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What is Organizational Development?
The definition of OD from Wikipedia is as follows. Organization development (OD) is a planned, organization-wide effort to increase an organization’s effectiveness a nd viability. Warren Bennis, has referred to OD as a complex strategy intended to change the beliefs, attitudes, values, and structure of organizations so that it can better adapt to new technologies, markets, and challenges. OD is neither “anything done to better an organization” nor is it “the training function of the organization”; it is a particular kind of change process designed to bring about a particular kind of end result. OD can involve interventions in the organization’s “processes,” using behavioral science knowledge as well as organizational reflection, system improvement, planning, and self-analysis.
When I go into an organization to do an analysis, I look at 6 systems and evaluate the status and effectiveness of each systems. It has been my experience that truly effective and profitable organizations use these 6 systems and the interplay among them to create and manage the chain of events that go on in a company to create profit. These 6 systems are:
- Accountability
- Data
- Feedback
- Communication
- Coaching
- Recognition
I utilize a combination of customer and employee satisfaction surveys, personal interviews, systems audits, financial statement review and observation to evaluate the effectiveness of these systems. To be a true learning organization, a firm must be sure that every member of their team knows what they are accountable for and what the expectations and Key Performance Factors and Indicators associated with that function are. They must be given performance data relevant to their areas of accountability in an easy to use format and on a timely enough basis for them to react. This is the feedback system. There must be a company wide communication system that includes a method for the team leader and each team member to review their performance and for the team leader to provide coaching to help each team member meet their own level of maximum productivity. The communication system must also function to provide information within and between functional areas to help maximize system optimization. The last system and probably the most important is the recognition system. This system is responsible for tying the level of each team members individual contribution to the success of the company to recognition provided to them. This recognition includes everything from salary and benefits, incentives, chances for advancement and whatever else each team member wants. Just as we have learned through our discussion on the use of assessments, each person is an individual and has their own needs. The job of the coach or team leader is to meet those needs in recognition of their contributions.
According to a recent survey, an Organizational Development Professional in this area with an MBA would receive a salary and bonus of approximately $130K plus full benefits.
Ok, so that’s great we don’t have that kind of money but we definitely could use an OD intervention, how can we do it? The answer is to use the Variable Staffing process we have discussed before. Our firm has a division called Just-In-Time Professionals. This team can place highly qualified professionals into your firm on a contract basis to begin to implement some of the OD systems we just discussed. By Using the Theory of Constraints and other analytical tools, our consulting division can help you identify the most important OD interventions you can make that will impact your bottom line. Our JIT Professionals can implement them. Its like the old saying, How do you eat an elephant? One bite at a time.
For more information on how you can make this happen in your organization visit our website or call us.
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This is a key to success with any venture. When doing a business plan remember to do a thorough evaluation of the market. One way to do this is to use the NAICS code for business’ that do what you do and do a search for companies with that NAICS code in your target market. This will give you an idea of who your competition is and a rough estimate of the size of the market.
Organizational Development is also assisted by the development of a strategic plan, where the strategic plan can be used to incorporate organizational development objectives.
Strategic planning provides the comprehensive strategy for attaining your business success, and lays out the course of action, mission, objectives, business initiatives and end result. Strategic planning includes business plan development, where a business plan is the actual roadmap you will follow to accomplish your business initiatives, objectives, mission and course of action. It provides the ‘how’, ‘why’ and ‘when’ you will accomplish these and by ‘who’—you and your team. Your strategic plan translates your vision into actionable steps you will follow to achieve it, what you follow to achieve it, what you have envisioned becomes realty through and by strategic planning, specifically through your business plan. A plan is a series of steps, actions and activities that are followed to attain a goal or goals. A business plan encompasses these and includes end result projections with estimated sales revenue and financial statements, descriptions of core competencies and management team, market analyses including competitor assessment, competitive advantages, market opportunity, and market entry point, and risks, exit strategy.
