What is Organizational Development? A Complete Guide

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7 min
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Aug 2, 2024

Organizational development aims to make a company more competitive by creating unique strengths. These can be people, new products, top-notch service, or a special culture. It's different from random changes because it focuses on making the company better over time.

In today's fast-changing world, being able to adapt is vital. That's why organizational development is more important than ever. It helps companies stay flexible and keep up with changes.

Key Takeaways:

  • Organizational development is a science-based process that helps organizations build their capacity to change and achieve greater effectiveness.
  • It focuses on developing unique resources and competencies, such as people, innovative products, superior service, or culture.
  • Organizational development differs from incidental change processes by focusing on building the organization's ability to assess its current functioning and make continuous improvements.
  • In today's VUCA world, organizational development is crucial for organizations to adapt and remain agile.
  • Organizational development interventions include Human Process, Technostructural, Strategic Change, and Human Resource Management.

What is organizational development? A definition

Organizational development (OD) is a key process that helps organizations change and work better. It uses science to improve strategies, structures, and processes. This approach helps organizations adapt and succeed in a changing business world.

OD looks at the whole organization, not just parts of it. It can focus on the whole company, certain locations, or even a single department. By looking at all parts, OD works to make lasting changes that improve how well an organization performs.

Organizational development is a critical and science-based process that helps organizations build their capacity to change and achieve greater effectiveness by developing, improving, and reinforcing strategies, structures, and processes.

Key parts of OD include:

  • Evidence-based and structured process
  • Building capacity to change and achieve greater effectiveness
  • Focusing on developing, improving, and reinforcing strategies, structures, and processes

In today's fast-changing world, designing organizations is more important than ever. With global connections, companies face both big chances and challenges. Companies like Facebook and Snapchat have grown fast by using technology, showing how important being quick to adapt is.

Company

Milestone

Time to Achieve

Facebook

1 million registered users

1 year

Snapchat

10 million active users

1 year

OD helps organizations stay ahead by making them unique and adaptable. It keeps checking and adjusting strategies and processes. This way, OD helps companies meet new market needs and reach their goals, like making more money, having certain values, or being more flexible.

The goals of organizational development

The main aim of organizational development is to make an organization work better and perform well. Companies have different goals, but they usually focus on making more money, pleasing customers, keeping employees happy, and adapting to change.

One big goal is to make the organization more competitive. This means finding what makes it stand out and working on areas like better communication and employee growth. By doing this, companies can improve their chances of winning in the market.

Another important goal is to create a culture that always looks for ways to get better. This means being ready to change and improve regularly. In today's fast-changing world, being able to adapt is key to success.

Organizational Development Goal

Description

Improve financial performance

Optimize processes, communication, and employee engagement to boost profitability and financial stability.

Enhance customer satisfaction

Develop strategies to better understand and meet customer needs, leading to increased loyalty and positive word-of-mouth.

Increase employee engagement

Foster a supportive work environment that encourages employee participation, motivation, and alignment with the organization's vision.

Strengthen adaptability and renewal

Build the organization's capacity to effectively respond to and navigate change, ensuring long-term success and relevance.

Build the organization's capacity to effectively respond to and navigate change, ensuring long-term success and relevance.

Every organization has its own specific needs and goals for development. By focusing on these key areas and always looking to improve, companies can grow and succeed over time. This approach helps them stay ahead in a world that's always changing.

Examples of OD interventions

Organizational development interventions aim to boost an organization's effectiveness and performance. Cummings and Worley (2009) list five main types: diagnostic, human process, technostructural, human resource management, and strategic change interventions. Each type is vital for improving different aspects of an organization.

Human Process Interventions

Human process interventions focus on improving how people work together. They cover individual, group, and team dynamics. These efforts aim to make the organization run smoother.

Coaching and mentoring help employees improve their communication and behavior. This boosts their job satisfaction and performance. Team building activities enhance group dynamics, leading to better task completion and problem-solving.

Third-party interventions use an outside expert to solve conflicts between people or groups. Organizational meetings bring everyone together to tackle big issues. These interventions focus on improving how the organization works, not just individual skills.

Technostructural Interventions

Technostructural interventions aim to enhance the organization's technology and structure. They're crucial in today's fast-paced markets. Examples include organizational design and total quality management.

Organizational design shapes the company's structure, like its hierarchy or customer focus. Total quality management focuses on making everything about quality. It's a long-term effort to improve all aspects of the organization.

Work design and job enrichment make jobs more interesting and fulfilling. They consider factors like skill variety and autonomy. These interventions improve the work environment.

Human Resource Management Interventions

HRM interventions focus on managing people within the organization. They're often handled by the HR department. These include performance management and talent development.

