When we talk about business success, we often look first at strategy; the clever plan, the
competitive edge, the bold ambition. We may also look at the financials of a business; share
price, return on capital, EBITDA. But over decades of coaching leaders and teams, I’ve
learnt that strategy alone is rarely what separates thriving organisations from those that falter.
The true differentiator is organisational health- the invisible energy field that shapes how
people think, behave, and work together inside the company.

Organisational health is the degree to which an organisation functions effectively as a whole-
how aligned it is around purpose, how much trust exists between people, and how
consistently its culture supports performance and renewal. It’s the heartbeat that powers
strategy and it creates strong financial performance, not the other way around. It can be hard
to measure; engagement surveys do not quite get there. But we can sense it. Next time you
walk into a shop, restaurant, bank or hotel ask yourself, “how healthy is this organisation?’

Culture is the invisible thread that makes great performance possible, that determines
organisational health. Peter Drucker is reported to have coined the line “Culture eats strategy
for breakfast” and it holds true. Strategy tells us where we’re going; culture determines how
we get there. Culture, as Edgar Schein described decades ago, operates on three levels: the
invisible beliefs we hold, the values we state, and the behaviours we show. When those three
are aligned, trust builds, and the organisation is healthy. When they’re out of sync, people
stop believing the story and go into coast mode or leave.

In every organisation, leadership sets the culture. In CEO Excellence, by Carolyn Dewar and
colleagues, the research shows that companies which “treat the soft stuff as the hard stuff”
more than double their chances of successfully executing strategy. The best leaders
understand that culture isn’t decoration, it’s infrastructure. They make culture personal-
modelling the values they want to see, listening deeply, and measuring what really matters.
I often remind leaders: every action, every phrase, every raised eyebrow sends a signal.
How you arrive in the morning, where you eat lunch and how you leave at night are all
closely observed. People don’t just listen to what you say; they watch how you show up. In
that sense, leadership is the organisation’s heartbeat made visible.

Another definition of culture that I find useful is “the culture of any organisation is shaped by
the worst behaviour the leader is willing to tolerate” (Gruenert and Whitaker). It is not just
the positive action you take as a leader, but reducing or removing negative behaviour is
crucial. A healthy organisation self-polices damaging behaviour- it is simply not tolerated.

How do you investigate the health of your own organisation. You will already have a sense,
but this is where the phrase “management by walking about” which was first used by the
founders of Hewlett Packard is useful.

Spend time at all levels of your business asking good questions such as;
 Do people understand the purpose and priorities?
 Are values visible in decisions, not just posters?
 Do leaders model vulnerability and curiosity?
 Is there energy in the system — or are people merely enduring?

The answers tell you more about the health of your organisation than any survey or KPI
dashboard ever will.

Organisational health isn’t a one-off initiative. It’s something that must be cultivated and
rebalanced, just like physical health. It’s the sum of thousands of daily interactions- how
people greet each other in the morning, how conflict is handled, how success is celebrated.

Ultimately, healthy organisations are those where people belong, believe, and become:
 They belong to something bigger than themselves
 They believe in its purpose and feel safe pursuing it
 And they become better people through the recognition of their work

That’s what makes organisational health worth pursuing- not just for the numbers, but for the
humanity it restores to the world of work.