Jack P. Friedman [Corporate Strategic Planning (Dictionary of Business Terms, Barron’s Business Guides: 2000) pp 145-146] defines strategic planning as “a management process involving determination of the long-term objectives of the organization and adoption of specific action plans for attaining these objectives. There are five interrelated elements of strategic planning including: 1] analysis of the market environment; 2] establishing objectives; 3] performing a situational or SWOT analysis; 4] selecting alternative strategies; and 5] implementation and monitoring the strategic plan.” The emphasis is on the corporation or business entity. However, it fundamentally comes down to your immediate organization structure, and then what you envision it to be when you attain your growth objectives.
A strategic plan typically entails:
1. Vision
2. Core values
3. Mission, purpose,
a. Why your company exits,
b. Why you are in business
4. Success factors
5. Action steps
a. Milestones
6. Goals
7. SWOT Analysis
a. Strengths
b. Weaknesses
c. Opportunities
d. Threats
8. Balanced Scorecard Framework
a. Internal Business Core Competencies
b. Financial Objectives
c. Learning and Growth- Innovation
d. Customer-Client Needs
9. Approach or road map to achieve goals
a. Measured by milestones and
b. Attained thru action steps
10. Business objective
a. End result
The strategic plan will address four critical questions: Who are we? What do we do? Where do we want to go? How do we get there?
Great stuff Sandy! Thanks for your post. The actual source of my 6 systems approach comes from work I did with Dr. Jeff Lorber the co-author with Ken Blanchard of “Putting the One-Minute Manager to Work”. Much of this work is based on Aubrey Daniels PhD’s work . Please add your comments to my posts whenever you can. It will help our readers in their attempts to create successful organizations going forward!
I read with great interest the recent blog post entitled: “What is Organizational Development?” and how it is used to assess an organizations’ effectiveness. The author spoke about assessing organization effectiveness through the application of organization development as a “…..change process designed to bring about a particular kind of end result, [where] O[rganization]D[evelopment] can involve interventions in the organization’s “processes,” using behavioral science knowledge as well as organizational reflection, system improvement, planning, and self-analysis…”, through six principal systems: Accountability, Data, Feedback, Communication, Coaching and Recognition. If I am correct, the basis for this approach is Warren Bennis’ definition of organization development “… as a complex strategy intended to change the beliefs, attitudes, values, and structure of organizations so that it can better adapt to new technologies, markets, and challenges…” Furthermore, the author states that “…to be a true learning organization, a firm must be sure that every member of their team knows what they are accountable for and what the expectations and Key Performance Factors and Indicators associated with that function are..”
I would like to take a slightly different approach, however aligned with the concept of using organization development to improve effectiveness. The beliefs, attitudes and values Warren Bennis speaks about can be considered as or grouped as “corporate culture”, which has been said to be the pulse of and key to understanding an organization. Culture appears in organizations just as it does in society, and fact, draws from society. Hodge, Anthony and Gale in “Organization Theory, A Strategic Approach, define organization culture as a “…two-level construct that includes…organization…architecture, dress, behavior, patterns, rules, stories, myths, language and ceremonies…[and]is composed of the shared values, norms, beliefs and assumptions of organization members. Culture is the pattern or configuration of this…characteristic that orients or directs organizational members to manage problems and their surroundings….” According to organization theory, culture can be a competitive advantage by which an organization can achieve market dominance. Since culture has significant influence on organization behavior and focuses on developing lasting relationships with clients, how organization culture is managed and leveraged is a guide to long-term business success.
Hodge, Anthony and Gale state three conditions that must be met for culture to guide organization success. First, culture must create value in facilitating sales, low costs, and above average profit margins to add financial value to the organization. Second, an organization’s culture must not be commonly found in other competing organizations, or it will risk losing competitive advantages and market share. Third, culture should be unique to an organization making imitation difficult and imperfect. Organizational beliefs, values, norms and leadership philosophy must guide organization development which forms an organization’s structure.
Organization theory points to the congruent nature and relationship between culture, strategy and organization development. That is, in developing a strategic organization design, an approach to follow is the establishment of the “cultural-competitiveness model”; which I developed, based on organizational shared values, direction, mission and belief that the primary focus of an organization is meeting client needs, followed by employee empowerment to meet those needs, then community involvement, concern for the environment; that is using common business sense approaches towards conservation, and then attention to stockholders interests. So by meeting client needs and empowering employees to meet those needs, the interests of stockholders in terms of earnings per share is made possible by following a cultural approach to organization development.