How Organizational Success Affects Performance

When I first stepped into the CEO role at a supplements company, our board meetings focused exclusively on traditional metrics: - Revenue growth - Profit margins - Market share - Customer acquisition costs - Operational efficiency Important? Yes. Sufficient? No. Through years of building and scaling purpose-driven companies, I've learned that what you measure shapes what you achieve.  Here's how we evolved our success metrics: 𝗧𝗶𝗲𝗿 𝟭: 𝗙𝗼𝘂𝗻𝗱𝗮𝘁𝗶𝗼𝗻𝗮𝗹 𝗠𝗲𝘁𝗿𝗶𝗰𝘀 • Financial sustainability • Operational excellence • Market performance • Growth trajectory 𝗧𝗶𝗲𝗿 𝟮: 𝗦𝘁𝗮𝗸𝗲𝗵𝗼𝗹𝗱𝗲𝗿 𝗜𝗺𝗽𝗮𝗰𝘁 • Employee wellbeing • Customer transformation • Supplier relationships • Community contribution • Environmental stewardship 𝗧𝗶𝗲𝗿 𝟯: 𝗣𝘂𝗿𝗽𝗼𝘀𝗲 𝗔𝗹𝗶𝗴𝗻𝗺𝗲𝗻𝘁 • Mission advancement • Values integration • Culture strength • Innovation impact • Legacy creation Key Learning: The metrics that matter most often can't be captured in a spreadsheet. Ask yourself: → How are we measuring our true impact? → What invisible value are we creating? → Where might traditional metrics be limiting our vision? → What would we do differently if we measured what matters most? The future belongs to companies that understand this fundamental truth: Success is multidimensional. What non-traditional metrics drive your business decisions? Share your approach below. #leadership #businesssuccess #purpose #impactmetrics #companyculture #stakeholderimpact #missiondriven #innovation #valuesalignment #sustainablegrowth #ceolife #strategicplanning #corporateresponsibility #growthmindset #organizationaldevelopment #businessstrategy #purposealignment #employeeexperience #customerexperience #businessleadership #visionandvalues #successmindset

