Businesses are increasingly coming to question all elements of their existence as new techniques arise through which businesses can be quantified. The human side – the organisation – which includes leadership, change, culture and employee engagement, is also increasingly coming under the purview of analysis. In line with this development, McKinsey & Company and Gallup have launched the Organisational Science Initiative, which aims at creating new approaches for using data to improve the performance of organisations.
One of the key issues many businesses face is that staff around the world is not engaged in their work. A recent Gallup report finds that a mere 13% of the world’s full-time employees are ‘engaged’. The lack of engagement is a serious concern for businesses, as disengaged workers are generally less productive and interested in achieving businesses ends.
To find out what is stopping businesses and workers being engaged with each other, and how to improve the organisational side of businesses, Gallup and McKinsey & Company have launched the Organisational Science Initiative. This initiative aims at developing next-generation analytics that will improve the performance of organisations. By bringing together Gallup’s expertise in measuring engagement, talent and management and McKinsey’s strength in analytics, strategy and leadership a solution to the issue of engagement may be found.
The key concept for the initiative is organisational health. As it stands, executives sit on a trove of relevant information, which includes, among others, the performance of workers, productivity, sales and cash flow. The problem remains however, that much of this information is not about to provide insights or material for decisions. Furthermore, the mind-set and behaviour of employees – and the management techniques that attempt to influence them for business ends – remain difficult to understand yet play a considerable role in performance.
Organisational Science Initiative
The new initiative is set to develop common standards for data, standards that will form the basis for a ‘cross platform analysis’ that range over companies, industries, and regions to get a firm grasp of why employees are disengaged. Chris Gagnon, a McKinsey partner and leader of McKinsey's organisation analytics group, explains: “The problem is that no single firm has the ability to take all this data and translate it into a complete picture of organisational health. Combining the data and knowledge is going to mean we can look at organisational health in ways that haven’t been possible before.”
Initiatives for the venture going forward include:
- The joint development of a research agenda: this is expected to be drawn from Gallup’s long running employee engagement survey, which has been administered by hundreds of organisations since the late 1990s, combined with insights drawn from McKinsey's Organisational Health Index of over 900 companies.
- The establishment of a global advisory board: the partners are building a global advisory board, made up predominantly of C-suite HR executives from large organisations.
- The setting up of regional summits for advisory board members: board members will be invited to join regional summits with other experts to help develop a long term plan as well as discuss practical business priorities for current management issues – in cities including New York City, London and Singapore – to brief global advisory board members and key industry executives.
“We think there’s a lot to be gained by integrating our strength in organisational strategy and health with Gallup’s deep insight into the attitudes and behaviours of individual employees,” concludes Bill Schaninger, a McKinsey partner with a PhD in organisational psychology who leads Advanced Analytics for McKinsey’s global Organisation Practice.