Understanding organisational development

Business doesn't stand still these days.

The world is always changing, so businesses need to change over time or else they get stagnant or fall behind the competition. It's not just about making new products or finding new markets, though - the internal structure of a company influences its employees' behaviour and performance, so it needs to evolve too.

Organisational development is the process of making those positive changes over time.

The Wikipedia page for Organisational Development is pretty massive - somewhere near 5000 words. Some definitions of it can go on and on, and many clever business academics have written massive texts on what is actually is. So we'll keep things simple.

If you're looking to find out what organisational development actually is and why it's important, here's a quick guide to get you up to speed.

What is organisational development ?

The CIPD defines it as: ‘a planned and systematic approach to enabling sustained organisational performance through the involvement of its people’.

In English, this means giving employees opportunities to be successful so that they benefit as well as the company. It's deeply linked with change management; it involves changing organisational structures and processes so people can do their jobs better.

And those things are deeply related to company culture - the shared attitudes, beliefs and behaviours a company holds throughout its owners, management and workforce.

So it can involve making practical interventions that can lead to deeper, more cultural changes within the company.

Why should you care about organisational development?

We can't lie - it does sound like a bit of a snoozer. It comes across as a corporate buzzword that'd make you immediately tune out if you saw it in an office powerpoint. But it's an important concept to follow if you're responsible for keeping your company firing on all cylinders.

Like any sort of management theory, at the end of the day it's about people. And people's needs are pretty simple most of the time. Ted Bauer, a writer on work and management culture, reckons much of the conversation around 'the future of work' boils down to a couple of core concepts - people's innate need for respect, and for opportunities for growth:

"effective work (and thus, effective organizational development) typically comes down to two factors: respect and opportunity. That’s what people want, and that’s sussed out in a variety of different studies, surveys, and interviews. Now, you can balk and say people really want a fat paycheck — which is probably true — but don’t believe they should say that on a survey, which is why ‘respect’ rises to the top."

He goes on to say that the more you believe respect and opportunity are key parts of organisational development, the more you'll understand how companies can be evaluated by those criteria.

You could look at it in terms of Maslow's Hierarchy of Needs. This psychological theory says we need five basic things to be satisfied, from our basic physiological needs like food and shelter, to psychological needs like belongingness, prestige, and fulfilment of potential.

Work provides the safety of a regular salary, but in order to satisfy those psychological needs and retain happy, healthy, productive employees, your company needs to maintain a sense of positive evolution for everyone involved. If the only thing you're providing is a paycheque, all you'll get is minimum effort in return.

How can you promote organisational development in your company?

Organisational development isn't as measurable as some other metrics. It's often talked about alongside fluffier concepts like values, culture and missions, or misunderstood to be about financial results instead.

One way to promote it is to invest in your staff - train them, help them live healthy lifestyles, offer mental health support, help them participate in mentorships, sabbaticals, and other interesting projects.

As Ted Bauer writes, one of the most tangible, visible manifestations of 'org dev' is the internal movement of people. Promote upwards, internally, as much as you can. This satisfies those two needs noted above - gaining respect and opportunities to move forward. It's generally cheaper than hiring outside, too.

The only risk is that you might preserve more of a 'family' feel, where it becomes a bit of an insiders' club. This can lead to a lack of innovation and situations where nobody questions each other because they don't want to rock the boat - "that's the way we've always done it." It won't help build your cognitive diversity as much, but you can think creatively to try to avoid that.

Bauer neatly sums up what's at the core of proper organisational development: "It’s letting people be adults, contribute ideas, feel like a part of something broader — and then rewarding them for doing well."

A creative company culture can give you a good chance of doing that.