𝗧𝗵𝗲 𝗥𝗲𝗮𝗹 𝗥𝗢𝗜 𝗼𝗳 𝗢𝗗? 𝗛𝘂𝗺𝗮𝗻 𝗣𝗼𝘁𝗲𝗻𝘁𝗶𝗮𝗹 𝗨𝗻𝗹𝗲𝗮𝘀𝗵𝗲𝗱 OD isn't just about enhancing culture or improving communication, it's a strategic investment that delivers measurable returns. 📈 𝗧𝗵𝗲 𝗣𝗼𝘄𝗲𝗿 𝗼𝗳 𝗔𝗹𝗶𝗴𝗻𝗺𝗲𝗻𝘁 According to LSA Global's comprehensive study involving 410 companies across 8 industries, organizations that achieve high alignment among strategy, culture, and talent experience remarkable performance: ▪️58% faster revenue growth ▪️72% higher profitability ▪️2.23 times better customer retention ▪️3.2 times higher customer satisfaction ▪️8.71 times more effective leadership ▪️16.8 times greater employee engagement Source: https://lnkd.in/g7gUTGWm 𝗧𝗵𝗲 𝗧𝗵𝗿𝗲𝗲 𝗣𝗶𝗹𝗹𝗮𝗿𝘀 𝗼𝗳 𝗔𝗹𝗶𝗴𝗻𝗺𝗲𝗻𝘁 Three critical factors contribute to organizational success: 1️⃣ 𝑆𝑡𝑟𝑎𝑡𝑒𝑔𝑖𝑐 𝐶𝑙𝑎𝑟𝑖𝑡𝑦 (31%) - Ensuring that every employee understands the business strategy, believes in its success, and sees its applicability within the organization's unique context. 2️⃣ 𝐻𝑒𝑎𝑙𝑡ℎ𝑦 𝑎𝑛𝑑 𝐻𝑖𝑔ℎ-𝑃𝑒𝑟𝑓𝑜𝑟𝑚𝑖𝑛𝑔 𝐶𝑢𝑙𝑡𝑢𝑟𝑒 (40%) - Cultivating a culture where employees trust leadership, comprehend the desired corporate culture, observe leaders modeling this culture, and feel that the culture accelerates business strategy. 3️⃣ 𝐷𝑖𝑓𝑓𝑒𝑟𝑒𝑛𝑡𝑖𝑎𝑡𝑒𝑑 𝑇𝑎𝑙𝑒𝑛𝑡 (29%) - Attracting and retaining top performers who have access to necessary resources and believe their talents provide a competitive edge. 𝗢𝗗: 𝗧𝗵𝗲 𝗖𝗮𝘁𝗮𝗹𝘆𝘀𝘁 𝗳𝗼𝗿 𝗔𝗹𝗶𝗴𝗻𝗺𝗲𝗻𝘁 OD plays a pivotal role in achieving this alignment by: ▪️Facilitating strategic clarity through effective communication and leadership development. ▪️Shaping and nurturing a culture that aligns with organizational goals. ▪️Implementing talent management practices that attract, develop, and retain high-performing 𝗧𝗵𝗲 𝗥𝗢𝗜 𝗼𝗳 𝗟𝗲𝗮𝗱𝗲𝗿𝘀𝗵𝗶𝗽 𝗗𝗲𝘃𝗲𝗹𝗼𝗽𝗺𝗲𝗻𝘁: 👉 A comprehensive study by New Level Work found that for every $1 invested in leadership development, companies realize an average return of $7, with ROI ranging from $3 to $11. 👉 Training Industry reported that leadership development programs can yield a 415% annual ROI, equating to $4.15 for every $1 spent. 𝗧𝗵𝗲 𝗛𝘂𝗺𝗮𝗻 𝗦𝗶𝗱𝗲 𝗼𝗳 𝗥𝗢𝗜: Beyond the numbers, OD fosters environments where: ▪️Employees feel valued and engaged. ▪️Leaders are equipped to navigate challenges effectively. ▪️Organizations adapt and thrive in changing landscapes. 𝗬𝗼𝘂𝗿 𝗧𝘂𝗿𝗻: Have you witnessed the impact of OD in your organization? Let's discuss how investing in people drives real, measurable success. Share your experiences or insights below. 👇

Only 38% of employees feel deeply connected to their company’s purpose. Yet teams aligned with purpose achieve 2x stronger performance outcomes. We’ve been analyzing new research on what sets high-performing organizations apart. From purpose to culture, the data reveals clear patterns worth unpacking. Here’s what stood out: 1. Purpose without reinforcement fades fast. 58% say company purpose isn’t visible in their daily work. Teams with daily purpose cues see 26% higher engagement and 31% faster decisions. 70% want purpose at work, but one-third say it’s missing. 2. Culture must be measurable, not just aspirational. Only 32% of HR leaders say culture aligns with strategy today. High-performing companies measure microcultures using behavioral and sentiment data. Engaged cultures drive 21% higher profitability and retention. 3. Skills data isn’t tied to performance outcomes. 79% invest in skills frameworks, only 24% link them to results. Companies with continuous feedback systems are 50% more likely to exceed goals. 4. Behavioral nudges boost performance and retention. A global bank cut attrition by 19% using collaboration nudges. Employees with feedback nudges grow skills 23% faster. Small prompts lead to measurable improvements in productivity and morale. 5. Human sustainability is the new performance advantage. 52% of high-performers now report feeling burned out. Well-being investments triple retention and increase output by 22%. Engaged teams also drive 21% higher profitability. The takeaway: strategy alone doesn’t drive performance, aligned experience does. Check the comments for the full piece from John Guy and Simply Get Results. Which shift is most urgent for your organization this year? #FutureOfWork #PeopleAnalytics #HRStrategy #EmployeeExperience #OrganizationalDesign

