Is Organization Development suitable for my company?


Our definition of Organization Development: OD is a systematic change process to improve the performance of the organization, with the following characteristics:

  • The change is planned. The plan is based on a "diagnosis" (research, assessment) of the organization.
  • OD has a holistic approach: it considers people, processes, systems and structures. OD combines business and operational disciplines with Organizational Behavior.
  • The "People" part is central in Organization Development. The change is planned and implemented via PARTICIPATION of employees.
  • OD works in continuous improvement cycles of Research - Planning - Implementation; - Research - Planning - Implementation; - Research - Planning - Implementation; ...This method is often referred as "Action Research". The Research phase often called "Diagnosis" or "Evaluation". The Implementation phase is often referred to as "Intervention".

For example, we have been working with a Client for seven years, going through five cycles. The first Diagnosis consisted individual interviews with the AP VP (the number one decision maker) and each member of the Executive Committee, and an employee survey (the predecessor of ODMap). The first round interventions were: team building and soft-skill training for the Executive Committee; individual coaching to some of the committee members; and setting up an employee suggestion system. Since that we have completed the employee survey five times. They have gone through tremendous changes. The last time the improvement actions were: 1)Setting up a new process for dealing with slow moving stocks; 2)Reforming the financial approval processes; 3)Fine-tuning the sales bonus system. All the detailed plans have been worked out by cross-departmental teams, and implemented after the review and approval of the Exec Committee. The organization (the company in China) has only 300 people in total, but now they have a senior OD Manager on board. And the result? The company has been established for 10 years in China when we started to work with them, and they have been quite successful already that time. Since then they were able to grow their revenue five fold, while increasing their margin. They were able to do that in a very tough external environment. And they did it with exactly the same headcount - they are still under 300 people just as seven years ago when we started working with them. Of course, many things supported such an excellent result: investment in facilities, IT, training, and changing some people at the very top.

Typical interventions

BPI, IT supported new processes, training, coaching, optimizing people - job fit, reorganizations... could be many things really.

What is good about OD? Why is it important?

OD is a method that:

  • Improves employee engagement. Employees gain more information about the organization and it's challenges. The relevant employees participate in the design of the change, therefore they understand it better and support it more.
  • Creates effective change. The diagnosis reveals the root causes, and the "systemic" or "holistic" approach, the simultaneous changes in people (attitudes/knowledge/skills/behavior) and in relevant work processes and structures make the change happen and stick.
  • Enhances teamwork and collaboration. The change is typically designed and implemented by cross-functional teams, and it breaks down the barriers of cooperation.
  • Enhances individual learning, growth and self esteem. As people are tackling in teams the toughest challenges that the organization is facing, they practice new skills, they can realize more of their potential, and they become more proud of their work.
  • Improves the vitality of the organization: it's ability to solve problems and react to changes better; it's ability to serve customers better and create more value. It keeps the organization agile and intelligent. Both the organization and the employees can fulfill more of their potential.

Conditions. What is needed to make OD t work?

The following criteria decide whether OD is suitable for you.

1. Top management support. OD requires the support of the number one decision maker, and it typically involves the entire senior management team.

2. Having an OD Practitioner. Someone who understands the OD process, and can guide it to success. Someone who has the needed OD tools and methods. The OD Practitioner can be an employee or an external consultant, what matters that she has to be trusted and respected by the senior managers in the organization, and she needs to be able to influence senior managers effectively.

3. Humanistic values of the organization. The organization's leaders need to believe in and support a culture of "employee engagement". The participatory processes don't work well in an atmosphere of fear. OD doesn't work in companies where employees are considered as resources to exploit, potential trouble-sources who are better to be "kept in the dark".

Isn't it the same as Kaizen or TQM?

The philosophy is very similar, and there are great overlaps between these approaches. However there are slight differences in the emphasize and the tools. Kaizen and TQM focus more on the technical side of the processes, OD has more focus on the people skills. OD tools include employee surveys, team scan, psycho-metrics, 360. Beside process changes, OD interventions often include learning activities: training, coaching, action learning, future-shaping workshops, "open space" events.

Sounds good - how to start?

The good thing about OD is that you can start with small steps. Select an OD practitioner and order a diagnosis with suggestions, and take it from there...

Enjoy the journey!

Written by: Gabor Nagy