Organizational development: Getting a holistic view of your organization

Think of a company that’s been around for a long time. In their heyday, they were extremely successful, and products were flying off the shelf. Nowadays, they’re struggling. The tactics that they used in their prime are now no longer working, and leaders don’t know what to do to bring their business back. 

Businesses are a lot like humans in that they are constantly adapting and growing, so strategies that used to work may not work in different environments. One way leaders can effectively ensure that their business stays competitive over time is through organizational development.

What is organizational development?

Organizational development (OD) is a form of behavioral science research that aims to improve how people work. The goal of organizational development is to improve your business’ current processes, or establish new ones if your team decides to make changes.

Anybody within a company can practice organizational development. While it’s most effective when leadership instills organizational development throughout the entire company culture, it is possible for just one team—or even an individual—to practice it on their own. 

What’s the difference between organizational development and HR?

You may have heard organizational development called a subset (or function) of human resources, but the reality is a little more nuanced.

Your HR department’s job is an individualized one—HR team members are focused on supporting the individual people that make up your organization and their needs. On the other hand, organizational development is more about the strategy your team takes to ensure business success. HR professionals often learn about organizational development, but OD is an umbrella that includes HR as one of its strategies. For example, an HR professional may work on ways to help create a more positive company culture as a strategy of organizational development.

Common organizational development strategies

The organizational development process varies from one organization to another. Like human bodies, all organizations are unique, and a strategy that works for one may not work for another. The OD process helps you look at your organization holistically and apply different strategies—referred to as interventions.

Here are few examples of common organizational development interventions you may come across:

 Individual employee development interventions:

• Career coaching

• Leadership development

• Certifications

• Mentoring opportunities

• Team building strategies

Organizational technical structure interventions:

• Readjusting team structure

• Work design (the specific organization of an individual worker’s work and responsibilities)

• Project management strategies

• Quality management strategies

• Performance management strategies

Human relations interventions:

• Diversity and inclusion initiatives

• Wellness programs

• Talent management

• General employee engagement

The 7 steps of organizational development

The process of organizational development has seven steps.

1. Entry: Scope out the current problem with your team. This could mean simply observing or brainstorming key issues that you want to improve.

2. Diagnostics: Understanding and documenting how your processes currently work. This is important for establishing a baseline understanding of the current organizational effectiveness before you make any changes. This is an essential step for benchmarking your metrics. 

3. Data collection and analysis: During this stage, an OD professional will collect data to provide evidence of a problem. This could look like employee interviews, existing process documentation, current success metrics, or collecting baseline metrics. During this stage, make sure to establish both KPIs and OKRs. This will make it easier to measure the success of your changes.

4. Feedback: The OD professional will offer feedback on your team’s current processes by looking at diagnostics and analyzing the data collected in steps two and three. Then, the OD professional suggests potential process improvements.

5. Designing interventions: This is the stage when the OD professional develops a strategy for how things will change. When designing these interventions, an OD professional should consider company goals and organizational capacity to ensure the interventions are possible within the relevant time frame.

6. Implementing and managing change: After all interventions are developed, it’s time to implement them as new processes. Use a change management process to ensure that change happens smoothly, and any issues are properly addressed. This is especially important if you’re doing a major change process—such as restructuring your team—or major organizational changes like a merger or acquisition.

7. Evaluation: Much like any strategic change, it’s best to monitor performance by measuring success metrics. 

The 4 guiding principles of organizational development

OD looks at your entire organization as a whole, and it’s important to use some guiding principles to ensure your strategy is headed in the right direction. To get started, check out the four main pillars of organizational development:

1. Mission statement: A brief declaration of who your company targets, what they aim to do, and why. 

2. Vision statement: If a mission statement covers the who, what, and why, a vision statement covers the “how.” 

3. Company goals: These are the measurable outcomes that you want your team to achieve. 

4. Strategy: The plan for your team’s next three to five years. 

Benefits of organizational development

Because organizational development looks at your business as a whole, there are a variety of different positive outcomes you might see. Some of these benefits include:

• Increased productivity

• Increased efficiency

• Employment growth and retention

• Increase in product quality

• Improved communication

• Fostering innovation

Organizational development is for everybody

Organizational development is not the responsibility of one person—it’s a holistic movement for the entire organization. When everyone works together to further your company’s organizational development, you’re ensuring the efficiency and productivity of the entire company.

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