Organizational Wellness

Struggling to Compete? Organizational Development Can Give Your Company a Boost

Oct 13, 2022
Last Updated Sep 13, 2023

Businesses face more challenges than ever before. There’s the Great Resignation to think about—with 20% of workers quitting their jobs in the year 2022. Plus there’s the rise in cybercrime to worry about and employee burnout contributing to both resignations and security issues. That’s a lot to deal with. Many businesses are finding themselves at a crossroads or struggling to compete in their respective markets. Luckily, a business crossroads is an opportunity for growth, if approached correctly. 

Organizational development is a way to help your organization when you’re struggling to compete. It’s a great way to give your company a boost and find your way to shape your company in new ways that contribute to growth. Even enormous tech giants like Amazon are using organizational development as a way to get an edge. Amazon invested $700 million in reaching organizational development goals by 2025. 

But where do you start with organizational development, especially if you don’t have $700 million to budget toward it? We’ll walk you through what organizational development is, how it differs from HR, the goals, the organizational development process, and the challenges with it. 

What Is Organizational Development? 

Organizational development is the science-backed approach to aligning people, processes, strategies, and structures in order to create more growth. Organizational development is a planned and systematic change to your organization that is intended to help your organization grow and improve. There are three components to organizational development to consider: 

  • Science based. Organizational development is backed by psychology and social science research. It’s not something companies just “try” and see what happens. Instead, it involves using research to determine what’s effective and implementing strategies and processes that are science-based. 
  • Built for effectiveness. Organizational development is about increasing an organization’s capacity to change to be more effective. It’s a growth-oriented restructuring. 
  • Designed to develop and improve. Organizational development is to develop and improve organizational strategies, structures, and processes. Instead of thinking of organizational development as simply improving the way a process is done, think of it on a larger scale – it encompasses all of the efforts to improve strategies and structures and processes at your company. 

While organizational development started in the 1930s, there’s a reason it’s grown and expanded into what it is today to help organizations. It’s a great big-picture way of looking at your company and how to improve it. 

What Is the Difference between HR and OD? 

You may be wondering what the difference between HR and OD is—since organizational development sounds a lot like what an HR department might focus on. How do they differ? The simple answer is that HR is all about operational techniques and people processes while organizational development is about big picture and holistic growth. Some specifics of HR might end up being part of organizational development and vice versa, but in general, think of HR as the details while organizational development is about looking at the big picture. 

Goals of Organizational Development

So what do you want to achieve with organizational development? Since OD can be such a broad concept to consider, it’s helpful to look at some specific goals of organizational development as a whole. These goals may help you better understand what you can achieve with organizational development and in what ways it could benefit your organization. 

  • Continuous improvement. Most businesses face the danger of business stagnation. It’s a common problem, but no business actually wants to stay stuck in stagnation. One of the goals of organizational development is to combat that problem of stagnation by trying to achieve continuous improvement.
  • Better communication and culture. Workplace culture matters, and 25% of employees are feeling like they dread the workplace because of the culture. A toxic workplace culture is the number one reason people quit their jobs. Communication is also crucial in the workplace, and if employers are looking for communication, the same is true in reverse: employees want employers that can communicate as well. Organizational development has the goal of improving both communication and organizational culture
  • Individual employee development. Career development is another very common reason why people leave their jobs. If they don’t see an opportunity to grow and develop at your company, they’ll find somewhere else to work. So one of the key goals of organizational development is to help provide employees with individual development opportunities. Developing at your company could help keep employees at your company and raise employee retention
  • Product and service enhancement. Your product or service is what your customers rely on your company for. Since organizational development is all about a holistic view on your company, it includes enhancing your products and services—since at the end of the day, that’s what people will know your company for and turn to your company to receive. 
  • Increased profit. At the end of the day, a business does exist to make a profit. Without a profit, your company could face financial trouble or go under. So while other aspects of your business matter, you do also need to consider your profits. Organizational development does aim to help increase profits. This can happen in a variety of ways: improving efficiency and productivity, reducing absenteeism, or minimizing turnover. 
Organizational Development Goals

The Organizational Development Process

Organizational Development is research-based and science-backed, so there are general ways most organizations approach this process. We’ll walk you through a common way to implement the techniques of organizational development or the OD process: 

  1. Identify an area of improvement

The first step of organizational development is to find an area of improvement or a problem that needs to be addressed. Oftentimes you already know where your company is struggling or what problems need to be addressed. But if you don’t—and sometimes even if you do already know the problem—it’s beneficial to use workplace surveys to determine where improvements can be made. That way you can be sure you’re working toward solving the most important problems. 

