Adapting to the ever-changing world of business should come at the top of any company’s list of priorities. From the changing needs of customers, to the uncertainties that come with operating in a global market, it’s rarely plain sailing when you’re trying to keep a business afloat.
In order to keep up, businesses should focus on investing in organizational development, considering it a key feature of their ongoing strategy.
In this article, we’ll be discussing what organizational development is, why it’s so important, and how companies can succeed in their journey to improve operations in this area.
What is organizational development?
Organizational development involves incorporating a strategic approach to driving your business forward. It’s a holistic approach that encompasses many different aspects of an organization, including culture, values, relationships and departmental capabilities.
The underlying idea of this approach is that it takes much more than a great product or service to secure loyal customers and a business with built-in longevity. You need to make sure that you have the right systems, people and internal skills that will help you get to where you want to be.
As such, organizational development has become one of the most critical parts of operations and is essential for any business owner who wants to keep their company agile and profitable over the long term.
Some of the fundamental principles that underpin the ideas of organizational development include:
- Aligning activities to your organization’s strategy, goals and core purpose. All development activities should be focused, and not undertaken without good reason. If changes are to be introduced, they should be well thought through and make sense in terms of the business’s current operations.
- Using behavioral science to back up development. Successful leadership, group dynamics and work design help bring out the best in your employees and empower them to do their best for the company.
- Focusing on maximizing the value of your resources. Every business has a different amount of resources available to them, and these should be utilized effectively to obtain their optimal value.
- Adopting a culture of continuous improvement. When implemented correctly, organizational development should be an ongoing, cyclical journey. This is due to the fact that the world of business is constantly changing, and as such there is no fixed endpoint at which the development of an organization is complete.
Stages of the organizational development process that every company needs to follow
If your business is trying to succeed in organizational development, the key lies in implementing the right measures and practices that aid your team on their journey.
Without the right stages and practices, it is impossible to level up your team and keep your business moving forward.
You can also use analytics and ongoing management as the fuel that drives your business. For example, looking back at an annual staff survey to highlight opportunities for growth, or simply meeting with your employees to see what needs to be changed.
To succeed in strategic organizational development, you can implement some of the following stages:
As with any good strategy, you should start with a thorough review of how things currently are in your business.
During this stage, you can begin to identify opportunities for growth, things that need to change and potential processes that could be holding you back.
Your approaches may involve using a number of practices, including: SWOT, PESTLE, quantitative performance targets, future state analysis and strategic reviews.
Identify existing practices to meet organizational needs
Some of the needs that you identified in the early organizational review may already be getting met, to some extent, by existing business operations.
However, this stage of the process acts as a gap analysis, allowing you to identify what you need to do to improve your current practices and therefore your business.
This should be an ongoing practice that you come back to again and again to see how your evolving business is meeting the changing needs of stakeholders and customers.
You can conduct this type of gap analysis using the following tools:
- Lean/Six Sigma
- Total Quality Management (TQM)
- Force Field Analysis
- McKinsey’s 7S Model
- 5 Star Model
Design or buy the intervention
Once you’ve identified what needs to be done to take your business and team from point A to point B, you need to start putting in place specific actions.
When it comes to these actions, you have two choices: design the intervention in house, or buy it in. Some of the actions you’ll be able to complete using your in-house knowledge and capabilities, but it’s also normal to need to outsource assistance during this time.
Interventions can come in many forms. Some target people and employee progression, while others address specific processes within your business that require change.
The actions you need to take could include coaching employees, business re-engineering, human resource intervention, or cultural change and transformation programs.
Implementation of your initiatives
With so much planning involved, some businesses may forget the importance of the correct implementation of initiatives.
This is the make-or-break point where it really pays to take your time carrying out a successful implementation if you want an initiative to have longevity.
When you’ve made a big change in your business, it’s important to have good change management processes in place to ensure smooth implementation.
For example, you need to make sure communication regarding the changes is transparent, involving stakeholders if necessary. It is also key to have a range of evaluation metrics in place so you can measure how much of an impact the changes have had on your business.
Learn more about organizational development from the experts
At EU Business School, we equip our students with the knowledge and skills that they need to have successful careers in the future.
Our courses are designed to cover various real-world topics, including organizational development, find out more about them today.