One of the strongest predictors of long term corporate performance, financial and otherwise, is a strong culture and the underlying health of the organization.  A research-based update of McKinsey's Organizational Health Index (OHI) has uncovered some major shifts in the underlying drivers of organizational effectiveness. We believe this is based on fundamental shifts in how to effectively lead and manage 21st century organizations. For instance, the research shows: 1. Having a compelling purpose is more important than ever; the "why" is as (or more) important than the "what". 2. Authoritative leadership is no longer effective. In the past, strong top-down authoritative styles were sometimes needed. No longer.  3. Facts, data and analysis matter when making decisions - and they matter most for new ventures and innovations where our intuition and pattern recognition are most biased. 4. Go beyond employee engagement to create enriching experiences where every employee can thrive 5. Capabilities must increasingly be tech-enabled, but unless there is a clear business case, investments in slick new technologies don't help. 6. Do the right thing. For-profit companies don't need to save the world, but employees, and organizational stakeholders broadly, want to work for and with companies that act responsibly. Those companies that do see real benefits in their organizational health and performance over time. Thanks to my co-authors Arne Gast, Drew Goldstein, Dickie Steele, James Rappaport and Nicolette Rainone, Ph.D.

Hitting a target doesn’t mean you have reached the goal. Across organizations, I have seen teams define KPIs, track progress rigorously, and optimize consistently, only to realize that the underlying outcomes they cared about hadn’t improved. This is the essence of #Goodhart’sLaw: “When a measure becomes a target, it ceases to be a good measure.” It shows up across industries with real consequences. - Education: Emphasizing test scores led to “teaching to the test.” Scores improved, while actual learning eroded. - Healthcare: Hospitals focused on reducing length of stay. Readmissions increased. - Social media: Algorithms optimized for engagement. Watch time soared. So did polarization and misinformation. In each case, the original metric was a useful proxy, until it became the goal. At that point, it distorted the system it was intended to improve. Avoiding this requires more than better instrumentation. It requires disciplined, principled leadership. Some practices I’ve found effective: - Track multiple, in-tension metrics. No single “north star” can do it all. - Pair quantitative data with qualitative feedback: customer voice, frontline insight. - Incentives shape behaviors. Align incentives with integrity, not optics. - Reevaluate your measures as the business evolves. As AI systems take on more decisions, how we define success becomes even more consequential. I’ve shared more on this topic, including leadership approaches to designing metrics that drive real outcomes. I would love to hear other examples you’ve seen where the wrong approach to measurement and incentives led to the wrong outcome. https://lnkd.in/gNz4qK5B Goodhart’s Law isn’t theoretical. It’s a test of leadership judgment.

Everyone wants the revenue to rise, market share to climb, and sales to surge. But here’s the uncomfortable truth: revenue is a lagging indicator. It only tells you what has already happened. If you’re measuring success purely by outcomes, you’re diagnosing too late, like treating a fever without asking what caused it. Behavior must change before any sales team can grow revenue or capture market share. And behavior doesn’t shift because you asked it to. It shifts when you identify the root cause of what’s holding it back. Is it a Skill issue? A Will issue? Or a Way issue? * Skill is about capability—do they know how to do it? * Will is about motivation—do they want to do it? * Way is about systems—are you enabling them to do it? If you don’t know which one is broken, no amount of incentives or training is going to fix it. It’s not guesswork. It’s a diagnosis. Once the root cause is clear, the part most organizations skip is defining both leading and lagging indicators. Here’s the difference: - Leading indicators are behaviors and activities that predict success. Examples include the number of quality discovery calls, the adoption of a new process, and the frequency of manager coaching. - Lagging indicators are the results that show up after those behaviors take root. Think: revenue growth, deal velocity, customer retention. If you’re only measuring revenue, you’re reacting. If you’re measuring behaviors, you’re leading. In other words: don’t wait for the numbers to tell you something went wrong. Observe the signals that show what’s going right—or what’s missing. You can’t scale what you don’t track, and you can’t track what you haven’t defined. So, where do you start? 1. Diagnose the root: skill, will, or way? 2. Define observable behaviors tied to success. 3. Establish qualitative and quantitative measures for those behaviors. 4. Reinforce, coach, and track—before you forecast. Sustainable growth isn’t magic. It’s a process, and the teams that treat behavior as the leading performance metric are the ones that stop chasing results and start creating them.

