An updated definition of organizational development

IN TODAY’S highly turbulent world, the new rule is that there are no permanent rules.  The 21st century world is volatile, unpredictable and ambiguous. In such an environment, adaptability, creativity and speed are the pathways to survival and success.  Organizations,  therefore need to be constantly self-transforming, even to the extent of creating new rules for effectiveness and success.

Predicting the future has become irrelevant in a rapidly-changing and chaotic environment,   Instead, pre-paring the organization to be able to adapt & respond to unpredictable and random events is the key to survival and sustainable growth.  Preparing the organization for an uncertain future entails making decisions today for consequences of unforeseeable events. This is especially true for successful business enterprises which are most imperiled by the complacency & arrogance which success often breeds. Rapid growth also brings special dangers, one of which is getting blinded by the obsession of more growth. This over-focus on growth, as exemplified in the Toyota fiasco a couple of years ago, can bring about disastrous results.  In the case of Toyota, the obsession  of becoming the biggest car manufacturer in the world has blinded its management  from paying attention to its customers, its processes and its quality philosophy.  In other words, its internal capabilities fell short of supporting its ambitious goals.

Organization Development (OD) is a philosophy and the strategy of harnessing organizational purpose, processes and people to develop the   internal capabilities required to sustain the value creation processes of the enterprise amidst the realities of constant changes.

This view of OD, has been initially advocated by Richard Beckhard, considered a founding guru of the OD discipline.  He defines OD as planned organization-wide & top managed effort to increase organization effectiveness & health through planned interventions in the organization’s processes, using behavioral science knowledge (Strategies and Models, 1969).

The purpose of this overview is to update Beckhard’s definition and present OD as a strategic approach to dealing with organizational effectiveness in today’s “flat and fast-laned world.

Where is OD today?

Organization development as a practice has been successful as evidenced by the widespread adoption of its values, principles and interventions. In fact, today, many OD practices are considered part of mainstream management practice.  Take for instance, employee opinion and engagement surveys which came out of early OD innovations on feedback and problem solving, or team-building as ways to improve decision making and group cohesion or leadership development and coaching.  Change Management, one of the early domains of classical OD, has been co-opted by large consulting firms, often without the traditional OD focus on participation and capacity building. In their world, traditional management consultancy firms have dressed up project management and labeled it as change management and OD.  Many HR practitioners have also used OD tools as valuable adds to their toolkits and in the process, have positioned OD as a set of tactical interventions for organizational improvement.  Consider the following definition of OD:  “OD, or if you prefer, organizational improvement, is a planned effort to help people work and live together more effectively and productively in their organization” (Hanson & Lubin, 2000)

While these foregoing developments can be considered as part of the OD success story, they may detract from the potential power of OD as a philosophy & strategic approach to overall business success.

The content of OD interventions have shifted through the years, from a small group effectiveness focus to organizational effectiveness and today towards aligning organizational capabilities with business goals andstrategies. Amidst all of these intervention shifts, what has remained constant  in the  OD practice are the underlying values which triggered the birth of OD. These core values have remained constant and represent the hallmarks of real OD work.  These values include belief in the dignity and potential of the individual, the value of participation and involvement in making effective decisions, the power of small group effectiveness and the improvement of social processes of human interactions, leadership & team behaviors.

Dr. Michael Beer, Harvard professor and author (High Commitment, High Performance, 2009) cites the following basic assumptions as underlying effective OD work: 1. Employee commitment is seen as the primary means for meeting customer needs and sustaining their loyalty; 2. The importance of mutual trust and influence between management and employees; 3. Attention to providing value to multiple stakeholders such as customers, employees, the community and investors; 4. A systems perspective of organizations: an acknowledgment  that organizations are complex, multidimensional and organic; 5. Recognition that the development of organizational capabilities and culture is a key function of top management; 6. The costs of developing people and organizational capabilities is seen as an investment rather an a budgeted expense, and; 7. Leaders need to manage with their heads & heart.
These foregoing values & basic assumptions have remained constant through the years and in fact, differentiate & distinguish OD work from the change management techniques favored by big consulting firms.

