CIPD - Organisation development

Corporate and HR strategy

Revised April 2010

This factsheet gives introductory guidance. It:

provides a definition of the term and identifies common features
gives a history of organisation development (OD), and seeks to clarify confusion around the term
describes a typical OD methodology and examples
discusses the relationship between OD and HR
includes the CIPD viewpoint.

We have all heard of Maslow, Herzberg, and the Hawthorne effect. What they all have in common is that they provide illustrative examples of the roots of HR theory, and that they are all rooted in a practical understanding of how people interact with organisations and systems. They also represent key learnings in the rich field of O&D. This is important in understanding organisation development and its links with HRM. For many, OD can be a confusing term, and yet, we are often more familiar with it than we may initially realise.

Definitions

In the context of this factsheet, we define OD as ‘planned and systematic approach to enabling sustained organisation performance through the involvement of its people’. Behind this definition lies a depth of research and practice, but also confusion.

Others have described OD in the following ways¹:

A planned process of change in an organisation’s culture through the utilisation of behavioural science technology, research and theory. (Warner Burke)
A long-range effort to improve an organisation’s problem-solving capabilities and its ability to cope with changes in its external environment with the help of external or internal behavioural-scientist consultants, or change agents as they are sometimes called. (Wendell French)
An effort (1) planned, (2) organisation-wide, and (3) managed from the top, to (4) increase organisation effectiveness and health through (5) planned interventions in the organisation’s ‘processes’, using behavioural science knowledge. (Richard Beckhard)
A system-wide process of data collection, diagnosis, action planning, intervention, and evaluation aimed at (1) enhancing congruence among organisational structure, process, strategy, people and culture; (2) developing new and creative organisational solutions; and (3) developing the organisation’s self-renewing capacity. It occurs through the collaboration of organisational members working with a change agent using behavioural science theory, research and technology. (Michael Beer)

These definitions may vary in emphasis, but there are common features:

OD applies to changes in the strategy, structure, and/or processes of an entire system, such as an organisation, a single plant of a multi-plant firm, a department or work group, or individual role or job.
OD is based on the application and transfer of behavioural science knowledge and practice (such as leadership, group dynamics and work design), and is distinguished by its ability to transfer such knowledge and skill so that the system is capable of carrying out more planned change in the future.
OD is concerned with managing planned change, in a flexible manner that can be revised as new information is gathered.
OD involves both the creation and the subsequent reinforcement of change by institutionalising change.
OD is orientated to improving organisational effectiveness by:

helping members of the organisation to gain the skills and knowledge necessary to solve problems by involving them in the change process, and
by promoting high performance including financial returns, high quality products and services, high productivity, continuous improvement and a high quality of working life.

The challenge with many of the definitions of OD is that they may be technically correct, but do they actually help people to understand and practice in the field of OD? This factsheet explores the history of OD to increase the understanding and looks at the characteristics and examples of OD in practice.

History of OD

OD developed primarily in the USA out of a number of different schools of thought and practice that have included social psychology, systems thinking, and psychotherapy. More recently, this has also included newer developments such as business process re-engineering, story-telling and large group interventions.

This, in part, explains some of the confusions about OD. The term ‘OD’ is sometimes used interchangeably with other disciplines, such as organisational design, learning and development, and organisation effectiveness. As a result of this, two people may share the job title ‘OD consultant’, yet come from very different disciplines and do some very different things in their work.

Academic beginnings

American psychologists and behaviourists working in the late 1940s and 1950s found that the application of participative methods to small groups led to attitude change, higher performance and greater commitment. Abraham Maslow argued for the inherent potential of individuals to pursue ‘self actualisation’, which was more likely to be achieved under conditions of openness and personal recognition. Organisation theorists like Chris Argyris and Rensis Likert advocated organisation-wide participation as a means of motivating individuals and hence achieving greater performance. New theories of leadership and change also developed: for example, Douglas McGregor proposed that different styles of leadership would result in different reactions – more positive under ‘Theory Y’, which was participatory and democratic, and more negative under ‘Theory X’, which was oppressive and authoritarian.

