What Is Organizational Development?

By Kristin Kizer
Dec. 4, 2022
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What is organizational development, or OD? why is a company using it, and how does it affect the people who work or function within the organization? These are common questions when people hear that organizational development is going to occur.

The two words sound familiar, and you can glean what they mean independently, but when they’re put together, it’s a bit more complicated and involved.

Key Takeaways:

  • Organizational development is a science-based process of change within an organization to improve its effectiveness.

  • “Effectiveness” depends on the goals of the organization. Some examples include increased profit, higher customer satisfaction, or greater brand awareness.

  • The human component of organizational development is just as important. It can include increased interpersonal trust or cooperation among members.

  • Organization development is a 7-stage process: Development, diagnostics, data collection, feedback, interventions, changes implemented, and evaluation.

What Is Organizational Development?

What Is Organizational Development?

Organizational development is a science-based process that helps facilitate change within an organization, with the goal of improving effectiveness. This can happen by improving and reinforcing strategies, structures, and processes.

One very key concept to grasp is that organizational development is science-based. It does not involve a let-see approach. Instead of trying something out and then waiting to see what the results are, Organizational Development looks at science and already determined results to create their process and design their structure.

Even though this is a more thought-out and predictable approach to change within an organization, there is still the chance that it will not create the desired outcome. There still needs to be work done throughout the process to make sure that things are progressing as expected.

Why use Organizational Development

The primary goal of organizational development is to increase effectiveness. This can mean different things for different organizations. Obviously, a philanthropical non-profit is going to have different goals than a for-profit business, the main one being profit.

But there are some common goals that you’ll find in many different organizations, and sometimes an OD is designed with several of these goals in mind.

  • Profit

  • Customer satisfaction

  • Member/employee engagement

  • Competitive advantages

  • Recognition/brand awareness

  • Internal/External stakeholder satisfaction

  • Flexible adaptation

  • Individual contributions

Organizational Development for Competition and Adaptation

Because the goals of different organizations can vary so dramatically, it’s hard to classify exactly when OD is used, but there is an overarching theme, and it centers around an organization maintaining its competitiveness in the market and adaptability.

Most organizations ultimately have success as their underlying goal. They can define success through different metrics such as profits or lives saved, but it’s really about succeeding.

To succeed, an organization needs to be able to compete with other organizations. They don’t need to throttle the competition and make them obsolete, but they need to maintain their importance in the market and in the minds of their ultimate end-user or consumer.

Beyond being competitive but also as a key part of it, an organization needs to adapt. The market for anything and everything is volatile, and it’s constantly changing.

Even things that seem relatively constant tend to have an element of change, whether it’s simply in personnel or the end user’s motivation. Being able to adapt to internal and external change is also a critical component of success.

Organizational Development and the Human Component

OD is a part of behavioral science, but it branches out from there and pays particular attention to sociology and psychology as it relates to humans and as it relates to industry and organizations. This means there is more to it than just creating an efficient organization. The human component of an OD often includes the following:

  • Increase interpersonal trust among members

  • Increase satisfaction and commitment

  • Manage conflict and effectively confront problems

  • Increase cooperation and collaboration

  • Develop an effective organizational problem-solving process

  • Process of continuous improvement

The core values and goals behind OD are more than organizational success; they’re humanistic success also. The most effective outcomes regard the individual within the organization as a human being and take their individual value into consideration.

They also allow individuals to have a hand in the processes established, both in change and in the success of the organization.

Organizational Development vs. Human Resource Management

Although both are based in business strategy, organizational development is significantly different from human resource management due to its scope.

Organizational development aims to improve the entire makeup of an organization, from its overall performance to specific systems and individuals. Human resource management, on the other hand, focuses solely on the relationship between the employees and the company.

This means that human resource management can play a part of organizational development, and vice versa, however neither necessarily relies on the other.

An Organizational Development Process

As mentioned, this is a science-based, outcome-driven process. It’s not about trying something and then deciding if it worked or not. There are many steps involved because the organization wants to approach the development they are considering with as much information on their side to create a certain degree of confidence.

