COLD – Harnessing OD theory, practice and interventions as strategic imperative for organizational effectiveness.

This article was originally published by Institute of Organization Development (IOD), Florida-USA.

The thinking and incorporation of organizational development (OD) skills training for directors, C-suites, managers and other work groups is a strategic imperative for building high performance organizations. Most business literature, discussions and training focuses on the skills of organizational members in the areas of economics, audit, finance, banking, business administration, accounting and law. Most of the capacity and professional development programs exclude other key organizational work groups, particularly those at the lower level of the organization’s hierarchy. The failure to be integrative and explicitly focus on organizational development skills in and outside the corporate board rooms significantly affects coherence, adaptability and organizational renewal. Boards, C-suites and managers must proactively consider the opportunities that come with holistically embedding OD principles and practices in their operational and strategic road maps. This article discusses the significance of organization developement skills among all work groups, C-suites and directors. The promotion of OD skills among directors, C-suites and managers has a tectonic impact on the effectiveness of the entire organization.

Why should organizations embed OD theory and practice in their strategic and operational road maps?

OD is of critical importance to organizations for seven reasons:

• Fact-based decision making and cultivation of essential leadership traits

The scale and complexity of the business operating environment require that firms harness OD theory and practice in every fabric of corporate management and governance in order to remain relevant and sustainable. This means organization development should be touted as a strategic imperative for organizational effectiveness. The corporate failures and distress experienced in most economies since the beginning of the century do cast a dark shadow on the exclusive reliance on such skills as economics, finance, banking, accounting and law as defining skills for organizational members. Embedding OD theory and practice in strategic and operational road maps is vital in ensuring fact-based decision-making and the cultivation of essential leadership traits such as mission focused, visionary, analytical and objectivity among work group members. These leadership traits improve strategic thinking and strategic leadership across work groups. The OD theory and practice is instrumental in reinforcing the leaders’ capacity to provide necessary advice and counsel, and improve organizational legitimacy and sustainability.

• Minimize risks by addressing the increasing digital complexities

The increasing digital complexities in the business operating environment necessitate the need for organizational change strategies rooted on OD theory and practices. Harnessing OD theory and practice inside and outside the board room is essential in expanding knowledge; enhancing organizational climate, organizational structure, and organizational strategies. Organizations that prioritize and cultivate OD skills across work groups have an improved capacity for solving organizational problems, managing change, and achieve internal coherence that gives significant competitive advantages to the firm.

• Aligning an organization to the operating environment

Without downgrading the other skills required of directors and other organizational members as specified in various codes and policies in different jurisdictions, OD is a strategic imperative for organizational effectiveness because of its focus on aligning organizations with the rapidly changing and complex operating environment. Harnessing OD theory and practice across work groups enhances organizational learning, knowledge management, adaptive management and the transformation of organizational norms and values. OD is instrumental in organizational effectiveness because it helps directors and senior executives devise change management tactics that strategically reposition the business in an evolving environment while embracing partnerships, collaboration and innovation.

• Enhancing the capacity to resolve complex emergent issues

Organizations that consider OD as a strategic imperative have the capacity to resolve complex organizational issues such as cultural change, introducing new systems or processes, determining the organization’s mission and values, and enhancing leadership and employee engagement. The field of OD is critical to business success and strategy through widespread learning, engagement and constant inquiry that enhances the organization’s capacity to deal with prevalent mega-disruptions, and thrive. It also supports the application of discovery and prediction techniques to further the achievement of organizational goals. Due to the volatility, ambiguity and unpredictability of the business environment, organizations encounter technical and adaptive challenges that require the proactive adoption and application of analytical models and expertise. The models and expertise that drive effectiveness at board and organizational level require harnessing the theory and practices of OD as developed through inquiry, experimentation and learning. The hybrid interventions that OD bring to corporate board rooms enable organizations to be responsive to trends, opportunities, shocks and pressures, and to resolve the complex and disruptive technical and adaptive challenges in organizational life.

• Building congruence across the entire organization

The process of harnessing OD theory and practice supports organizational effectiveness in the following areas: compensation systems, performance measurement and management, sustainable consequences management, leadership and culture change and so on. It also ensures the building of congruence among the organizational structure, process, strategy, people and culture. The ensuing congruence leads to enhanced competitive advantage as a result of sustained business growth, improvements in work processes, and enhanced capacity to innovate and self-renew. OD helps the board to manage risks and to devise innovate ways of managing consumers/customers, change and competition.

• Unifying people in organizations

OD theory, practice and interventions unifies the board, C-suites, managers and all other work groups thereby contributing to the development and effective implementation of well-considered and fact-based business strategies. It significantly influences and alters relationships and motivation of not only board members but the dynamics of all work groups that characterize the entire organization. OD is not normative and therefore promotes systems thinking which helps to understand the interconnectedness and complexity of organizations.

• Increasing strategic awareness among all members

Embedding OD theory and practice in the board room is the inevitable catalyst to addressing all business challenges through enhanced strategic awareness and macro-perspective to corporate governance, which leads to the organization’s capacity to thrive and win. OD skills training and education should be a top priority on director continuous capacity development programmes of the modern corporation. Organizations should seriously consider enhancing the organization development skills of all members in order to build high performing teams, improve individual capabilities, create an enabling environment, and improve organizational performance.

OD is not a normative field; however, for organizations to optimize on the benefits of harnessing its theory and practice as operational and strategic imperatives the seven areas below should be the focus of attention. The capacity and professional development programmes for directors, C-suites, managers and other work groups should:

  • Promote the use of Decision Support Systems and Business Intelligence (BI) tools across all work groups. This requires the definition of the organization’s data value strategy.
  • Encourage the development and implementation of structured and integrative risk governance framework coupled with strategic (transformational) planning
  • Promote enlightened environmental scanning and action learning methodologies.
  • Promote strategic alignment through process-oriented organizational reengineering methodologies.
  • Promote management innovation through R&D across work teams in order to develop well-honed product and service innovations.
  • Devise an integrated Human Resource Management System that unifies all members of the organization.
  • Devise a Performance Management System that is integrative and focuses all members on a common objective.