Performance management uses goal setting and appraisals to improve work. Talent development includes coaching and career planning. Diversity interventions increase diversity, which fosters innovation.

Walmart's Live Better U program is an example of HRM intervention. It pays for college tuition for employees. This shows how companies invest in their workers through OD interventions.

Strategic Change Interventions

Strategic change interventions aim to give organizations a competitive edge. They're key when companies change their products or merge with others. These interventions help adapt to new consumer demands.

Transformational change deeply changes an organization. Strategic planning sets long-term goals and action plans. Both are vital for OD success.

A McKinsey survey found that more steps lead to better OD success. This shows the importance of a thorough approach to OD, involving many departments and leaders for lasting change.

How Human Resources and OD relate

Human resources and organizational development work together to make an organization better. They focus on the people who make the organization work. HR deals with things like hiring, pay, and benefits for employees. OD looks at how the whole organization works to match its goals and values.

The difference between HR and OD is in what they do and how they do it. But both aim to make employees work better and help the organization succeed.

HR helps OD by bringing in great people, making the workplace welcoming for everyone, and offering chances for learning. HR makes sure the organization has the right people with the right skills. They also make sure everyone knows what they need to do to help the company succeed.

OD looks at different parts of the organization to bring about big changes:

  • Human Process Interventions work on improving how people talk, work together, and solve problems.
  • Technostructural Interventions make the organization run better by improving its structure, processes, and technology.
  • Human Resource Management Interventions focus on managing talent, keeping employees happy, and rewarding them.
  • Strategic Change Interventions make big changes in what the organization does, its model, or its culture.

"HR and OD professionals must work hand in hand to create a seamless employee experience that supports both individual growth and organizational transformation." - Jane Smith, CHRO at ABC Corporation

Working together, HR and OD can help employees grow and the business to thrive. HR knows a lot about managing people, and OD knows about making systems work better. When they work together, they can tackle big challenges and find new chances for growth. Combining HR and OD is key to making organizations strong, flexible, and successful in today's fast-changing world.

The organizational development process

The organizational development process helps improve an organization's effectiveness and efficiency. It includes steps to find areas to get better, create and put into action specific changes, and check how well they work. By using a structured organizational development cycle, companies can get better at what they do and keep up with changes in the business world.

1. Entering and contracting

The first step is to enter and contract. Here, the OD practitioner and the client organization work together. They make sure everyone knows what to expect, who does what, and what goals to aim for with the OD project.

2. Diagnostics

This phase is key to understanding the organization's current state. The OD practitioner uses surveys, interviews, and focus groups to collect data. This helps spot strengths, weaknesses, chances, and threats. It shows where the organization needs to get better.

3. Data collection and analyzing

After the diagnostic phase, the OD practitioner looks at the data to understand the organization better. Tools and techniques are used to make sense of the data. This helps in making plans for specific changes.

4. Feedback

Feedback is crucial in the organizational development process. The OD practitioner shares the findings with important people, starting discussions and helping everyone understand the results. This teamwork helps agree on what changes are needed and makes sure everyone knows what the organization needs to do better.

5. Designing interventions

With the help of feedback and data, the OD practitioner plans specific changes to improve the organization. These changes can be training, team activities, making processes better, or changing the structure. The choice depends on the organization's goals, what it can do, and its culture.

Intervention Type

Examples

Human Process Interventions

Team building, conflict resolution, leadership development

Technostructural Interventions

Job redesign, process improvement, organizational restructuring

Human Resource Management Interventions

Performance management, diversity and inclusion initiatives, employee wellness programs

Strategic Change Interventions

Culture change, strategic planning, mergers and acquisitions

6. Leading and managing change

Putting organizational development changes into action needs good change management. The OD practitioner leads and manages the change, making sure everyone is involved and supported. This means clear communication, dealing with resistance, and giving the right resources and training for new ways of working.

7. Evaluation and institutionalization of change

The last step is to check how well the changes are working and make them a part of the organization. The OD practitioner looks at how the changes affect important areas and gets feedback from employees and stakeholders. If needed, changes are made to keep the improvements going. The goal is to make the new ways of working a normal part of the organization.

By following these steps in organizational development, companies can keep getting better, adapt to new market conditions, and make work more engaging and productive for their employees.

Conclusion

Organizational development is key for businesses to stay ahead and adapt to market changes. It focuses on improving strategies, structures, and processes. This helps organizations change better and work more effectively. The benefits include more profits, a bigger market share, happier employees, and being more agile. These lead to the company's success and lasting growth.

OD uses various methods to tackle different challenges and chances in an organization. It focuses on helping employees grow through better communication and skills programs. It also boosts innovation, making products and services better.

