February 16

What is organizational development?

By Chuck Coker

Organizational Development (“OD”) is the process of moving an organization toward achieving its marketplace objectives. This can only be achieved by engaging, developing, and providing the organizational team with the resources that fulfill their mission vision and values (MVV). To accomplish that, executives, leaders, managers, and all team members must have the same objectives and understand how their role impacts the performance, productivity, and profitability of the organization.

During the 1930s, research indicated that organizational behavior influenced employee behavior, performance, and group dynamics. Present-day research validates those earlier studies conclusively. However, each organizational culture is different, so there may be variables as to how your team must research, study and implement successful organizational change to accelerate performance.

OD requires that you deeply examine, assess, and intervene within your culture. You must use all available data to determine which phases of your business processes will require intervention. Often, the first-place organizations being is in onboarding. A program that ensures that all employees’ views of the organization and the value of their role (and its contribution) are critical to avoid interdepartmental conflict.

Most organizations make their decisions for intervention based on the results of an OD assessment. The results will generally impact the techniques used to drive the change necessary to achieve specific goals and objectives. Employee engagement, satisfaction, and 360 surveys are often used when there are questions about compensation, benefits, leadership/management, or organizational structural issues.

It’s important to remember that you must apply good research, data, and analytics, rather than subjective or circumstantial evidence that worked groups in Fast Company or CEO Magazines. Every culture is different and needs unique OD processes and outcomes.

Some of the most common OD processes include cultural alignment and/or change, leadership development, performance management, change management, employee engagement, and training and development programs. However, you must keep one thing in mind, and that is that Organizational development can take months and possibly years. This is NOT tactical HR interventions or activities. It requires addressing the mindset of the organization – and that starts and ends with its people.

 Isn’t people and organizational development an HR issue?

Organizational development and human resources are at times interconnected as they both work with people, but they are not the same.

HR focuses on the strategies, processes, and policies related to the placement, management, and development of employees within an organization. They focus on managing and supporting employees so they can perform within the organizational structure, without departmental or organizational blocks interfering.

OD, on the other hand, focuses on directing and moving the organization toward achieving its goals and objectives. They accomplish this by facilitating employee’s development of their skills, abilities, and knowledge to increase their value within the organization.

Here are some key differences between the two functions:

Organizational Development Department Human Resource Department
  • Interactional: vision and values creation; team building and cohesion; cross-functional team dynamics; cross-cultural and international dynamics.
  • Recruiting/placement: recruitment, selection, and termination activities; diversity and inclusion programs and succession planning.
  • Structural: organization structures (flat, matrix, team-based); lean and Six Sigma total quality management techniques.
  • Leadership/management actions: performance management; compensation and benefits administration; legal employment standards compliance.
  • HR interventions: performance management systems; compensation and rewards programs; leadership training; Diversity initiatives; health and wellness programs.
  • Developmental roles: training and education programs; workplace culture initiatives; performance coaching.

 

Let’s consider one of the examples above that has some “overlap”, performance management. After the HR professional has met with leadership, the OD professional will identify how a performance management system could be used throughout the organization not just for a single or few employees. OD will often leverage typical HR activities to drive organizational change, making this a coordinated effort of both departments.

OD’s role is “Painting the picture and managing the path to employees embracing change.”

Every employee, at some point or another, should be impacted by the OD department. In order for OD’s interventions to be successful, each and every employee must buy-in and fully embrace the new direction if the organization is to be successful. In today’s economy and marketplace, we find ourselves in constant “change mode.” Covid has intensified this reality. Therefore, organizations must constantly adapt to new circumstances and challenges, to create their culture so it thrives on change. Change management or the approach to transitioning individuals, teams, and organizations from their present state to a desired future state is what OD is all about.

HR team members may have OD experience, allowing them to make help guide OD practices when an organization decides to move forward with a change. Organizational development, on the other hand, will almost always have a direct impact on HR because every OD intervention requires change. Change can increase employee stress and anxiety, and cause confusion and uncertainty. Part of HR’s responsibility is to work with managers and leaders to ensure the health, well-being, motivation, and engagement of the company’s people.

Depending on the size of your organization, you may not have a devoted team or individuals to OD and HR. Instead, the role may be apportioned to various individuals. If that is the case, an OD professional with an HR background should become your “go-to” person to ensure you lay the foundation for a culture of change.

And that is where the process can get tricky! And here’s why:

  • An organization’s priority is “Can the employees do their job and will they?”
  • The employee’s priority is: “Is this a good place to work and will they grow and develop my resume?”

How do we know that? Recently I conducted a survey of 1463 executive teams concerning what impacted their productivity, performance, and profitability. There were eight common factors in over 1200 of those responding. Six of the eight responses were people issues with (74%) indicating that a lack of a career development process was an employee’s greatest concern. Sine statistics illustrate that 68% of the population is changing adversely, this lays a lot of responsibility on the necessity of OD executing at a high level. Otherwise, your company will fail, regress or simply “hit the wall” and not achieve its potential.

YOU should care about your organization’s development

By now you should have a better understanding of organizational development. If you have a desire to grow your organization then you may need OD for programs like this:

  • Mission, vision, and values statements
  • Growing and developing future leaders
  • Addressing cultural or structural changes
  • Introducing a new performance management process
  • Rolling out a new project management software
  • Implementing lean or Six Sigma methodologies.

Every leader wants their organization to grow, and growth means change. By practicing organizational development with purpose and intention, starting from Day 1, you can ensure that the changes you make will be successful in the long run.

You may also like:

Organizational Development Consulting

The Four C’s For Organizational Success

 

 

About the author 

Chuck Coker

For more than 30 years, Chuck has focused his career on people's development. He has implemented proprietary Personal Formation, Human Capital, Talent Management, and incentive-based programs across a broad scope of Fortune Companies, regional organizations, and educational institutions.


Tags

Change management, HR, Human Resources


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