What is organizational development?

What is organizational development?

The CIPD defines organizational development (OD) as the ‘planned and systematic approach to enabling sustained organization performance through the involvement of its people’. The term came about in the 1960s to describe managing and developing the behavioral aspects of people in organisations.

For example, when an organization is looking to improve performance, its competitiveness or perhaps re-orientate the company to suit new market conditions, it will have to consider the people that will make this happen. It’s about identifying which elements of HR are in most need of attention in order to support the organization’s evolution and progression, and tackling them in an integrated manner.

What are the common misconceptions around organizational development?

There’s confusion around defining and understanding what OD is. In fact, in a 2015 Roffey Park survey, the single most common response to the question “what are the main barriers to effective organizational development in your organization” was “managers don’t know what it is”.  I also often get drawn into client conversations only to find that the expectation is that I’m able to do a wholesale organizational design and reconfigure the business structure.

OD can be about organizational structure; that can be an element of the solution offering along with all the other classic areas of expertise HR practitioners bring, but we need to think about the topic more holistically.  I would define it as ‘helping an organization execute strategy to the best of its ability through the engagement and optimization of its human asset’.

A proficient OD professional truly understands the business – they can decipher what aspects of the human agenda require most attention and in what way, to configure an integrated and holistic approach that will directly support business performance and growth.  It’s these interrelationships between the various human interventions that is key.

In today’s modern, digital and fast-moving world, it is inappropriate and insufficient to tackle isolated HR ‘projects’.  The OD specialist’s work is to help the whole business foster the right mindset and capability for organizational progression.

Why does HR need organizational development?

The relationship between HR and OD is symbiotic; both need each other to the same extent. An OD effort without the HR expertise to deliver would be futile.  Likewise, HR departments that deliver disparate initiatives that don’t relate to one another and crucially, don’t clearly support the business goals and ambitions tends to be low on credibility and impact.

The OD umbrella gives many of the more strategic HR efforts meaning, purpose and profile. Even the more routine HR procedures such as remuneration and employee policy, if living under a clear OD strategy, will be infused by the overarching messaging and direction. The net result is an HR effort that is understood by the business, has relevancy, translates more easily to line ownership and is generally more welcome around the executive table.

How can organizational development make your organization better?

OD makes organizations look at the bigger picture and address changes that are needed in order to drive progress and change. It will look at the company objectives, its strategic direction and structure, as well as the culture, and create processes for sustainable long-term success.

If an organization is looking to grow and develop, and is wondering how and where to start, OD expertise will provide the framework and the process required to power that growth via the human asset within the business.

Best practice in organizational development

A client organization I can think of that has an excellent OD approach is a Japanese firm that is highly diligent about planning and cascading that plan from Japan to regions and local markets.  As a result, this UK arm of what is one of the largest corporations globally rigorously plans on the back of this central strategy on an annual basis. Taking an holistic UK market view and setting clear, ambitious goals on a rolling 3-year basis, it also plans, without fail, what the human element to that strategy must be to secure delivery.

This, in turn, informs directly all HR efforts, spend and attention ensuring a cohesive, business relevant and entirely credible agenda of activity. An agenda of activity set by the business, not by HR in isolation.

About the author

Sarah Sweetman, Director, EMEA, Black Isle Group