- 11th February, 2025
- By Clair Turner
McKinsey's Organisational Health Index: key insights for modern leadership
McKinsey's Organisational Health Index (OHI) is one of the most widely used frameworks for measuring how well an organisation is led, run and positioned for long-term success. It benchmarks nine dimensions of organisational health — from leadership and culture to accountability and innovation — against a database of hundreds of organisations worldwide. Companies that score in the top quartile on the OHI deliver, on average, roughly three times the shareholder returns of those in the bottom quartile.1
McKinsey's latest OHI update surfaced six substantial shifts in what separates healthy, high-performing organisations from the rest. As an executive coach, I found these shifts a useful mirror for how leadership itself needs to evolve. Here's what they mean in practice.
What is the McKinsey Organisational Health Index?
The Organisational Health Index is a diagnostic tool developed by McKinsey that measures an organisation's ability to align around a shared vision, execute with discipline, and renew itself over time. It's built from employee and manager survey data across nine outcomes: direction, leadership, culture and climate, accountability, coordination and control, capabilities, motivation, external orientation, innovation, and benchmarks results against McKinsey's global database. In short: it tells leaders how strong their organisation's foundations really are, and where to focus first.
The six shifts leaders need to embrace
Empowering and decisive leadership
Directive, top-down leadership is losing ground to leadership that empowers and decides. The two aren't in tension; they work together.
Empowering leaders trust the people closest to the work to make the calls, because those people usually have the clearest view of what's actually happening. Decisive leadership means making a call quickly and following through on it, rather than leaving teams waiting on a decision that never quite lands. In fast-moving, frequently disrupted organisations, hesitation and flip-flopping cost more than an imperfect decision made on time.
In practice, this looks like:
• Pushing decision rights down to the people with the most context, not the most seniority
• Setting a default timeframe for decisions so they don't stall in committee
• Being transparent about the reasoning behind a call, even when the outcome isn't universally popular
Done well, this builds a culture of trust: employees who are trusted with real decisions tend to take more initiative, propose more solutions, and disengage less.
Purpose
Employees are increasingly motivated by why an organisation exists, not just what it does. A clearly articulated purpose — one that's lived daily, not just printed on a wall — is what connects individual effort to something bigger than a task list.
Purpose-driven organisations consistently see higher engagement, stronger retention, and more durable brand loyalty, because team member who understand and believe in the mission are more willing to go beyond the minimum. Leaders don't get to set purpose once and move on; it needs reinforcing in strategic decisions, team meetings, and day-to-day trade-offs. Simon Sinek's work on "why" remains a useful starting point for leaders working through this.
Data-driven decision making
Experience and instinct used to be enough to guide a senior leader's judgement. They're with the pace and volume of information leaders now have to process. As we accumulate experience, our thinking tends to converge on familiar patterns rather than staying open to new ones, which is exactly the wrong instinct in a fast-changing environment.
Leaders who lean on data and analytics — not to replace judgement, but to inform it — make more objective decisions, spot trends earlier, and build a culture where decisions are explainable rather than "because I said so." That also builds accountability: it's much easier to course-correct a decision that was based on visible data than one that was based on a gut feeling nobody can interrogate.
Thriving employees
"Employee experience" gets used a lot and understood inconsistently. Standard engagement or satisfaction scores are prone to bias; people often answer how they think they should, not how they actually feel. McKinsey's research points to something more useful: when employees define and rate what matters to them, the resulting data is more honest and more actionable.
This connects to a broader idea: the shift from managing outcomes to helping people thrive. Corey Keyes' book Languishing is a good companion read here — it maps the space between languishing and flourishing, and why most people sit somewhere in between rather than at either extreme. In practice, thriving-focused leadership means:
• Creating real opportunities for growth and stretch, not just annual training modules
• Recognising contributions specifically, not generically
• Understanding what "thriving" looks like for each individual, rather than applying one template to everyone
ROI on technology
Technology is simultaneously essential and exhausting for most organisations; the pressure to keep adopting new tools, improving communication channels, and upgrading systems never really lets up. Without a clear business case up front, new technology often adds cost and cognitive load without a matching return.
From coaching executives and their teams through exactly this, the toll is real: constant learning curves stacked on top of existing workloads erode both leadership bandwidth and team productivity. Leaders who manage this well tend to:
• Build the ROI case before rolling out a new tool, not after
• Invest in training and onboarding time as part of the cost of adoption, not an afterthought
• Periodically review whether existing tools are still earning their place
Social responsibility
Social responsibility has moved from "nice to have" to something employees — particularly younger generations — actively use to judge whether an organisation is one worth working for. This goes beyond philanthropy: it includes sustainable practices, ethical decision-making, and a genuine commitment to diversity and inclusion.
Organisations that build social responsibility into strategic planning (not just an annual report) tend to see stronger trust from both employees and external stakeholders. Leaders don't need a perfect answer here — they need a clear, honestly-held position and the consistency to act on it.
Why this matters for your organisation
These six shifts aren't a checklist to complete once — they're a reflection of how quickly the demands on leadership are changing. Good leadership isn't a fixed style; it's a continual response to the environment leaders are operating in. Reinvigorating how you lead is a daily practice, and your organisation's health depends on it.
If you're wondering how your organisation would score against these dimensions — or where to start — SixHourFix's executive coaching services can help you work through it. Related reading: High Performance Culture, What Makes a Team Work, Achievement Mindset.
How are you adapting your leadership style to meet today's challenges?