The OD process is complex and takes time but is vital for positive change. It helps the organization grow and succeed in today's fast-changing business world. Using models like the action research model helps organizations go through OD smoothly. This model has six steps: problem diagnosis, feedback, planning, doing the work, checking results, and success.

OD is a strong tool for businesses to keep improving, innovate, and stay competitive. By investing in OD and following key principles, organizations can reach their full potential. This leads to lasting success.

FAQ

What is organizational development?

Organizational development (OD) is a process that helps organizations change and work better. It uses science to improve strategies, structures, and processes.

What are the key elements of organizational development?

OD has key elements like being based on evidence and being structured. It aims to build the ability to change and work better. It focuses on improving strategies, structures, and processes.

What are the goals of organizational development?

OD goals include better financial performance and making customers happy. It also aims for more engaged employees and the ability to change and renew. The main goal is to make the organization more competitive by building unique strengths.

What are human process interventions in OD?

Human process interventions focus on how people work together in groups and within the organization. They include many types like team building and improving how groups interact.

What are technostructural interventions in OD?

Technostructural interventions focus on the organization's technology and structure. They aim to improve how the organization is designed and how work is done.

How do human resources and organizational development relate?

Both OD and human resource management focus on people. OD looks at changing the organization as a whole, while HRM focuses on improving the work experience for employees. This helps the organization and its employees.

What are the steps in the organizational development process?

The OD process has steps like entering and contracting, and analyzing data. It also includes designing interventions, leading change, and evaluating the results. These steps help make sure the change sticks.

Why is organizational development important?

OD is key for businesses to stay competitive and adapt to market changes. It helps improve strategies, structures, and processes. This makes organizations more effective and successful over time.

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Engaging Generation Z in the Workplace: Strategies for Effective Internal Communication and Collaboration

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5 min
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June 27, 2024
As Generation Z enters the workforce, organizations must adapt their communication strategies to effectively engage and retain this unique demographic. Born between the mid-1990s and early 2010s, Gen Z is set to outnumber Millennials worldwide, making up 27% of the job market by 2025. Inna Kutsak, Senior Communications Manager at RISK, shares her insights on the secrets to successful communication with Gen Z employees.
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4 Types of Key Performance Metrics To Track

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10 min
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June 24, 2024
Did you know that comparing profitability metrics can help find key business changes? Looking at numbers, from how productive we are to what we sell, helps a lot. This way, we know where to aim for and what to change to get there.Measuring performance metrics is important for a few reasons. It helps us see our growth. It also lets us compare where we are now to where we want to be. And, it guides us in making smart moves to reach our goals. Understanding key performance metrics is key for any business's success. For example, knowing how productive we are and our profit margin is crucial. It helps businesses thrive and hit their strategic targets.
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The Best-Kept HR Secrets for Creating a 'Wow-Atmosphere' in the Digital Workplace

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6 min
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June 21, 2024
Insights from Yuliya Kushnir, RISK HR Project Manager, on Fostering Connection and Collaboration in the Digital Workplace In the ever-evolving landscape of modern work, where remote teams and digital communication are the norm, the role of HR professionals has never been more crucial. How do you build a company culture that thrives when employees are scattered across time zones and screens? How do you ensure that everyone feels connected, valued, and motivated?
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Employee Life Cycle: The Ultimate Guide

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8 min
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June 20, 2024
Did you know that most job seekers are attracted to organizations that look after their brand? The employee life cycle is key. It's about the whole journey between an employee and their workplace. This journey starts from hiring and lasts till they depart. Knowing about the employee life cycle helps a lot. It lets you connect with people at every step. This, in turn, helps you find the right talent, make employees happier, and boost your company's success. We are going to dig deep into each of the seven stages. And we'll share tips to make each stage the best it can be for your employees and your company.
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10 Essential Project Management Skills to Succeed

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6 min
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June 14, 2024
By 2026, the market for project management software is set to hit $17.5 billion. It will grow at a rate of 12% annually from 2021. This shows there's a big need for project managers who know their stuff. To turn your natural skills into a successful project management career, you need to work on 10 key skills.
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eNPS as a Key Element in Building Two-way Communication and Employee Loyalty

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5 min
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June 12, 2024
At RISK, a mantra echoes through our halls (well, virtual halls, as many of us work remotely): "People are our key value." It's not just a catchy slogan. It's the beating heart of our company culture, the guiding principle behind every decision we make. And that's why employee loyalty research, also known as eNPS, isn't just a box-ticking exercise for us – it's a window into the soul of RISK.
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The 10 Essential HR Metrics You Absolutely Need to Watch

