employee-drafting-organisational-structure
  • HR performance management

How organisational development can improve your company's productivity

Jazmin Lopez

In a 2019 Deloitte study, 86% of respondents said they need to change their learning abilities. 84% also said they must change the workforce experience to boost productivity.

Forbes also reported an increase in spending on leadership training. The market for training leaders and talents have grown into a $366 billion global sector.

All these changes and improvements are critical aspects of organisational development (OD).

Whilst OD has been around for decades (since the 1930s), it's still an abstract concept for many. However, it's an integral player in the productivity and effectiveness of an organisation. It allows companies to expand their capacity to change and achieve growth.

Organisational development does this through the application of behavioural science. It takes into account worker behaviours and motivation. These two, after all, are under the influence of organisational processes and structures.

OD can be quite complex, but it's important to learn how it works and how you can use it for your own firm. Just as crucial is to know how to implement it, so that you can make the most out of your OD strategies.

This post will dive deeper into the ins and outs of OD, so please be sure to read on.

What exactly is organisational development?

Organisational development is a practice that involves constant and systematic changes. It focuses on improving processes and activities within an organisation.

Behavioural science outlined the framework for the study and the implementation of OD. However, other fields, such as leadership development, are also influencing modern OD.

In any case, OD is a form of scientific study, inquiry, and applied science.

First, it looks into how an organisation, as a whole, operates, changes, and performs. It also factors in how a firm manages itself. Moreover, it delves deep into how each member of that "body" behaves.

OD then processes all these pieces of information to discover areas of improvement. From here, it provides a way for an organisation to change so that it can improve efficiency. It also uses strategic planning to introduce future changes without meeting resistance.

Another crucial goal of OD is to increase productivity, which can be measured using productivity measurement. It can do so by using the data gathered by, say the HR department, in terms of worker behaviours. Employees may reach out to HR to voice out their concerns, woes, and opinions.

Do note that OD is different from learning and development, though. The latter often places focus on individual workers and entire teams.

By contrast, OD is for the entire organisation, starting from the people, all the way to processes. Of course, it also concentrates on the overall culture of a company.

team-of-people-working-together

A quick history about OD

Kurt Lewin, a German-American psychologist, is behind the establishment of organisational development. Although he is the founding father of OD, he passed away before it became a common practice.

Still, it was Lewin who gave rise to the concept of group dynamics and action research. These two, in turn, are the two primary ideas that support the basic OD process and strategy structure.

OD Definitions Vary from One Organisation to Another

There is no one exact "definition" of OD, as its meaning varies from one business to another.

Let's use Germany's Federal Ministry for Economic Cooperation and Development as an example. Also known as the BMZ, one of its main goals is to develop and strengthen health systems. In this case, one of the purposes of OD is to invest in equipment for health facilities.

In the UK, one of the functions of OD in the National Health Service is for the system to become more sustainable. The healthcare system's plan of OD action, for instance, is to reduce its energy use by 30%.

For a small to mid-size business, implementing OD may be to manage remote teams better. Another purpose may be to figure out the whats and whys behind absenteeism. Or, it could also be to become a greener firm by going paperless through digital employee file.

Whatever the goals your business wants to achieve, there are traits akin to all OD strategies. These include the following:

  • Modify the strategies, structures, or processes of an organisation
  • Monitor the behaviours and performances of each department, team, or employee
  • Properly plan corporate changes in a flexible manner to raise its acceptability
  • Establish beneficial change as part of the company culture to reinforce change
  • Enhance the overall effectiveness, productivity, and profitability of the organisation

By keeping in mind these traits of OD, your organisation may be more welcoming to change. This means that the people who make up the company are less likely to resist changes to corporate rules. Instead of countering it, they are more likely to support and promote these changes.

company-team-meeting

Organisational development models

Each organisation will respond differently to various OD models. Meaning, one model may be successful in one firm, but not so much in another.

