More information: https://flevy.com/browse/flevypro/organizational-health-index-ohi-3798 The typical approach to improving productivity focuses on assessing variance in quality, time, rate, service, or cost around which management systems develop incrementally or revolutionarily. In contrast, Organizational Health strives to improve performance through improved alignment of organizational systems. For example, it could be achieved through improving competence of key components such as mindset, work design, technical expertise, or relationships; or through improving the interface between work processes, or interaction between work practices. Simply put, the capability of an organization to achieve its strategic goals and their alignment defines an organization's health. This presentation provides a detailed account of the Organizational Health Index (OHI), the OHI Framework, the benefits of implementing it, key outcomes and management practices, and successful organizational profiles. OHI provides a logical consistency to manage the Organizational Health in quantifiable terms through evaluations and diagnostics. OHI measures an organization against 9 critical health outcomes: 1. Direction 2. Accountability 3. Coordination and Control 4. External Orientation 5. Leadership 6. Innovation and Learning 7. Capabilities 8. Motivation 9. Work Environment The slide deck also includes some slide templates for you to use in your own business presentations.

1. 10/24/2019 Managing Performance by Leveraging the Organizational Health Index (OHI) | flevy.com/blog
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Managing Performance by Leveraging the
Organizational Health Index (OHI)
Contributed by Mark Bridges on May 27, 2019 in Organization, Change, & HR
Organizational Health Index
(OHI)
25-slide PowerPoint presentation
Organizational Health
19-slide PowerPoint presentation
Organizational Health:
Situational-Leadership
Staircase
22-slide PowerPoint presentation
4 Areas of Strategic Governance
for New Board Members
24-slide PowerPoint presentation
The typical approach to improving productivity focuses on assessing variance in quality, time, rate, service, or cost, around which
management systems develop incrementally or revolutionarily.
Organizational Health Index, on the contrary, focuses on improving performance through improved alignment of organizational systems. For
example, by improving competence of key components such as mindset, work design, technical expertise, or relationships; or through
improving the interface between work processes, or the interaction between work practices.
Simply put, the capability of an organization to achieve its strategic goals and their alignment defines an organization’s health. The
Organizational Health Index (OHI) leverages logical consistency to manage the organizational health. OHI entails quantifiable evaluations,

2. 10/24/2019 Managing Performance by Leveraging the Organizational Health Index (OHI) | flevy.com/blog
flevy.com/blog/managing-performance-by-leveraging-the-organizational-health-index-ohi/ 2/13
diagnostics and recipes for success that allow the leaders to calculate and accomplish the
organizational health goals, required to sustain long-term performance.
Organizational health refers to the need to address soft (leadership, direction or culture) and
hard factors (accountability, reporting lines, or controls) affecting performance. The
organizational health index is an ongoing continuous improvement system applicable across
an organization. The OHI measures not only the current health level, but also determines
the next steps for an organization. There are numerous advantages to the organizations
implementing it, including:
Benchmarking organizational health against the rivals.
Aligning the organizational systems, units, and people by communicating shared goals
and priorities; and highlighting and plugging the disconnects.
Improving organizational performance by pinpointing variances and opportunities to improve health and drive business success.
The OHI Diagnostic Framework provides a roadmap for leaders and managers to improve organizational health. It measures the organization
against the 9 most critical health outcomes; these outcomes comprise both hard and soft organizational elements. Careful measurement of
these 9 elements has a proven link with improved financial performance and earning above-average EBITDA margins:
1. Direction
2. Accountability
3. Coordination and control
4. External orientation
5. Leadership
6. Innovation and Learning
7. Capabilities
8. Motivation
9. Work Environment

3. 10/24/2019 Managing Performance by Leveraging the Organizational Health Index (OHI) | flevy.com/blog
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4. 10/24/2019 Managing Performance by Leveraging the Organizational Health Index (OHI) | flevy.com/blog
flevy.com/blog/managing-performance-by-leveraging-the-organizational-health-index-ohi/ 4/13
There are 37 management practices under these 9 health outcomes, developed to help companies identify the behaviors most critical to their
health journey:
1. Direction
Shared Vision
Strategic Clarity
Employee Involvement
2. Accountability
Role clarity
Performance contracts
Consequence Management
Personal Ownership
3. Coordination and Control
People Performance Review
Operational Management
Financial Management
Professional Standards
Risk Management
4. External Orientation
Customer Focus
Competitor Insights
Business Partnerships
Government and Community Relations
5. Leadership
Authoritative Leadership
Consultative Leadership
Supportive Leadership
Challenging Leadership

5. 10/24/2019 Managing Performance by Leveraging the Organizational Health Index (OHI) | flevy.com/blog
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6. Innovation and Learning
Top-down Innovation
Bottom-up Innovation
Knowledge Sharing
Capturing External Ideas
7. Capabilities
Talent Acquisition
Talent Development
Process based Capabilities
Outsourced Expertise
8. Motivation
Meaningful Values
Inspirational Leaders
Career Opportunities
Financial Incentives
Rewards and Recognition
9. Work Environment
Open and Trusting
Internally Competitive
Operationally Disciplined
Creative and Entrepreneurial
Years of research have shown the healthiest companies to align with 1 of the 4 recipes for organizational health. These recipes constitute
concrete management practices and activities for the organization to implement. Leaders need to acknowledge and align to the recipe that is
appropriate for them. They can use these success recipes to plan and implement a change program that results in sustainable outcomes. The
4 recipes for organizational health are:
1. Leadership
2. Market Maker
3. Continuous Improvement

6. 10/24/2019 Managing Performance by Leveraging the Organizational Health Index (OHI) | flevy.com/blog
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Post to Facebook
Add to LinkedIn
Post to Twitter
4. Talent
Interested in learning more about the other recipes for Organizational Health and the OHI Diagnostic Framework? You can download an
editable PowerPoint on Organizational Health Index here on the Flevy documents marketplace.
Are you a Management Consultant?
You can download this and hundreds of other consulting frameworks and consulting training guides from the FlevyPro library.
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About Mark Bridges
Mark Bridges is a Senior Director of Strategy at Flevy. Flevy is your go-to resource for best practices in business management, covering
management topics from Strategic Planning to Operational Excellence to Digital Transformation (view full list here). Learn how the Fortune
100 and global consulting firms do it. Improve the growth and efficiency of your organization by leveraging Flevy's library of best practice
methodologies and templates. Prior to Flevy, Mark worked as an Associate at McKinsey & Co. and holds an MBA from the Booth School of
Business at the University of Chicago. You can connect with Mark on LinkedIn here.
View all posts by Mark Bridges →

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