What makes companies perform well?
To find this holy grail of management studies, a McKinsey team analyzed upward of 100,000 questionnaires to uncover the practices of 400 business units in 230 companies around the world.
The team eventually arrived at one winning combination: clear roles for employees (accountability), a compelling vision of change (direction), and an environment that encourages openness, trust, and challenge (culture). Nothing else came close in improving organizational performance.
What’s more, the study found that organizational and financial performance correlate directly. An analysis of a global energy group’s production facilities, for example, suggested that for a facility of typical size and margins, better organizational performance had a payoff of $25 million to $30 million.