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10 min
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June 6, 2024
Are your HR metrics helping lead your company to victory? In today's fast changing world, making choices based on data is key. This is especially true for businesses that want to keep and grow their top talent. So, what HR metrics are essential for getting useful info and boosting sustainable growth?
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Keeping Pace on the iGaming Track: Insights from Kazakhstan

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6 min
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June 6, 2024
In the rapidly evolving world of iGaming, staying ahead of the curve is crucial for success. At RISK, we pride ourselves on our ability to adapt to changing market conditions and capitalize on emerging opportunities. To gain a deeper understanding of the current state of the industry and our plans for the future, we sat down with Yuriy Kralyuk, theHead of Kazakhstan Region @RISK. In this candid conversation, Yuriy shared his insights on the trends shaping the iGaming market and how RISK is positioning itself for growth in 2024 and beyond.
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From Support to CRM Manager: The Inspiring Journey of Dmytro Tsapenko at RISK Company

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6 min.
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May 21, 2024
In the fast-paced world of the iGaming industry, where passion, vision, and strong values drive success, RISK Company shines as a beacon of excellence. At the core of RISK's remarkable story are our employees – the true heroes who continuously raise the bar, propel projects to new heights, and fearlessly embrace challenges. Today, we explore the inspiring journey of one such hero, Dmytro Tsapenko, whose unwavering dedication and passion have transformed his career and left an indelible mark on the company.
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Product Manager vs. Product Owner: Who's Who?

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12 min
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May 16, 2024
It’s very important to know the difference between a product owner and a product manager. This understanding helps teams meet their goals and make products customers love. Without clear roles, it's hard to get a project done well. Knowing what each role does makes teamwork better and tasks clearer.
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Navigating the Legal Landscape of AI-Generated Content in iGaming: Opportunities and Challenges

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8 min
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May 14, 2024
The rise of automated text creation presents significant opportunities for iGaming businesses to expand their reach and improve user engagement. By leveraging AI-powered tools, companies can generate vast amounts of content, such as game descriptions, promotional materials, and even personalized recommendations, in a fraction of the time it would take human writers. This efficiency enables iGaming platforms to cater to a wider audience and deliver tailored experiences that keep users coming back.
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The Metaverse: A Playground for the Future of Marketing

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10 min
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May 3, 2024
Imagine a world where you can step into a virtual store, design your perfect pair of custom sneakers with a virtual reality headset, and have them delivered to your doorstep – all without leaving your couch. Or, picture yourself attending a live soccer match with your friends from all over the globe, where you can cheer, communicate, and interact with the performers in a shared virtual space. That's the kind of future the metaverse promises, and it's fundamentally changing how businesses think about marketing.
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Mastering Expectation Management: Tips & Strategies

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10 min
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April 29, 2024
Expectation management is key for success. With these smart strategies and continuous updates, projects can stay on track. This creates a work culture filled with trust, teamwork, and always getting better.
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Unlocking Success in the iGaming World Essentials

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6 min
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April 29, 2024
In this article, we will delve into the essential insights that can navigate you for better understanding of the gambling world. We will explore the different factors that contribute to success in the gambling industry and provide expert guidance on how to navigate this competitive landscape.
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Boost Collaboration: 5 Tips to Improve Your Teamwork Efficiency

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5 min
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April 29, 2024
In the world of business, working well as a team is vital to success. Did you know effective teams are 5 times more likely to do well and meet their goals? By improving how we talk to each other and building a united team, companies can really boost their productivity.
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How Riskers elevate customer support and their careers

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4 min
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April 17, 2024
What comes to mind when you think of customer support? A corporate machine with constantly changing operators who read from scripts like robots. But if you look at the RISK support team, you’ll see the opposite picture: minimal turnover and support agents speaking in a simple language.
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The Riskers at Cannes Lions: How we back talents

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4 min
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March 20, 2024
Feeling like you’re stuck in the same old routine at work? Every specialist needs a breath of fresh air for inspiration now and then. Our team believes in the power of industry contests. This time, we’ll dive into Cannes Lions – the international festival of creative communications and advertising through the stories of our Riskers!
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The RISK Mindset: An Exclusive Interview with RISK CEO Max Potomkin

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5 minutes
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February 9, 2024
We're about to delve deep into the core of what drives the Riskers. Just as our team charts the course for the entire company, it's the backbone of our team that steers us through these waters. So, let's dive into a sneak peek of the wisdom shared by our captain, Max Potomkin, CEO of RISK.
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How to thrive on the edge

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5 minutes
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December 27, 2023
High-risk businesses demand more from their leaders.
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What kind of tribe is the Risk.Inc team?

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6 minutes
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December 26, 2023
People shape and move any company. What brings professionals from around the world together under one roof? Shared principles and values.
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