In a 2019 Deloitte study, 86% of respondents said they needed to change their learning abilities. 84% also said they must change the workforce experience to boost productivity.
Forbes also reported an increase in spending on leadership training. The market for training leaders and talents has grown into a $366 billion global sector.
All these changes and improvements are critical aspects of organisational development (OD).
Whilst OD has been around for decades (since the 1930s), it's still an abstract concept for many. However, it's an integral player in the productivity and effectiveness of an organization. It allows companies to expand their capacity to change and achieve growth.
organisational development does this through the application of behavioral science. It takes into account worker behaviors and motivation. These two, after all, are under the influence of organisational processes and structures.
OD can be quite complex, but it's important to learn how it works and how you can use it for your own firm. Just as crucial is knowing how to implement it so that you can make the most out of your OD strategies.
This post will dive deeper into the ins and outs of OD, so please be sure to read on.
What exactly is organisational development?
organisational development is a practice that involves constant and systematic changes. It focuses on improving processes and activities within an organization.
Behavioral science outlined the framework for the study and the implementation of OD. However, other fields, such as leadership development, are also influencing modern OD.
In any case, OD is a form of scientific study, inquiry, and applied science.
First, it looks into how an organization, as a whole, operates, changes, and performs. It also factors in how a firm manages itself. Moreover, it delves deep into how each member of that "body" behaves.
OD then processes all these pieces of information to discover areas of improvement. From here, it provides a way for an organization to change so that it can improve efficiency. It also uses strategic planning to introduce future changes without meeting resistance.
Another crucial goal of OD is to increase productivity, which can be measured using productivity measurement. It can do so by using the data gathered by the HR department in terms of worker behaviors. Employees may reach out to HR to voice their concerns, woes, and opinions.
However, note that OD is different from learning and development. The latter often places focus on individual workers and entire teams.
By contrast, OD is for the entire organization, starting from the people all the way to processes. Of course, it also concentrates on the overall culture of a company.
A quick history of OD
Kurt Lewin, a German-American psychologist, is behind the establishment of organisational development. Although he is the founding father of OD, he passed away before it became a common practice.
Still, it was Lewin who gave rise to the concept of group dynamics and action research. These two, in turn, are the two primary ideas that support the basic OD process and strategy structure.
OD Definitions Vary from One Organisation to Another
There is no one exact "definition" of OD, as its meaning varies from one business to another.
Let's use Germany's Federal Ministry for Economic Cooperation and Development as an example. Also known as the BMZ, one of its main goals is to develop and strengthen health systems. In this case, one of the purposes of OD is to invest in equipment for health facilities.
In the UK, one of the functions of OD in the National Health Service is for the system to become more sustainable. The healthcare system's plan of OD action, for instance, is to reduce its energy use by 30%.
For a small to mid-size business, implementing OD may be to manage remote teams better. Another purpose may be to figure out the whats and whys behind absenteeism. Or, it could also be to become a greener firm by going paperless through digital employee file.
Whatever the goals your business wants to achieve, there are traits akin to all OD strategies. These include the following:
- Modify the strategies, structures, or processes of an organization
- Monitor the behaviors and performances of each department, team, or employee
- Properly plan corporate changes in a flexible manner to raise its acceptability
- Establish beneficial change as part of the company culture to reinforce change
- Enhance the overall effectiveness, productivity, and profitability of the organization
By keeping in mind these traits of OD, your organization may be more welcoming to change. This means that the people who make up the company are less likely to resist changes to corporate rules. Instead of countering it, they are more likely to support and promote these changes.
Organisational development models
Each organization will respond differently to various OD models. One model may be successful in one firm, but not in another.
Still, models provide a basic framework for organisations to implement OD strategies. As such, OD practitioners need to track the results of their efforts. It's not advisable to follow a model for only a short time and switch if it doesn't yield results right away.
On that note, here are three of the tried and tested models that your own firm may start with.
Lewin's Model
This model is from none other than OD's founding father. The idea is that, for one to enact change, one must prepare for and have the motivation to change too. It's a three-step model, which include "unfreezing," "changing," and "refreezing."
Unfreezing
This involves unlearning old behaviours to implement change. In this stage, it's vital to make people aware of how the current state of the organization is a hindrance.
Therefore, outdated processes, structures, and ways of thinking must change. Only then can an organization become more effective and competitive.
Proper communication is especially crucial here. That's because employees need to understand why there's a need for change. If they get more familiar with the logic, then they're more likely to accept the change.
Changing
After unlearning old behaviors, people are more likely to become receptive to change. "Removing" unhelpful practices, for instance, makes way for more beneficial ones. As such, this is the stage wherein the actual change begins.
Refreezing
The newly learned attitudes, behaviors, and processes become the "new" status quo. In essence, this stage "freezes" the change that has just occurred. From here, the management's role is to stabilize and reinforce the new processes.
Larry Greiner's Model
External forces and pressures stimulate the changes that occur at the managerial level. This, in turn, triggers management to implement change within an organization.
From here, the pressure reaches the top-level management. They, in turn, would run an analysis and diagnosis of what's wrong within the firm.
Just like a "medical condition," the diagnosis plays an essential role in the "treatment." In an organization, this means addressing the disease by curating a solution. Once the solution is available, it then gets enacted and further reinforced.
Leavitt's Model
Also known as Leavitt's Diamond, this OD model is a four-sided system. These four sides include the structure, people, technology, and tasks. As a "diamond," all four sides connect to, interact with, and affect each other.
Therefore, enacting change would mean putting pressure on one side of the diamond. From there, the effect will spread to the other sides connected to it.
OD for Small Businesses
SMBS might find it challenging to implement OD, seeing as they work on many other activities, so much so that previous estimates put the cost of admin tasks at US$5 trillion (£3.75 trillion) a year. Still, with OD being critical for business growth, it's a good idea to implement it ASAP.
You can start by asking the following questions:
- Where exactly is your business now?
- Which direction do you want your business to take?
- How soon do you think your business can reach that "destination?"
- Do you have any strategic plan to take your business there?
- Do you measure the progress of your organization?
Once you've answered these questions, you can start mapping out your OD plan. Don't forget to include the "changes" that you need to enact for your business to achieve your goals.
The role that HR plays in organisational development
With the use of HR software, such as employee directory, HR can gather heaps of data. Such programs make it easier to analyze data, which the human resource experts can then use for OD. Since HR software is automatable, the HR folks can focus on drawing in data that can kickstart OD.
For example, time and attendance software can quickly collect the attendance rate for a particular week. From here, it'll be easy for them to see how high (or low) the absenteeism rate is. By having this knowledge, they'll know if attendance is an issue that OD needs to address.
Another example is HR monitoring functions like the onboarding process. They can launch assessments about the current practices to learn if they work or not. New hires, in turn, can voice out their opinions through such reviews.
The most important thing is for HR not only to launch a change but also to learn from it. This new knowledge, in turn, should then become a part of ongoing development. It's only when these "modifications" bring about positive changes that can truly be OD.
Have any more questions about using HR software to support organisational development? Schedule a free demo today!