What is organizational development?
Let’s see what Wikipedia has to say. A fundamental definition would be: Organization development (OD) is the study and implementation of practices, systems, and techniques that affect organizational change. The goal of which is to modify an organization's performance and/or culture.
OD is not something subjective; it is an interdisciplinary field of science that has the primary goal of improving where people work. It’s not about trying a lot of new things and seeing what happens.
It’s not only about improving existing processes but also about creating new ones.
Organizational development is about maximizing people’s potential, effectiveness, productivity, and also the company’s power.
It’s very likely that you are already doing OD without realizing it by putting together great teams, giving them the best to work with, and solving problems when they arise. But your managers must be aware of the organizational development because, in this way, they will be more open to changes and will pass on this attitude to their teams.
Organizational development in its simplest structure contains 2 points of interest:
- Organizational Structure AND
- People Development.
Goals of organizational development
The fundamental goal of OD is an improvement. But keep in mind: improvement can mean different things to different companies, depending on their size, industry, culture, etc.
One thing is sure: change is a constant in business. Organizations must stay on top of all the changes in technology, customer demands, and tastes. So this is why you need organizational development.
So we say improvement is the ultimate goal of OD, but let’s see in what areas can your organization improve:
- alining employees with the company’s mission, vision, and values
- creating a friendly environment in the company
- enhancing problem solving
- increased profit
- better communication between employees and management
- emphasizing the idea of feedback within the organization.
The process and examples of organizational development
You need a game plan when deciding that your company needs and could benefit from organizational development.
Here are a few steps to follow to make sure you don’t start a useless process:
One size does not fit all. Depending on each organization (for example, a non-profit doesn't have needs for improvement in the sales area, such as a fintech or pharma business), the OD can be directed at specific departments or the whole system.
B. Assembling data and analysis
You have to collect employee data that will show you what impact the changes you intend to make. Analyze it then and see if those innovations will affect anyone in your organization and how.
C. Designing the strategy
Decide over a solution or more solutions to address the problems you found in the first two steps.
D. Implementing the strategy
When it comes to implementation, make sure you communicate the strategy clearly to employees, managers, and stakeholders. For this step to be successful, you need alignment in internal procedures and, most of all, motivation coming from all involved parties.
E. Assessing the process and the results
Now you need feedback for the implemented changes from employees, managers, and stakeholders. Make sure you receive objective opinions to have a clear and accurate perspective.
“Good management is the art of making problems so interesting and their solutions so constructive that everyone wants to get to work and deal with them.” – Paul Hawken.
The pool of OD examples is huge, and as mentioned above, it depends on many factors such as the size of the business, industry, culture, etc. But just so you get an idea, here are some organizational development examples:
- Employee constant training - is crucial for businesses of all types. Workers need to remain productive and ambitious at all times. Training the workforce should be an ongoing process.
- Product improvement - researching and developing new products is essential in some industries, and it can be the point of change your company needs. Keep in mind, though, that this can take a lot of time to generate tangible results.
- Cultural change - don’t dismiss the importance of an organizations’ culture. It’s the cornerstone of productivity and high performance. Therefore, it is essential to align your culture with its mission and see it as an extended effort.
The role of the HR department in organizational development
First, let’s make sure we emphasize the difference between human resources and organizational development.
Organizational development has sometimes been misunderstood as a function, task of HR. However, the main focus of HR is people, while the focus of OD is the whole organization.
Human resources deal with individuals, and organizational development is about seeing a comprehensive picture, having a more holistic approach.
Since the difference is clear, it does not mean that there isn’t a relationship between HR and OD.
Your HR professionals must see OD as a constant effort, not as a one-time process.
HR leaders are responsible for communicating the goal and mission of the OD to the employees and maybe even to managers. They will have a say in designing and implementing the organizational initiatives and then will oversee the process.
There is a blurred line between human resources and organizational development, mainly because of the concept of “strategic HR,” which has gained a lot of meaning lately.
The ultimate goal of OG is to upgrade the people’s side of the business. In seeking this goal, your should work with all professionals, not only the HR department.
HR will have active roles in OD in the following areas:
- Talent: searching for new talent continuously and fostering current employees into becoming better every day.
- Performance: creating an adequate system for measuring performance and developing a plan so that the employees can be at their best.
- Development: design a plan for continuous training and development.