How Healthy Is Your Agency? It Could Be Time for a Checkup

Government departments and agencies are under increased pressure to perform effectively in the midst of budgetary and political uncertainty, but a high grade for performance doesn’t necessarily make for a clean bill of organizational health.

Over the decades, there have been initiatives (for example, National Partnership for Reinventing Government and the Government Performance and Results Act) aimed at pushing the federal government to deliver greater operational, mission-related, or financial results.

This focus on performance is understandable. The government is responsible for varied and crucial missions, and the public wants to know how well it is delivering. Department and agency leaders, employees, Congress and other stakeholders likewise want to understand where the government is performing well and where it is falling short. The government has improved its performance on a variety of indicators.

But with all the focus on performance, agencies may not be paying enough attention to their own organizational health—that is, their ability to sustain performance over the long term.

Worrying Symptoms

As individuals, we understand the importance of paying attention to our health as well as our performance: We learn to monitor our health outcomes (for example, weight and strength) and to follow certain healthy practices (for instance, diet and exercise). Outcomes and practices matter for organizational health, too. Organizations benefit from pursuing healthy outcomes, such as a unified direction, and from promoting specific practices, such as defining a shared vision and involving employees in bringing that vision to life.

In the past several years, we have seen signs that the federal government’s organizational health may be faltering. As one example, the latest Federal Employee Viewpoint Survey highlights potentially worrying symptoms for the federal government’s organizational health, with overall employee satisfaction scores below 60 percent. Agency leaders, members of Congress, employee unions, and President Obama have likewise noted declines in morale caused by the government shutdown, pay freezes and political fights. 

In and of themselves, low morale and low scores on employee satisfaction surveys are problematic. In addition, and perhaps of even greater concern, they also may be symptoms of more fundamental problems with the federal government’s organizational health—problems that could affect performance in the future.

Health Drives Performance

The positive link between organizational health and long-term performance is well established. Indeed, we’ve found that organizations that rank in the top quartile in McKinsey and Company’s survey of organizational health are twice as likely to outperform their peers. For companies, this can mean better financial or operational performance; for government agencies, it can mean better fulfillment of their mission.

For example, several years ago a federal agency that was facing internal and external crises used an organizational-health assessment to benchmark itself against others, identify strengths and weaknesses, and design initiatives to improve its health. Within two years, the agency showed double-digit improvements in its health scores, earned a place on a “10 best places to work” list in one of its top locations, and stabilized its operations. 

So how could a government agency conduct an organizational-health checkup? The first step is to review existing data on employee satisfaction, organizational alignment, leadership, and other indicators of organizational health. Second, where possible, agencies could benchmark themselves against their peers in the public and private sector—and use these benchmarks to identify strengths and opportunities for improvement. Once agencies have a fact-based assessment of their top health challenges, they can more easily begin the process of developing initiatives to address them. 

As 2015 gets under way, government leaders and employees may feel too busy and stretched to check on their agencies’ organizational health. But just as we individually put off checkups at our own peril, so do organizations. In fact, an organizational checkup and a plan to improve health practices may be just what these organizations need to sustain strong performance in the future.

Nora Gardner is a partner at McKinsey & Company in Washington. Cameron Kennedy is a senior manager of the firm’s public sector practice.

(Image via Nomad_Soul/Shutterstock.com)