What is Organizational Development?

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Organizational development (OD) is a business field that specializes in the planning, implementing and evaluation of company-wide activities to increase efficiency and reach strategic goals. However, many business experts disagree about the technical definition of organization development. To illustrate, certain experts focus on change management, while others focus on technology implementation or business unit development.

Organizational Development Defined

According to the Organization Development Network, organization development is an executive driven, collective effort to increase the organization operational effectiveness through strategic processes and interventions. Organization development is influenced by industry research, behavioral-science knowledge and industrial organizational psychology. Thus, organizational development strives to use science to perfect human-, process- and technical-based work systems. Enterprise-wide alignment and improvement are achieved through enhancing individual, team and organizational development. Organization development leaders must have a firm grasp of diversity, coaching, team building and risk and performance management.

Organization Development Goals

Depending on the company’s industry, subculture and leadership, the organization development program may have different objectives. For example, companies that experience high turnover levels and low levels of employee engagement may focus on increasing trust, loyalty, satisfaction and commitment of employees. On the other hand, companies that experience sluggish and bureaucratic problem solving may concentrate on streamlining internal processes and teaching employees how to solve problems at the lowest possible levels.

Companies that are losing revenue or their market share may want to reevaluate and reinvent their subculture, mission and processes. Thus, they may use organization development to train management how to view employees not as functional resources, but human beings and business partners. Successful companies with content employees may simply want to create an exciting place to work and encourage their employees to reach their full potential. Successful companies experiencing major changes, such as a merger or acquisition, may simply want to incorporate new employees into their existing productive teams and cooperative departments.

What are the Benefits of Organization Development?

There are proven benefits to organization development. For instance, it ensures continuous improvement through creating a continuous cycle of process improvements that involve systematized planning, monitoring and evaluation. Next, organization development increases the effectiveness of internal feedback, interaction and communication. Thus, all employees will share collective goals and values. Candid communication will also drive change and employee development. This is because employees can only be developed through open communication in conjunction with appropriate responses to market and industry changes. As the organization enhances their employee’s skills, they will surpass the competition and be prepared to respond to future market changes.

In addition to this, organizational development will enhance innovation that will lead to better products and services. Innovation cannot be cultivated without embracing diversity, rewarding successes, encouraging experimentation and boosting morale and motivation. Consequently, this will increase employee engagement through creative product and service innovations that take advantage of research that analyzes market competitors and consumer preferences. Ultimately, organization development will increase revenue and cost savings through minimizing miscommunication, employee turnover and wasteful practices.

Organizational development is a highly advanced set of managerial concepts and techniques that can increase quality, efficiency and even safety. Implementing organization development may be hard at first because of resistance to change, but companies that embrace organizational development will experience a change in their company’s culture, productivity, inter-communication and revenue.

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