Still, models provide a basic framework for organisations to implement OD strategies. As such, OD practitioners need to track the results of their efforts. It's not advisable to follow a model for only a short time and switch if it doesn't yield results right away.

On that note, here are three of the tried and tested models that your own firm may start with.

Lewin's Model

This model is from none other than OD's founding father. The idea is that, for one to enact change, one must prepare for and have the motivation to change too. It's a three-step model, which include "unfreezing," "changing," and "refreezing."

Unfreezing

This involves unlearning old behaviours for one to implement change. In this stage, it's vital to make people aware of how the current state of the organisation is a hindrance.

Therefore, outdated processes, structures, and ways of thinking must change. Only then can an organisation become more effective and competitive.

Proper communication is especially crucial here. That's because employees need to understand why exactly there's a need for a change. If they get more familiar with the logic, then they're more likely to accept the change.

Changing

After unlearning old behaviours, people are more likely to become receptive to change. "Removing" unhelpful practices, for instance, makes way for more beneficial ones. As such, this is the stage wherein the actual change begins.

Refreezing

The newly learned attitudes, behaviours, and processes become the "new" status quo. In essence, this stage "freezes" the change that has just occurred. From here, the management's role is to stabilise and reinforce the new processes.

Larry Greiner's Model

External forces and pressures stimulate the changes that occur within the managerial level. This, in turn, triggers management to implement change within an organisation.

From here, the pressure reaches the top-level management. They, in turn, would run an analysis and diagnosis of what's wrong within the firm.

Just like a "medical condition," the diagnosis plays an essential role in the "treatment." In an organisation, this means addressing the disease by curating a solution. Once the solution is available, it then gets enacted and further reinforced.

Leavitt's Model

Also known as Leavitt's Diamond, this OD model is a four-sided system. These four sides include the structure, people, technology, and tasks. As a "diamond," all four sides connect to, interact with, and affect each other.

Therefore, enacting change would mean putting pressure on one side of the diamond. From there, the effect will spread to the other sides connected to it.

OD for Small Businesses

SMBS might find it challenging to implement OD, seeing as they work on many other activities. So much so that previous estimates put the cost of admin tasks at US$5 trillion (£3.75 trillion) a year. Still, with OD being critical for business growth, it's a good idea to implement it ASAP.

You can start by asking the following questions:

  • Where exactly is your business now?
  • Which direction do you want your business to take?
  • How soon do you think your business can reach that "destination?"
  • Do you have any strategic plan to take your business there?
  • Do you measure the progress of your organisation?

Once you've answered these questions, you can start mapping out your OD plan. Don't forget to include the "changes" that you need to enact for your business to achieve your goals.

The role that HR plays in organisational development

With the use of HR software, such as employee directory, HR can gather heaps of data. Such programs make it easier to analyse data, which the human resource experts can then use for OD. Since HR software is automatable, the HR folks can focus on drawing in data that can kickstart OD.

For example, time and attendance software can quickly collect the attendance rate for a particular week. From here, it'll be easy for them to see how high (or low) the absenteeism rate is. By having this knowledge, they'll know if attendance is an issue that OD needs to address.

Another example is for HR to monitor functions like the onboarding process. They can launch assessments about the current practices to learn if they work or not. New hires, in turn, can voice out their opinions through such reviews.

The most important thing is for HR not only to launch a change but also to learn from it. This new knowledge, in turn, should then become a part of ongoing development. It's only when these "modifications" bring about positive changes can they truly be OD.

hr-hires-new-employee-handshake

Focus on organisational development by investing in the right HR Software

Organisational development will no doubt take a lot of effort to implement. In addition, it will raise the workload of your HR department. However, it's a crucial strategy that you need to enforce now, as it is key to the success of your business.

HR software will allow you to save time on human resources tasks so you can focus on more strategic tasks, such as OD. It also gives you insights on time spent on activities. Moreover, it gives you access to trends in workplace culture, such as absenteeism.

So, take action now so you can enhance corporate culture and processes. Let kiwiHR provide you with solutions to build a more effective organisation.

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