  1. Investigating the problem

Before implementing any policies, strategies, or practices, you need to better understand the problem itself. This step can also be very data driven. Focus groups, individual interviews, and other similar tools can help you better perform a thorough investigation of the problem at hand before trying to solve it. In general, these are the problem areas you’ll need to understand to put a plan into place: 

  • Why does the problem exist? What structures, strategies, and policies might be the reason for this problem? Where did the problem come from? 
  • What barriers are there to improvement? Why hasn’t the problem improved yet? Will it cost money or involve restructuring to get a problem like this solved? 
  • What previous solutions have been attempted? Has somebody tried to resolve this problem before? Why didn’t past solutions work? Where did past solutions fall short? 

Once you understand these aspects of the problem (found through an investigation), you are prepared to begin working toward solving it. 

  1. Creating an action plan

Now that you understand the problem, it’s time to create a plan to solve it or to improve your area of concern. This plan should be as specific as possible because a general approach or unclear expectations could cause it to fall short. So what does your action plan need? The plan should: 

  • Outline specific steps that will be taken to solve the problem
  • Define a measurable goal
  • Allocate company resources to make those steps possible
  • Clearly define employee roles and how each responsible employee will be contributing to the action plan
  • How you’ll measure success
  • Leadership and management support for employees involved

These specifics help you create a plan that will work toward solving the problem and improving company growth. 

  1. Fostering motivation through a common vision

When it comes to organizational development, you need management support. Leadership is important to organizational development, and you need leadership support to generate motivation and vision for your plan. Your leadership team needs to be on board with your plan and excited about the development opportunities. Once they’re excited, they can help create motivation among the employees. Excitement and motivation for organizational development starts at the top and flows down through the organization. 

  1. Implementing

You have a plan, and everyone’s excited to get started—and they all recognize the real potential your company has here. The next step is to implement your plan. Remember that implementation can take time, and organizational development plans can involve extensive changes that might be unfamiliar or potentially difficult upfront. Keep the momentum going as much as possible as employees start seeing changes. Don’t forget to provide support for employees during implementation. They may need additional training or mentoring through these changes, so be ready to provide the necessary support for your company. 

  1. Evaluating initial results

Remember when you thought of a measurable goal and how you’ll measure success? Once you’ve implemented your plan, it’s time to return to that. As changes happen, make sure to measure progress and the results, so you can get a solid idea of what your plan actually looks like in practice. Then you can determine if your plan is helping you achieve your goal. Is your plan solving your problem? Remember that it can take time to see results, so don’t jump into evaluating your results too soon, or you could miss out on valuable insights. 

  1. Adapting or continuing

Let’s say your plan is working great. What’s next? Continuing on! Keep the plan moving forward to continue seeing results and organizational improvements. If your initial evaluation isn’t showing the results you hoped for, now is a great time to adapt the plan and see where real improvements can be made. 

Organizational Development Process

The Challenges of Organizational Development

Organizational development seems so great, doesn’t it? So why isn’t every organization working on itself holistically? Well, there are some challenges that any company might face with organizational development: 

  • Fear of the unknown. Organizational development comes with a lot of change. Change can be scary for employees and employers alike. You don’t know exactly how these changes will turn out, and that scares people. But the unknown can be a great place for growth, so it’s worth pushing through. 
  • Conflicting goals. One member of the management team might want to allocate resources one way while another has a different goal. Conflicting goals can be a big problem, especially with finances. But with strong communication, your team can align goals and move your organization forward. 
  • Burnout. 77% of employees experience burnout. It’s a big problem for most companies. And burned out employees don’t care as much about working toward big picture goals. Providing great employee support is a good way to combat organizational development burnout
  • Lack of leadership. We talked about how leadership matters to organizational development earlier, so it is a challenge when there isn’t leadership involved. Data can get management on board oftentimes. And within the leadership of the team over organizational development, communication is key. 
  • Lack of understanding. A big hold up for some employees might be that they just don’t see the point of the changes you’re making. If they don’t see the point, they’re going to be confused and potentially resistant. Making it clear what the reasons are and the goals are can help reduce the issues with understanding. 

The Bottom Line

Overall, organizational development is a holistic view of how to align your organization’s goals with its processes. It’s making sure the big picture is helping everything run smoothly. By following these steps, you can work on organizational development at your own company. And with all the business difficulties around right now, organizational development can be what gives you a boost. 

Ready to get started with one way to start improving your organizational development? Talk to a wellbeing specialist today. 

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Wellhub Editorial Team

The Wellhub Editorial Team empowers HR leaders to support worker wellbeing. Our original research, trend analyses, and helpful how-tos provide the tools they need to improve workforce wellness in today's fast-shifting professional landscape.


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