75% of all organisations are struggling to move to a high-performance culture, according to the latest McKinsey, State of Organisations Report 2026

However, when you strip away the narrative of low worker productivity, this remains a leadership issue – why are people disengaged, why don’t employees put in the required effort, why is the execution of strategic plans so poor and why is the use of new technology often little more than a grudge transaction?

So while there is pressure to boost productivity amid AI advancements, the current strategies are not working – simply, organisations want better people performance but they are not pulling the right levers and consequently, not achieving the uplift to productivity they are seeking.

Leadership must be about sustained value creationand this means future-proofing the organisation with capacity building and growing capability.

It should not be this difficult – investment in people remains the #1, mid-to-long-term growth and profit maximising strategy available to any organisation – this is what will move the dial the most.  In fact, what drives employee engagement has remained fairly constant and the drivers of the employee experience are no different now despite the accelerated change environment.

The McKinsey report points to the need to invest in the employee experience but the shortcoming is more fundamental that that.  The real question for leaders is: “How do you make people feel?” Do people feel valued and included, do they feel they matter and do they feel that their work has some significance? Simply stated, people who do not feel valued rarely make a valuable contribution.  And, while it is true, that not every productive employee feels valued, it is equally true that every valued employee is productive.

The ‘employee experience’, it must be remembered is shaped and informed, more than anything else, by an employee’s relationship with their leader – this is known as the psychological contract and boils down to the same elements it always has – feeling valued and included, feeling that you matter and feeling that there is trust and respect and fairness and objectivity.  Much more than simply the employee experience, this is about psychological safety and we know, that safety is not a ‘nice-to-have’, it is a game changer for productivity and the bottom-line. This is because the best organisations are the ones where people actually matter to each other and where people are striving to bring out the best in each other.

What the McKinsey report gets right is the suggestion that most organisations are significantly underinvesting in human motivation and that pushing hard to increase output without investment in people is unlikely to result in employees meeting performance expectations.  I say this, because we should all know that autonomy, mastery and purpose are the foundations for engagement and discretionary effort, that these domains tap into our deepest urge as humans to grow and develop and to feel that our lives matter and have some meaning.  These are powerful levers and accessing them gives organisations a huge competitive advantage.

A final thought arising from the McKinsey report is the need to support employee wellbeing, especially in the face of additional demands to lift productivity.  Each day, I pitch to clients that we back our employee development programs with health and wellness initiatives.  Time-and-time again, I have seen that this boosts the return on every dollar invested in employee development.  But, beyond this, it is the right thing to do and more often than not, profoundly impacts peoples’ lives in a positive way.