There is an order that is typically followed in an OD situation that lets the people in charge effectively evaluate the steps that are being taken. These orders are listed below:

  1. Development. Entering the development stage, preparations are made to use organizational development.

  2. Diagnostics. Diagnostics are established to determine and monitor issues that need to be addressed.

  3. Data collection. Data is collected from the diagnostics and evaluated to be used for solutions.

  4. Feedback. Feedback is generated to suggest solutions.

  5. Interventions. Interventions are designed to make the most of the data and feedback to improve organizational effectiveness.

  6. Change. Change is managed and led based on feedback and suggested interventions.

  7. Evaluation. Change is again evaluated and officially implemented if positive.

While these are listed as steps, they’re actually part of a continuous circle. It’s never-ending and continues to force an organization to develop and adapt.

Organizational Development Interventions

You may have noticed that interventions are a key part of the OD process. They’re listed as number five above. An intervention is a term used in OD to describe the action stage.

Interventions are a series of steps or structured activities used to effect change or adapt. The goal is to improve the task or performance so the intervention can be thought of as the action step in an improvement process.

Interventions can be created to improve the effectiveness of individuals, or they can be used to benefit a large group of people or the total organization as a whole. Let’s look at some possible scenarios where OD would be useful.

When to Use Organizational Development

OD sounds like a great way to keep your company on track with the least amount of exposure and risk, but when do you use it?

  • Individual interventions. If you immediately think of a drug or alcohol intervention, shake that idea out of your head. In an OD, individual intervention is not meant to put someone in the spotlight or call them out on bad behavior. It’s typically designed to improve communications.

    While this might be geared at an employee who perhaps has poor communication skills, it could also hypothetically be used to help include a new division manager or employee in the regular communication cycle.

  • Group interventions. Again, this is designed to improve some aspect of that group’s performance or the way it relates to other groups. If one group in an organization works independently and doesn’t communicate with others, that can cause a lot of issues with missed elements or repetitive actions.

    This would be a key situation where a group intervention would be established, and it would provide a pathway for tracking progress or communicating.

  • Intergroup relations interventions. This is similar to the example used above, but in the previous example, it was about making one group more transparent or communicative to others. In this situation, it’s about what’s happening within the group.

    Maybe everyone is doing their part individually but not sharing the information with the group, or it could be one individual who is causing issues.

  • Organizational confrontation intervention. Confrontation meetings are held to identify problems in the organization, find potential solutions, discuss the goal of addressing the problem and then create an intervention that deals with the problem.

    Try not to think of a confrontation as another word for a disagreement or an argument. Instead, consider a confrontation in this context as identifying and dealing with a situation – confronting it.

  • Diversity interventions. Many companies want to address issues of diversity in the workplace, more specifically, a lack of diversity. Interventions like these are designed to look at the age, gender, race, sexual orientation, culture, disabilities, and other distinguishing characteristics of individuals.

    Then a process is put in place to either support the diversities that exist within an organization or to bring more diversity into the organization.

  • Wellness interventions. Physical, emotional, and mental wellness can all be a part of a wellness intervention. There are many different interventions for wellness, and these are probably the most easily identified aspects of an OD.

    A company that puts in a gym is clearly looking to provide its employees with a place where they can work to improve their physical health and perhaps relieve some tension as well. There are several different approaches or interventions that can be used to boost the wellness of the individual within an organization.

Professional Organizational Development

Organizational development is often led by a skilled professional who has a certification in OD, and they are called OD Consultants. Their backgrounds often include training in human behavior and development, human resources, and business management. They typically have a bachelor’s degree before they earn their OD certification.

OD experts often work closely with human resource departments and can even be a division of that part of an organization, but they’re not the same thing.

They may be brought into a company to focus on profits, in which case their dealings with individuals and their roles may be limited.

On the other hand, an OD expert could be coming in to improve employee retention and engagement. This would necessitate a close relationship with the human resources team and a vital flow of information between the two.

Final Thoughts

In the end, the goal of an organization using an OD model is to succeed. The level of success and the definition of success can vary greatly, but the OD approach guarantees that the changes made will be done in a scientific way with a focus on a results-based approach.

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Kristin Kizer

Kristin Kizer is an award-winning writer, television and documentary producer, and content specialist who has worked on a wide variety of written, broadcast, and electronic publications. A former writer/producer for The Discovery Channel, she is now a freelance writer and delighted to be sharing her talents and time with the wonderful Zippia audience.

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Topics: Glossary