Organisational Development - an Introduction to the Approach

Organisational Development (OD) is a capacity building approach from the social sciences. It is a long-term approach to bring about change in an organisation in a systematic and planned manner with the objective of enhancing the capacity and performance of the organisation. This is typically done by reorganising and improving the internal structures and processes. Internal structures are made up of the way people in the organisation have divided their tasks and actually work together as reflected in the organisation's rules, regulations and procedures, the organisational charts and job descriptions. Internal processes are referring to the way people relate to each other which is reflected in the patterns of communication and the mechanisms of cooperation, decision-making and planning.
Improving the internal structures and processes is not an end in itself but a means to ultimately improve the organisation's output, be it products or services.

There are several typical features to the OD approach:

1. It is a participatory approach, involving all organisation members. In the case of small organisations, this includes all members from support staff to professional staff, while in the case of bigger organisations it will be teams or departments (the so-called "organisational families") who are involved in jointly analysing where they can bring about improvements in their respective units.

• By involving everybody in the organisation members/staff develop ownership of and responsibility for their organisation;

• Participation and involvement in improvement processes increase staff motivation and the quality of their performance.

2. The principle of action learning in the approach suggests that the participants themselves analyse their problems, define change objectives, carry out the change activities and, subsequently, learn from these experiences for the ongoing improvement of their activities.

• Solutions that are acceptable for the participants and practical under given circumstances though possibly of a technically sub optimal standard are preferred to technical state-of-the art solutions because the former are viable for the organisation.

3. Derived from the principle of action-learning, there is a typical sequence of phases in the OD approach. It starts with the collection of information about the actual situation of the organization, then continues with the compilation and discussion of these data through the organization members, and goes on with the design of an action plan as a guideline for improvement activities.

• In this sequence of phases of the OD approach, the first step of collecting information about the actual situation (called "Organisation Diagnosis") is a powerful tool when applied in a participatory manner because it increases the knowledge and awareness of the organisation members about themselves ("who we are and how we do things"). Thus, transparency in the system is increased and the ground is prepared for solutions and innovations generated by the organisation members themselves. Increased awareness and transparency also means that natural differences in the way organisation members perceive their organisation will surface. OD encourages the articulation and discussion of these various perceptions with the aim of negotiating and at best achieving a (new) common understanding of all organisation members involved.

• For the purpose of Organisation Diagnosis, a variety of methods ("toolbox") are employed to look at the organisation from different angles and to generate a diversified database. The typical mixture includes "hard" data, i.e. the facts and figures from management tools such as business plans, as well as "soft" data such as people's personal views and experiences ("what everybody knows and feels about the organisation"), derived from group work and individual interviews.

Example Topics of Organisation Diagnosis Group work concerning the range of services offered, the organisational structure (organigramme), the organisational landscape, strengths and special expertise Individual interviews with staff about tasks and task description, work satisfaction, work place equipment, decision making competencies, leadership style, cooperation, problems and needs Plenary discussion about operational planning and financial planning on the basis of the actual Business Plan Group work concerning the division of work, coordination and communication Group work concerning external relationships and market position

• After concluding Organisation Diagnosis the organisation members will have an increased understanding of how their organisation is functioning in its various aspects. They will now be in a better position to pinpoint particular problems and suggest effective solutions. Change objectives will now jointly be formulated, operationalised and put together in a concrete action plan. Experience shows that change objectives usually aim at improvements in four areas: the organisation's output, its relationships with other organisations, its resources (particularly human resources) and its internal structures and processes.

Example Working on the organisation's output (provision of products and services) Analysis of provided services (e.g. how is the composition of services decided upon, how are clients/customers attracted, how are prices fixed, how is ensured that clients' needs are taken into account, present and future market share, etc.) Analysis of clients'/customers' typical features (business size and capital endowment, sector, gender, etc.) Analysis of socio-economic data of the location (if available) Impact analysis of services (which effects can be observed on the clients'/customers' side, how can they be attributed for, etc.) Benchmarking of certain services with comparable services of competitors Analysis of existing cooperations with other organisations Which conclusions can be drawn from this analysis for the organisation's service provision?

 

Example Working on internal structures and processes- Introduction and coordination of regular team meetings (e.g. for planning, monitoring and team building purposes)- Improvement of planning procedure: breaking down annual objectives into mid and short term objectives and phases (individual staff and team level)- Introduction or improvement of the reporting system (individual staff reports and their coordination and compilation by the management)- Designing job descriptions for all staff- Introduction of systematic staff performance appraisals and human resources development- Participatory analysis of performance figures from the business plan, appreciation of success and proposals for improvement

• In order to efficiently carry out planned improvement activities, it may be sufficient to assign special tasks temporarily to individual staff. However, depending on the nature of the task, it will often become necessary to create temporary structures like task forces or working groups that will be disbanded once the particular objective is achieved. In the case of large-scale organisation-wide changes, it may also become necessary to install a steering structure with a coordinating function for several sub-groups.

• Following the principles of action learning, individuals, groups and committees working on improvement objectives have the task of implementing what has been agreed upon in the action plan, and in addition they must also assess their actual achievements regularly and monitor whether their activities are still contributing to the intended objective. If done properly and regularly, these self-assessments constitute an important element of organisational learning and capacity development whereby the members of the organisation gradually learn to compare actual achievements with planned targets and to integrate corrective action as they go along. When this activity is carried out with a strong focus on results in terms of quality and quantity, it will enable the organisation to effectively steer its own performance.

4. Ultimately, this strategic focus of result orientation in the OD approach can only be brought about when the people involved develop a clear sense of direction and commitment. These qualities are usually captured in the vision and mission of an organisation and need to be translated into all aspects of organisational life. For example, one area where the qualities of direction and commitment materialise practically is good leadership that will build and reinforce commitment and result orientation among staff. Another example is an incentives system (monetary and non-monetary) that is designed to support the achievement of set targets by stimulating staff motivation.

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