In the 1980s, business leaders were fascinated by “Kaizen”, a Japanese term meaning “continuous improvement”. Kaizen was one of the secrets behind the incredible industrial success of Japan at the time. Although Kaizen is no longer discussed in boardrooms, its older iteration – organizational development – is still essential for companies willing to go the extra mile to achieve excellence.
What Is Organizational Development?
Organizational development (“OD”) attempts to improve an organization’s capabilities by coordinating the optimization of strategy, skills, structure, motivation, management, and assessment processes. OD involves numerous disciplines such as learning and development, psychology, social sciences, human resource management, innovation, research design, and organizational behavior. Organizational development is a long-term effort, and although it is a linear process, most Organizational development programs incorporate feedback loops that involve a continuous cycle that returns to the initial phase.
Why is Organizational Development Important?
Organizational development requires the cooperation of a company at every level, with a focus on detecting and resolving problems. This unrelenting effort can result in numerous advantages.
Constant strategic adaptation:
A common maxim is “the only constant is change”. Whereas some organizations tend to review strategy on a periodic basis, a company involved in Organizational Development will frequently update its strategy to reflect a constant flow of recommendations that emerge from the process. This mindset will result in an organization that has change management as a familiar initiative, as opposed to companies that need to implement change management quickly (and therefore less effectively).
Organizational development affects everyone from production line workers to senior executives. Along the entire organizational hierarchy, staff members provide input regarding potential areas of improvement. This flow of information can benefit communication throughout the company.
Growth of skill levels:
It is sometimes the case that organizational deficiencies are a matter of insufficient training. OD programs therefore lead to the implementation of learning and development initiatives. In themselves, such initiatives increase the competency level of workers. Additionally, L&D programs increase employee satisfaction and retention.
Whether an organization sells a product or service, an effective organizational development program can result in a higher level of output, both in terms of quantity and value.
How to Create an Organizational Development Program
The first stage of an Organizational development program involves setting up the organizational infrastructure that will manage the process. There are organizational development specialists who can administer such programs, although many companies employ their own human resources staff for this purpose. In either case, the outline of the organizational development program must be presented early in the process to management in order to receive their approval and commitment to provide resources. The outline will touch on subjects including the hypothetical organizational problem (subject to change during a later phase), a timeline for program execution, resource requirements, and personnel involved. Once this initial phase is complete, most organizational development programs follow this process:
Collection of data based on the initial definition of the problem. Interviews are conducted with stakeholders throughout the organization, as well as accounting personnel who can provide a quantitative description of the problem. At this point, the Organizational development manager might discover that the original problem definition was not valid. Such an occurrence might require revision of the first program stage, and almost certainly the assessment phase.
Data from the assessment phase is processed and analyzed, and a plan of implementation is developed. Refinements to the initial organizational development project plan might be required. At the end of this phase, the OD team should have an action plan ready, as well as a set of current performance benchmarks and future goals.
The resources for the action plan are sourced and the development initiatives are carried out. Coaches, mentors, and trainers are identified and set to work observing, recommending, and instructing. Experts and consultants can be hired to assess current methodologies and provide recommendations. Change plans are organized to cover, for instance, communication, roles and responsibilities, training, and risk management. Changes can be effected through ‘interventions’, where the development needs of the individual, group, and organization are addressed and corrected. This can include, for example, production problems, skill gaps, organizational changes, and pending opportunities.
A continuous process of evaluating the efficacy of the organizational development program. This is a common juncture for the occurrence of feedback loops by which stakeholders analyze progress to date and, if required, repeat the organizational development process for remaining areas of weakness or new issues.
What Is Organizational Development in HR?
The human resources department plays a crucial role during the various steps of an organizational development program. HR is usually in charge of L&D programs that improve professional skills. An organizational development program will also affect setups related to people management issues like motivation and assessment. Finally, on a macro level, any recommended changes to organizational behavior resulting from an OD initiative will be the responsibility of HR.
An OD Practitioner’s Required Skills
Organizational development is dedicated to improving specific aspects of a company’s abilities. Whenever challenges are encountered, they are addressed through change management. This is a skill in itself, and carries with it numerous skill elements. These include communications, problem solving, critical thinking, and time management.
Organizational Development Certification
The necessity of constant change has led HR-based learning institutions to provide courses in OD process management, leading to certification. By obtaining professional-level instruction, experts can turn their organizational development initiative into a competitive advantage. Some of the leading OD certification courses include those provided by AIHR, the Institute of Organization Development, and the Association for Talent Development.
Examples of Organizational Development
Each organizational development initiative is focused on a major company function, which in turn, affects basically everything that the company does. Here are some of the main tasks that can be the subject of organizational development:
A revised R&D process
This can be an effort to implement new techniques, a requirement for the invention of a new product, or a way of troubleshooting issues that arise over time.
Reskilling and upskilling
L&D programs are an integral part of OD and are a classic example of a long-term objective that empowers an organization with a solid core of skills.
A new culture
Particularly in the wake of Covid-19, companies are realizing the benefits of consciously adopting a culture that fits their operational and moral goals.
What Are the Main Challenges of OD?
As with any change-oriented processes, organizational development faces a number of challenges:
Unless there is a serious crisis that requires an immediate overhaul, organizational development can cause disruptions to the standard working day.
One of the main reasons for organizational development is to move the company to a higher level of productivity and skills. However, there will always be employees who resist that change, both openly and passively. OD can also result in interpersonal conflict. Both of these issues require the close participation of management.
A change initiative might start at the top, but getting the message through to all levels can be difficult. It is important to constantly monitor the progress of the organizational development program to ensure it is working as intended.
OD Interventions and Examples
The ‘vehicle’ for implementing OD is called an intervention. This is a structured process where the building blocks of an OD plan are made. There are four basic examples of OD interventions:
This involves changes to organizational functions that are essentially the domain of HR, such as issues related to DEI, employee development, and employee assessment.
The goal of an intervention in this case seeks to improve interpersonal communications and dynamics.
These are aimed at altering the way people interact with the technological aspects of their work by, for example, changing workflows.
This is a transformational change that can result, for instance, from a merger or a restructuring.
Organizational Development Models
The extent of an OD program can easily lead to disorder. To keep things manageable, various models have been developed to keep practitioners and the organization on track. These are some of the most commonly used models:
Greiner outlined OD as a process that occurs in a certain order. It also happens as a sort of stimulus-response cycle, where an external pressure forces the organization to change, which in turn causes various changes within the company.
Lewin’s Three Stages
Also used in change management, Lewin’s model proposes that an organization stop a certain process, analyze and adapt it, and then make it a fixed element again within its operations.
In this organizational development model, organizations consist of four subsystems (people, structure, technology, and tasks) which are all affected when one element is changed.
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