What is organizational development

Their strategy may be to address issues and bottlenecks to stabilize the environment so the mission continues. A startup might use OD strategy to create a compelling company culture to retain employees. This is especially critical when capital may be limited and employees trade sweat equity for real equity. Many competitive startups are vying for top talent. In a sales based company with a fast-paced promotion ladder for achievers, sales managers may be weak on management and strong on sales.

Organizational development can partner with sales enablement to identify gaps and provide training. The process of organizational development has several moving parts. There are 5 initiatives to the organizational development process. Where is improvement needed? Depending on the organization, this can be focused on one department or entire organizational entity.

Diagnosis requires data. The collection of data requires a holistic approach. One process can have far reaching tentacles to multiple other processes and departments. Once data is collected the analysis and method requires a scientific objective approach. Organizational development allows the data to tell its own story. This is the design and development of a set of solutions or one specific solution to address the diagnosed problem.

The implementation of the strategy requires alignment of workforce, stakeholders, and internal procedures. Above all, it requires communication of the goals and motivation behind the strategy. This second round of data collection is continually assessed. It ensures that the implementation is actually addressing and improving the target area. This requires hard data, reporting, and employee and stakeholder input on the value of the changes.

Kurt Lewin , thought of as the father of organizational development, simply called the change process unfreezing , change , and refreezing. Determine what needs to change. Create an environment that supports the changes that will take place.

Implement actions, involve people in the plans for change while communicating often about the actions taking place and the plan. The OD process seems fairly simple at a first glance, but to enact any change requires clarity. Additionally, there are four guiding principles, or pillars, to keep in mind in the organizational development process. Those pillars are mission , vision , strategy , and goals. Total quality management.

Total quality management is also known as continuous process improvement, lean, and six-sigma. It grew out of a manufacturing emphasis on quality control. It places customer satisfaction as central to the long-term success of an organization.

To achieve this there is a strong focus on total employee involvement in the continuous improvement of products, processes, and workplace culture. Companies such as car manufacturer Toyota and phone manufacturer Motorola, use this intervention.

Work design. All work should be done in order to achieve outcomes. These outcomes vary across organizations. Work can be designed to achieve an outcome as quickly as possible. Or, emphasis may be placed on employee satisfaction which can lead to a higher quality of outcome, but often this is more costly. Depending on which approach your organization chooses, the skills needed will differ. Designing work in a way that leads to optimum productivity is called work design. Job enrichment.

Job enrichment is part of work design. The goal here is to create a job that is interesting and challenging for the person doing it. Examples of factors to be taken into account are skill variety, task identity, autonomy, and feedback. These are organizational development techniques that focus on the way the individual is managed.

Many of these are part of HRM functions. Performance management. Good performance management includes techniques such as goal setting, performance appraisal , and reward systems. Developing talent. Diversity interventions. Diversity is a source of innovation. This includes age, gender, race, sexual orientation, disabilities, and culture, and value orientation. These OD intervention techniques are aimed at increasing diversity. Wellness interventions. Employee wellness interventions include stress management programs, and employee assistance programs.

They address social factors and aim for a healthy work-life balance. These organizational development techniques focus on the change processes that shake the organization to its core.

The OD department plays a crucial part in executing on this change. Transformational change. This is a process that involves changing the basic character of the organization, including how it is structured and the way it operates.

For example, Nintendo is famous for video games. However, the company was founded in to create card games. Due to changes in consumer interests, Nintendo shifted to electronic toys, and later video games, from the s. Continuous change. Continuous change is an intervention that enables organizations to improve gradually, by making small incremental changes. A popular example is the learning organization. This approach places more importance on learning from mistakes and failures, than punishing them.

Transorganizational change. Transorganizational change involves change interventions that move beyond a single organization. This includes mergers, allying, acquisitions, and strategic networking.

A common type of transorganizational change is when a company buys, or merges with, a competitor. As we mentioned, this is not an exhaustive list. Techniques like financial planning, long-range forecasting, integrating technology, workforce planning, and designing appraisal systems can be added, as well as many, many more. Policies such as performance management, goal setting, appraisal, and talent management practices are all important in achieving effective organizational development.

Using tools like organizational design, individual and group interventions, work design, and more traditional people interventions, OD can operate at all levels of the organization. These levels are organizational, group, and individual. However, the focus is always on strategic themes, whereas HR is often a lot more operational.

Sometimes, OD functions are located in the HR function, but not always. External strategy consultants also frequently utilize OD techniques in change management projects. Both HRM and OD have their roots in the business strategy — the mission, values, and vision of the organization. Both outline the actions needed to implement that strategy in their respective fields.

In addition, many early people analytics initiatives originate from the OD department. For an HR professional, there are huge benefits to mastering them. The term OD emerged in the s, as a way to describe managing the behavioral aspects of people, within organizations. Understanding OD means you can identify which elements of core HR functions need to be focused on, in order to support the organization as a whole, in becoming more efficient.

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Resources Resources Hub. Culture Culture Economy Report. What Is Organizational Development? Organizational change and development can be a long, sometimes overwhelming process, but companies usually begin with several goals in mind: Ongoing improvement. Changing company culture to view new strategies as a positive growth opportunity allows for ongoing improvement and encourages employees to become more open to change and new ideas. New strategies are introduced systematically through planning, implementation, evaluation, improvement, and monitoring.

Better or increased communication. Employee development. Employee development comprises training and work process improvements that help everyone keep up with shifting demands. Product and service improvement. Organizational development leads to innovation, which can help improve products and services.

This innovation often comes as the result of intensive market research and analysis. Increased profit. Organizational development helps increase profits by optimizing communication, employee processes, and products or services.

The Process of Organizational Development The organizational development process is a systematic, research-based series of steps. Common implementation steps include the following: Identifying an area of improvement. Organizational change begins with identifying a need that aligns with business goals. Companies often know that need right away, but they may consider a data-driven approach to identify problems through formal surveys and feedback.

This approach allows for a more thorough understanding of the area for improvement. Companies should ask themselves what they want to change, and why that change is necessary. Investigating the problem. Once the area for improvement is identified, companies conduct an investigation to learn why the problem exists, what the barriers to improvement are, and what solutions have previously been attempted.

This step can also include surveys or focus groups and individual consultations. Creating an action plan. The company then creates a plan with allocated resources and clearly defined employee roles. This plan will include specific support for individuals involved and identify a measurable goal.

Creating motivation and a vision. Once the company has clearly defined and communicated a plan, its leaders must motivate their employees to share in a vision. While stability is necessary during implementation, supporting employees during the transition with mentoring, training, and coaching is equally important. When thinking about such support, management should consider what new skills employees will need and what delivery methods will be most effective.

Ongoing feedback and communication can help make the change process easier. Evaluating initial results. Once the company has implemented a plan, its leaders may create space for shared reflection, asking themselves and their employees if the change effectively met the business goals. Adapting or continuing. Depending on the evaluation of the initial results, the company may choose to adapt its plan.