How organisational development works: procedure and tips

What is organisational development?

The term "organisational development" has two main thrusts. On the one hand, it refers to the fact that organisations are constantly evolving. This happens, for example, through employees who come and go. On the other hand, organisational development also refers to the proactive, targeted change of organisations.

In actively managed organisational development, a target image of the organisation is created in a structured process. The starting point can be a diagnosis of the need for improvement in the organisation, such as inefficient structures or the need for employees to learn. External factors can also create a need for strategic action that affects the requirements of the organisational form. One example of this is new technologies that require different work processes.

As organisations are complex entities, it makes sense to take a holistic approach to organisational development. Organisational development is not limited to individual areas. Rather, it ideally encompasses structures and processes as well as the culture and type of cooperation.

Reasons for organisational development

Organisations do not operate in a vacuum, but in an environment of constant change: Technological developments, social changes, geopolitical shifts - all of these can contribute to a previously successful organisational set-up no longer functioning as effectively. Pressure to adapt can also come from within, for example when processes no longer work or roles are unclear.

The success or failure of an organisation is therefore determined by its ability to self-reflect and adapt. This means that managers and employees constantly critically question established structures and processes, as well as behaviours and cultural choices, and adapt them if necessary. Learning organisations that fundamentally embrace change and development have a clear advantage here.

In addition to constant change, there are also individual events that create an acute need for organisational development. These include, among others

  • Formulation of a new strategy
  • Implementation of an organisational review in the course of a management change
  • Implementation of post-merger integrations
  • Entering a new country and/or launching a new product
  • Entering into strategic alliances
  • Establishment of a new distribution channel

Depending on the reason for the organisational development, the scope can vary considerably. The implementation of a new strategy in particular often involves a comprehensive and lengthy transformation.

Goals of organisational development

Regardless of the specific occasion, organisational development is never an end in itself. Rather, its aim is to promote the successful implementation of the overarching corporate strategy. Accordingly, there is no one perfect organisational form. Rather, it is about finding the best possible interplay of its building blocks for the respective requirements of an organisation and capturing this in a target image.

This image has an external and an internal dimension. The internal dimension includes all aspects that the organisation itself can influence. This includes, for example, the working conditions for employees. The external dimension, on the other hand, includes changes in legislation, technological change or changing customer needs - aspects that are beyond the organisation's direct sphere of influence.

Both dimensions are interrelated: an organisation can (and should) react to external changes. To do so, it should align its internal factors so that the organisation operates efficiently and successfully on the market (or in its respective context). Successful performance in turn opens up new opportunities for employees, whose increased motivation and satisfaction in turn have a positive impact on the company's results.

Organisational development in the narrower sense is conceived as a targeted project with a beginning and an end. Organisational development in the broader sense, on the other hand, is not a one-off project. Rather, it is a continuous process that all organisations should initiate and keep going if they want to be and remain successful.

An efficient organisation is the vehicle for translating a company's claim to success into concrete performance. This is about more than a static organisational chart. After all, it is not only important which employees work in which department, but also how they work together.

Organisational development is complex: if one screw is turned, this also affects other, supposedly remote areas. If the organisation wants to introduce a new product, for example, it may have to form a new department, change decision-making powers and train employees. The time horizon also plays an important role: in the short term, for example, the organisation must work with existing resources. In the medium term, however, adjustments are possible, for example through a change in recruitment policy.

The systemic organisational development approach is based on the idea that these transfers can only succeed with a holistic approach. Individual phenomena - dysfunctionalities as well as successes - are related back to the overall system of an organisation. Systemic organisational development does not start with individual symptoms. Instead, it focuses on the interaction of all elements of an organisation.

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Philip Semelmayer
Philip Semelmayer
Associate Principal

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