On the other hand, interventions, as earlier stated,  have been changing through the years and reflect the growth and maturing nature of the OD discipline.  A cursory review of the top ten OD topics, drawn from contents of the OD Practitioner ( the quarterly publication of the US-based OD Network) from 2004-2013 reveal the following: Transformation and change;  Coaching;  Consulting practice;  Diversity and inclusion;  Appreciative Inquiry;  Strategic management; Balanced scorecard approach; Teams;  Complexity theory; Dialogic and large group interventions such as World Café by Juanita Brown and Open Space by Harrison Owen and; Leadership development

An Updated Definition of Organization Development

The practice field is known as Organization, not organizational Development.  The target is the whole organic system (not just parts of it) and its core capability to adapt and prosper.  Creating an adaptive, learning organization is a key capability for surviving in today’s fast-changing environment.

An adaptive learning organization consists of three interacting core components: 1) Purpose; 2) Processes; 3) People.

Successful organizations are driven by clear, inspiring & shared meaning as to its basic purpose, mission and values.  The component of Purpose  refers not only to written documents on vision, mission and core values which many companies post on their walls but more importantly to a shared mindset of every member of the organization on its strategic directions & priorities.  These strategic directions, when fully internalized, guide members of the organization to effective behaviors and actions. Processes on the other hand, are the execution enablers translating the strategic directions towards sustained and consistent results.  The third core component, People, is the key to making the two aforementioned components work.  The power of the people component lies on the quality and commitment of employees of the firm, energized by its leadership & people policies.
Integrating these three components in a way that invites commitment and embeds these capabilities into the overall competence of the organization is the challenge of the OD practice. Specifically, these organizational capabilities consist of inspiring leadership, flawless customer service, a shared mindset on mission and values, a learning and customer-driven culture, among others. In this context, we therefore define Organization Development as a business philosophy and strategy to  systematically  build-up the capabilities of: 1) a shared mindset about purpose and meaning; 2) best of breed work processes; and 3) highly competent and committed members, so that business success is sustained over time.

Theory to Action

In the earlier cited research by Professor Michael Beer, he identifies two characteristics of enterprises that have sustained success over the years:

1) consistent delivery of results and 2) high emotional commitment of its members to the organization’s purpose and goals.  My experience is that senior leaders play a major role in the creation of these types of organizations.  They typically share the same perspective about the nature of people, the nature of organizations and how they cope with changes.  In addition, they pay a lot of attention to crafting their work culture by ensuring that: 1) every member has a clear sense of common directions, 2)  there is a strong commitment to customer satisfaction, 3) they have inspiring frontline leaders, 4) coordination among units and people is well-oiled, and; 5) all members are skilled in doing their key tasks
In practice, these senior leaders spend substantive time & investment in creating emotional bonds among all members of the enterprise; install processes and systems which are aligned with the company’s basic purpose and priorities and create an internal climate of trust, based on truthful & open conversations.

OD Approaches

Using the updated definition of OD as the systematical build-up of an organization’s capabilities, the following segment covers areas of practice  which illustrate OD work on Purpose, Processes and People (the three Ps of OD): 1. Top Team Development and Alignment, 2.  Executive Coaching & Mentoring, 3. Executive Continuity and Development of Future Leaders, 4.   Development of Core Competencie, 6.  Developing a High Commitment Organization, 7. Joint Ventures, Partnering and Alliances, and 8. Enterprise Excellence

Analyzing each key areas of practice, it is evident that interventions may vary from those designed to improve the effectiveness of individuals through those designed to deal with teams and groups, inter group relations, and the total organization. There are interventions that focus on what people do (task issues), and those that focus on how people go about doing it ( process issues).

From a strategic OD perspective, these interventions need to be viewed as a portfolio of tools integrated by an overall OD plan and driven by the senior leadership team of the enterprise.   Otherwise, using these interventions on a piece-meal basis, the practice of OD becomes tactical & segmented.

Organization development as a key business strategy develops the core capabilities of consistent delivery of results and of the people who will execute these value-creating strategies.

(Enrique “Ric” Abadesco is considered a pioneer in the organization development in the Philippines, having headed the first OD unit of San Miguel Corporation & was an expatriate executive of the giant petro-leum company, ExxonMobil Corporation in HK, SG, Belgium and  US. He  taught at the SAIDI school of OD, the Manila MBA program of the University of Western Australia, the Masters in Quality& Productivity Program of the Development Academy of the Philippines and is currentlly the Deputy Chair of the Asian Institute of HR. He is the Principal Consultant of Organizational Transformation, Inc. and is the Chief Learning Officer of Huris, an HR solutions firm. He was elected a Diplomate (the highest honorary rank conferred by the Philippine Society of Fellows in People Management) and is currently its President. He was the 2008 National President of the People Management Association of the Philippines.)