If you spend time and resources to increase top line (Sales ) or cutting costs across the organization ( COGS + Other Expenses), many times the effect on the bottom line in the short term ( Net Profit) may look the same . But here's the catch: The path you choose can have a profound impact on your organization's morale, culture, and long-term capability. Company A focuses on growth: • Constantly explores new markets • Encourages risk-taking • Breeds innovation and initiative • Creates a culture of possibility • Attracts entrepreneurial talent Company B focuses on cost-cutting: • Scrutinizes every expense • Breeds cautiousness • Creates a control-heavy environment • Develops a scarcity mindset • Often loses dynamic talent Here's the paradox: Both approaches might show similar numbers on today's Net Profit . But they create entirely different organizational DNA. While Company A builds muscles for future growth, Company B might be unwittingly trading tomorrow's opportunities for today's savings. The choice between growing the pie or cutting it differently isn’t just about financial statements—it’s about the culture, capability, and vision you embed into your organization. #Leadership #OrganizationalGrowth #BusinessStrategy #CompanyCulture #Innovation #RiskTaking #FutureOfWork #Entrepreneurship #GrowthMindset

The most overlooked driver of business success? Psychology. Most companies invest in strategy, AI, and execution. But the real advantage? People. Because businesses don’t run on ideas alone. They run on the minds, decisions, and behaviors of the people behind them. Business is about people. With a Master’s in Clinical Psychology, an Organizational Coaching Certification, and 12+ years in talent strategy, people operations, and scaling a global revenue-generating program, I’ve seen this firsthand: High performance isn’t just about technical skills. The real differentiators? Mindset. Resilience. Adaptability. Self-sufficiency. Yet, too many businesses ignore the human factors that drive results. Why? Because psychology feels too intangible, unpredictable, or “soft” to measure. Many leaders assume success is built on hard skills, process, and execution alone. But ignoring the human side of business has real consequences: ❌ High turnover—employees don’t feel valued or understood ❌ Poor leadership—managers lack the skills to develop and motivate teams ❌ Stagnant performance—employees are mentally checked out ❌ Weak culture—psychological safety is missing ❌ Missed innovation—lack of trust stifles fresh ideas The business advantage of psychology? ✅ Stronger leadership—Leaders who understand how people think and work build high-performing teams. ✅ Better retention & engagement—Companies that create psychologically safe environments keep top talent and foster innovation. ✅ Higher performance & morale—People who feel valued do their best work. ✅ More effective sales & client success—Psychology strengthens negotiation and relationships. ✅ Smarter product & innovation—A deep grasp of human behavior fuels better user experiences. And this isn’t just for HR. ◾ Leaders who understand psychology make better decisions and create high-performance cultures. ◾Sales teams who apply psychology close more deals and build stronger relationships. ◾Product teams who leverage human behavior create solutions people actually want. Even as AI reshapes the workplace, the most successful companies will be the ones that maximize human potential. I’ve seen this firsthand. When I scaled a global revenue-generating program, people always asked: “What was the key to its success?” It wasn’t just strategy or operations—it was understanding people. Knowing what motivates them, how they learn, and what drives performance allowed me to build something that scaled rapidly and delivered real results. The bottom line? If you ignore psychology and human behavior in business, you’re leaving potential—and profit—on the table. Talking about mental health, resilience, and psychology isn’t “soft”—it’s a business strategy. Because when you understand people, you don’t just create a better workplace—you build a stronger, more successful business. How has psychology or mindset influenced leadership or business success in your experience?

What sets some companies apart for continued success, year after year—operationally, financially, and otherwise? Our research highlights a key determining factor: organizational health.    A new article I coauthored with my colleagues Alexandra Camp, Arne Gast, and Drew Goldstein shares the latest findings from McKinsey’s Organizational Health Index, which builds on 20 years of research examining how effectively organizations are run. We find that healthy organizations deliver 3x the total shareholder returns of unhealthy organizations while demonstrating greater resilience and higher financial performance.    Leaders can boost their organization’s health by fostering key practices and behaviors to drive improved outcomes, including:    - Decisive and empowering leadership  - Creative use and management of data  - Dynamic deployment of talent     Improving organizational health takes time, but doing so can put companies on a fast track to performance. Read our article to get up to speed: https://mck.co/3UywyUP   Thank you to Aaron De Smet and John Parsons for their partnership on this research!   #OrganizationalHealth #Leadership #Culture #Talent