“I believe this approach has an impact in the widest sense,” he says. “The company has had compound growth of 20% every year for the past four years. The flexibility and dedication of staff would have been difficult to harness if they didn’t think: ‘This organisation looks after me, and I want to contribute’.”
According to Pauline Crawford, founder of management consultancy Corporate Heart, which advises organisations about how to increase employee wellbeing and commitment, there is much evidence that how people feel at work affects performance. She cites the work of Charles Handy, Daniel Goleman and Japanese thinker Tsunesaburo Makiguchi, who has developed influential theories linking the creation of value, the happiness of the individual, and the prosperity of society at large.
While values such as trust, respect and integrity are important, Crawford stresses that what matters in the workplace is behaviour that demonstrates these values. “For instance, we look at whether an organisation is one in which people give and receive compliments easily, or validate the work of other people,” she says.
Corporate Heart conducts MOTs of organisational health. Once the diagnosis has been made, fundamental change is often prescribed. “It’s not about HR or leaders doing it all – people need to change at all levels,” says Crawford. “This is not easy. People are often very precious about who they are, and about their territory, and if they have poor self-knowledge, it is even more difficult.”
Her robust view of workplace health is shared by Octavius Black, managing director of training consultancy The Mind Gym.
“A healthy organisation is one in which people are focused on delivering the organisation’s purpose, not internal wrangling,” he says. “Twenty years ago, if you had been asked to predict the fortunes of a company that focused on customer service, and one that was concerned only with the bottom line, you would have expected the one focused on the bottom line to do better. Now we know the opposite is true. And we are 20 years behind this in the way we approach employees.”
Hanging on to staff
Black says that with the working population now “flatlining” after growing by 25% in the past three decades, employers will be increasingly desperate to hang on to staff – and to get the best performance out of them.
“Engineering high performance and an environment in which people are working effectively does not mean creating a cosy environment in which poor performance is allowed to continue,” he says.
“A healthy organisation has high transparency, and low tolerance of mediocrity. This is not a choice between Alan Sugar and tree-hugging – it is about giving support to dynamic performance.”
And Black sees a great opportunity for HR in leadership terms.
“This is a fantastic role for HR,” he says. “This is how to get to board level. If you appeal to people’s self-interest, in terms of their own performance within the organisation – and beyond it – showing them how to achieve more, how to get promotion, even how to be more respected and liked, you can create a healthy organisation and improve its overall performance.”
Gates agrees. “This is all-important when competitors are quicker to copy brands, and when the difference between products becomes smaller and smaller,” he says. “It has long been said that ‘people are our most important asset’ – but what are most companies doing about that?
“Being a healthy organisation means we have a competitive difference in an area others would find difficult to copy.”