In the fast-paced, high-stakes world of venture capital, the health of a company goes beyond just financials. To ensure lasting success, VCs must dive deeper—into the often-overlooked realm of organizational health.
Culture, leadership alignment, and employee engagement are crucial factors that drive innovation, retention, and growth. Yet, many venture capitalists find themselves guessing about the cultural dynamics of their portfolio companies. Relying on assumptions or anecdotal feedback often results in missed opportunities. That’s why moving from reactive problem-solving to a proactive, data-driven approach is essential. By accurately measuring and fostering organizational health, VCs can secure a more reliable pathway to sustained success.
The New Era of Business Culture and Its Impact on Success
Company culture is no longer a buzzword or an afterthought. It is a key differentiator in today’s competitive marketplace. Organizations with strong, engaged cultures consistently outperform their peers. Studies show that highly engaged employees make companies 21% more profitable and 17% more productive. On the flip side, disengagement in the workforce is a silent profit killer, costing U.S. businesses between $450 and $500 billion annually in lost productivity. Even more alarming is the fact that 73% of employees are contemplating leaving their jobs due to disengagement. (source)
For venture capitalists, organizational health in their portfolio companies is central to their success. Poor culture leads to high turnover, stagnation, and reputational damage—all of which directly impact profitability and growth potential. By fostering a cohesive, purpose-driven culture, companies become more agile, collaborative, and resilient. VCs who prioritize organizational health are not only protecting their investments from potential cultural crises but are also enabling long-term, sustainable growth (and profit). In this new era, culture isn’t a “soft” issue—it’s a strategic asset that can determine whether a company thrives or fades.
The Ascent Assessment: A Tool for the Times
The Ascent Assessment offers investors and board members a powerful tool to assess and enhance the organizational health of their portfolio companies. This assessment demystifies the often-intangible aspects of culture and leadership, providing clear, actionable insights into a company’s strengths and vulnerabilities. By focusing on the four elements of organizational health (as represented in the Ascent Model), the Ascent Assessment helps VCs zero in on the right priorities for action. In as little as 20 minutes, leadership teams complete a series of targeted questions, and the result is a detailed report that reveals the health of the company in measurable terms.
Choosing Ascent to Avoid Descent: An Overview of the OrgHealth Ascent Model
The Ascent Model offers a structured, reliable framework for evaluating and improving organizational health. This model breaks down a company’s health into four key elements:
Collaborative Culture - the core; evaluating psychological safety, commitment to collective wins, and how well the values on paper are being lived out
Leadership Accountability - the pivot point; evaluating the ELT's ownership of company culture, the impact of their behaviours, and how much clarity they have about their roles
Strategic Momentum - the rudder; evaluating the company's strategy, proactive adaptability, and sustainable profitability
Talent Magnetism - the beacon lit by the other three elements; evaluating best-fit attraction, engagement strategies, and the use of meaningful rewards in retention strategies
By applying this model, VCs and leadership teams can identify and address potential issues before they escalate into larger crises. The stakes couldn’t be higher—misaligned leadership, disengaged employees, and toxic workplace dynamics can derail even the most promising companies, and the talent war is fierce.
By investing in organizational health, venture capitalists are choosing ascent over descent: variables that people often don't address or don't know how to address are now places clearly in front of the leadership team to be intentionally managed. The Ascent Model empowers leadership teams to take targeted, meaningful actions that drive long-term stability and growth.
When cultural problems are identified early, they can be addressed before they become costly distractions.
Analysis vs. Guessing: Bringing Rigor to Culture Oversight
Too often, boards and VCs are left guessing about the culture of their portfolio companies. This isn’t due to a lack of interest, but because culture has long been challenging to measure. Without clear data, leaders rely on assumptions, often missing the early warning signs of cultural dysfunction.
Financial performance and operational efficiency are easier to quantify, but let's be honest with ourselves: many of the factors that have leaders leaving, teams falling apart, and companies crashing are not just about those numbers. Those numbers are lagging indicators of the cultural problems under the surface.
But leaning on "hunches and vibes" is not only suspect depending on the person's emotional intelligence skills, even if it's someone who tends to get a good read on these factors, it can be hard to rally buy-in and support around these pieces from the team at large.
There are tools out there that attempt to zero in on specific pieces like employee engagement, strategic progress, and team communication skills, but even investing in these first require buy-in at the senior team level. The Ascent Assessment is specifically for the ELT. What's happening at the senior team level is always going to trickle down to the rest of the company.
The Ascent Assessment eliminates this guessing game by providing a rigorous, data-driven approach to measuring organizational health. With a detailed report and actionable recommendations, VCs can confidently address risks and guide leadership teams in making necessary adjustments. By relying on measurable data rather than intuition, VCs ensure that cultural problems are identified and corrected early, preventing them from affecting performance and profitability.
Make Organizational Health Part of Your Portfolio Management
To safeguard your investments and unlock the full potential of your portfolio companies, organizational health must become a core part of your strategy. The Ascent Assessment offers the structure and insights needed to make deliberate, data-driven decisions about culture and leadership. By prioritizing culture and engagement, venture capitalists can protect their investments from the negative impacts of poor organizational health, while creating opportunities for these companies to excel.
The Ascent Assessment doesn’t stop at identifying issues—it guides teams through discussions and strategic planning to ensure that cultural challenges are addressed with precision. The report is laid out with this intent, and we offer a guided debrief option with add-on coaching packages to support implementation as targeted growth areas and goals are committed to.
For venture capitalists looking to foster resilience and long-term growth in their investments, the OrgHealth Ascent Assessment for Teams is an indispensable tool. By integrating it into your portfolio management strategy, you can make informed decisions, mitigate risks, and foster growth. In today’s business landscape, organizational health is a critical driver of success, and with the Ascent Assessment, your portfolio companies will be positioned to achieve it.
