Along with many other foundations across the globe, Mergon seeks to serve ministries in their pursuit of greater impact for the Kingdom of God. As a resource partner to over 100 ministries, we are keenly interested in the health of leaders and organisations as a means to understand their current mission effectiveness, and how to help them build capacity towards even greater impact.
In our most recent article on organisational health, we unpacked why understanding and evaluating perception is a key to unlocking organisational health. If you missed it, you can read it here.
Through a process of identifying and defining the key dimensions of a healthy organisation, Mergon developed an Organisational Self-Perception (OSP) Scan as a practical resource tool designed for NPO and ministry leaders. From each dimension, we identified five or more management practices; and for each management practice, we developed a statement to identify the visible occurrence of the practice.
In this article we will give a brief overview of these 11 dimensions from our OSP Scan. Keeping these dimensions in mind at all times can help a leader or management team to lead with better perspective, thereby enabling a healthier environment. If these dimensions aren’t healthy, or not within the view of the leader, it’s unlikely that the organisation will have the full impact it desires.
1. Healthy leadership
The first dimension of organisational health is leadership. There is no such thing as a perfect leader or a leader who is excellent across all 11 dimensions. All leaders have faults. However, strategic leaders are highly capable individuals who function as contributing team members with great management skills and lead with great humility. Humility breeds humility, and that in turn makes a leadership team function in a very healthy way.
Secondly, all organisations need a clear and compelling mission. Without this, it’s hard to recruit passionate team members who identify and carry the same mission deeply in their hearts. A clear mission comes from a clear vision. Vision is what we can see in our mind’s eye as the destination we are moving to. Mission is the statement that captures the fundamentals about how we will get there, said in a manner that evokes emotion and directs activities. Mission needs to be well communicated, understood, and even memorised by the whole team.
One of the essential ingredients for a flourishing organisation is to attract talent. Many organisations never fulfil their potential because they can’t attract or retain great people. What’s more, you don’t just need the right people; you need the right people in the right roles. A healthy organisation has the ability to acquire, develop and manage key personnel in such a way as to maximise impact while retaining employee satisfaction.
At Mergon we love to meet thinking organisations, those that carefully consider various ways to create impact and pick the best route forward. Strategy takes time and thoughtful investigation before it can be effectively applied. A good strategy is built on a well-researched theory of change and is evaluated according to realistic goals. A strategic organisation will often be innovating, expanding and diversifying.
5. Brand and communications
Many organisations don’t know how to tell their own story. They are either disconnected from it or they are telling it badly. Leading organisations realise the importance of their brand and communications: their brand enjoys a healthy level of exposure that builds trust and communicates a clear value proposition to all stakeholders. These types of NPOs attract supporters, funders as well as people wanting to work for them. Their brand helps to build their resilience.
Within the life of an organisation, funding and sustainability are two inextricably linked concepts. There is certainly more to the sustainability of an organisation than just funding – factors such as its leadership pipeline, compliance and good governance all feed into the overall sustainability of an organisation.
A healthy organisation should establish an income model which considers suitable revenue sources and a fund development strategy to sustain the organisation through both short and long-term goals. Without healthy funding streams, an NPO won’t be able to operate at its full potential.
7. Culture and values
An organisation’s culture is its collective personality. By the most basic definition, a team culture is made up of the values, beliefs, attitudes, and behaviours shared by a team. A healthy organisational culture creates a positive work environment that nurtures personal development and drives meaningful work, trust, cooperation and self-responsibility. Leaders need to know how to shape culture, to nurture it, as well as to root out toxic culture, to enable human thriving. Healthy culture is one of the most important factors that stimulate innovative and energised work environments.
8. Systems, processes and technology
Systems, processes and technology are the skeleton of a thriving organisation. These allow for effective management of communication, data, and resources according to a structure of responsibility and reporting. They support strategy execution, ensure compliance and address risks. When technology and systems are poorly designed they draw energy inwards and slow down progress. Leading organisations create lightweight, effective processes and use technology to enhance mission.
9. Financial best practices
Just as conversations about healthy leadership offer needed perspective on the organisation, so too can reading financial statements and audit reports provide valuable insight into the health of an organisation. Good financial management practices consider solvency, liquidity and cost awareness throughout the organisation, including asset and risk management. Financial systems can be a great blessing, but too often we see the incredible burden they create when done poorly.
10. Board and governance
A high-performance board seeks to ensure that the organisational mandate is executed through qualified leadership, good governance and adequate resources, whilst maintaining accountability, and legal and ethical integrity. When there is a good rapport between the CEO and board chairperson, the board normally acts as wise counsel and becomes a wonderful support for the management team.
11. Impact evaluation
All too often there’s a discrepancy between an organisation’s strategy and its strategy execution. A healthy organisation implements a system of evaluating its hard work which ties impact directly to its theory of change, moving the organisation closer to its overall goal and defining both the quantitative and qualitative nature of the work. Impact evaluation informs strategy development, leading to clarity of thinking and execution.
From the perspective of these 11 dimensions, our hope is that management teams and leaders will understand how to lead their organisations forward, building capacity to create resilient organisations with greater impact.
Please refer to our previous articles for more information on this topic:
- What is organisational health and why does it matter?
- The physics of organisational health
- Understanding and evaluating perception: the key to organisational health
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