Organizational development is a collaborative effort, often involving company leadership and practitioners, to promote and facilitate effectiveness and vitality in organizations.
This is a concept that can be applied to any business, regardless of size. In our article, you’ll get a good overview of organizational systems and the organizational-development process. Most companies, whether a small business or a large corporation, can implement this business strategy in their workforce planning.
What is organizational development?
Organizational development (OD) is science-based, relying upon evidence, data, and human behavior. It links areas of the business together, including human resources and change management, and often incorporates learning and development. It’s a continuous process, for new organizational structures and old alike, as companies grow and change.
While human resources can certainly be involved, development efforts differ from human resource management. That’s because OD emphasizes approaches to help organizations adapt and improve major capabilities and overall organizational effectiveness. In other words, the various goals of OD go beyond such traditional HR goals as employee engagement and leadership development. OD incorporates all business goals to help the organization achieve growth, higher productivity, and increased power and profit margins. So it can touch everything from team building and effective management, to the formation of business alliances within companies involved in emerging markets.
What HR and OD have in common is that both are people-centric processes. In practice, however, they vastly differ. HR initiatives are operational and focus solely on people practices. On the other hand, OD is holistic and strategic. It follows specific protocols, clearly communicated from management to employees, that affect both the breadth and depth of the organization. In practice, strategies associated with the human resource approach can actually be considered a subset of OD.
Bottom line: OD affects behavioral changes across the large organization or small company, not just segments of it.
Organizational development (OD) is science-based, relying upon evidence, data, and human behavior. It links areas of the business together, including human resources and change management, and often incorporates learning and development.
The organizational-development process
While different terms may describe the OD process, the fundamental methodology is the same, albeit involving complex and systematic processes. Here are the 5 steps.
The assessment stage, often referred to as the “entry” stage, is the first step. It requires the OD consultant and his or her client to evaluate existing circumstances and pinpoint problems. As a company grows, its goals and needs change. Involved parties can assess the current situation, factor in scalability needs, then proceed with actionable steps toward improved business processes.
The investigative step is a deeper look at identifying and analyzing problems. Essentially it’s a collaborative effort between consultant and organization to perform an insightful data collection process. This will empower them to diagnose problems so solutions can be developed. It’s important to be objective and think about all potential solutions before moving on to the solution phase.
This stage represents an actionable plan designed to rectify problems. Potential solutions may include one or more of the following: communication plan, risk-management plan, change-management plan, and/or training plan. Participants should create solutions that aim to address specific issues. Not utilizing data or understanding the problem will create problems, so it’s important to carefully consider the pending change process.
At this stage, organizations are best served by taking a science-driven, structured approach. The consultant delivers analyzed intel to the organization, and it’s the latter’s responsibility to take action. Change can be hard, and many people resist it. By taking specific steps that are well-communicated, organizations can enact change that is well-managed, making it more digestible for everyone.
As in most science-driven processes, the last step is to evaluate. Are the changes meeting the goals? If so, the results should demonstrate significant organizational performance management success. If something resulted in change failure, organizations can review potential factors that led to the failure and make adjustments.
Maybe you’re looking to expand into new markets, improve talent management, or invest in other company-building endeavors. Whatever your development efforts, following the OD process can lead to the organizational growth areas of your choosing.
Types of organizational development initiatives
OD initiatives, also referred to as interventions, are important organizational-development processes to develop both strategic planning and continuous improvement. Sometimes this may involve joint ventures, either internally or externally, between departments or with other organizations/partners.
This form of organization development involves people-centric initiatives. Solutions can include team-building activities, interpersonal growth strategies, coaching, and group intervention process approaches. Initiatives focusing on management skills and employee wellness can also play into an equation for success.
For instance, you can provide individual employees with mentoring/coaching (good for starting new employees off on the right foot). Or group interventions/training to assist teams with any new structures, responsibilities, or other factors affecting the whole group.
Technology plays a considerable role in the modern organizational environment, which means ongoing change as tech evolves and expands.
Technology plays a considerable role in the modern organizational environment, which means ongoing change as tech evolves and expands. Initiatives linked to techno-structural processes abound. Think flexible work designs, downsizing, mergers, acquisitions, total quality management, quality of work-life, and business-process engineering. Many organizations use specific strategies such as Six Sigma and TQM.
Human resources management
Interventions are primarily related to employee experience, engagement, and performance management. Initiatives can involve things like goal setting, reward systems, wellness, career development, diversity awareness, and performance appraisals.
A large part of organizational development interventions is to implement strategic change. To achieve significant organizational growth, you can initiate those that include cultural change, organizational and transorganizational transformation, and leadership development.
Bringing it home
Instilling OD steps requires commitment, research, and a willingness to go the distance creating initiatives that’ll succeed and accomplish goals. Is your organization ready to level up? Get timely and helpful HR and business-management insights from Workest here. Then begin your own organizational development journey, and prepare your workforce to tackle business change like the pros they are.