Some of the early founders were heavily involved in the T-group movement, a movement resembling group therapy and focusing on group dynamics (although the ‘T’ was said to stand for ‘training’ rather than ‘therapy’). T-groups operated on the underlying premise that causality for behavioural problems lay in an individual’s perceptions, assumptions and feelings concerning events and people around the individual. The solution could be found by altering these elements with feedback in a sensitivity group led by a nondirective trainer.

OD spreads

In the 1960s, the term ‘organisation development’ came into being as an overarching umbrella to include and embrace all of the previous thinking about the behavioural aspects of people involved in changing and developing organisations’². OD then spread rapidly within American organisations, which were looking for help in changing the styles of their managers to improve organisational performance. T-group exercises, run by consultants, often on a large scale and designed to move managers towards more open and trusting behaviour, were frequently the vehicle for this. In the UK, group-based methods of learning and change were being used in coalmines with the involvement of the Tavistock Institute.

OD at this stage could be ‘categorised as primarily focusing on individuals and interpersonal relations. [It] was established as a social philosophy that emphasised a long-term orientation, the applied behavioural sciences, external and process-oriented consultation, change managed from the top, a strong emphasis on action research and a focus on creating change in collaboration with managers’³.

However, ‘like the growth of many management techniques, OD gradually took on characteristics of a fad’² and then began to be criticised for not achieving the desired outcomes. It was seen to be too ‘touchy-feely’, and in particular to put the individual before the organisation and the informal organisation before the formal organisation. Not all consultants practising OD were well trained, and OD’s emphasis on openness and change was seen as threatening by managers. It was questioned whether OD’s emphasis on training programmes was in itself sufficient to produce lasting changes.

Putting OD into practice

One of the challenges in delivering OD work is that it not just what you do, but also the mindset that is brought to bear on the work. So what does this mean in practice? Anything that an OD practitioner does in the organisation can be described as an ‘intervention’. Two examples of OD interventions are:

The HR team working with the Business Planning team to develop a performance management system that properly aligns individual and organisational goals
HR Business Partners working with their IT and Finance colleagues to provide a consistent approach to support management teams in delivering strategy.

So what makes these distinctively OD? An HR practitioner may design and implement a new performance management system without it being an OD intervention. What is distinctive is the creating of alignment with the work of other parts of the organisation in a planned way – what can be described as a ‘systemic and systematic mindset’. The idea of OD as a ‘scavenger discipline’ is helpful in understanding that it borrows tools and techniques from a wide range of professions and functions in the organisation. Successful OD practitioners are often very effective at working with colleagues in different departments or organisational disciplines.

Characteristics of OD

It is the underlying characteristics of OD work that help us to see the commonality across the different areas of OD and the link to HR.

OD work contributes to the sustained health and effectiveness of the organisation
OD work is based upon robust diagnosis that uses real data from organisational, behavioural and psychological sources
OD work is planned and systemic in its focus, that is taking account of the whole organisation
OD practitioners help to create alignment between different activities, projects and initiatives
OD work involves groups of people in the organisation to maximise engagement, ownership and contribution

CIPD viewpoint

OD is not a new discipline and has always had a focus on people but has only relatively recently become considered as a mainstream discipline of HR. Supporters of OD argue that its strength is its ability to understand the whole organisation and as such it may be inhibiting to root it too firmly in the HR function. However, given the increasing need for the HR profession to act as a business partner, OD and its methods have a part to play in developing HR’s strategic role and its involvement in organisational change, organisational culture and employee engagement. For more on HR business partnering, see our factsheet on that topic.

Go to our factsheet on HR business partnering

OD does not replace HR but it does draw heavily on many of the processes of HR. As a people and problem centered activity, it requires sophisticated people management skills and can enable HR to develop the deep organisational insight that is required if they are to fulfill their potential in terms of ensuring the people asset of the business are fully and most effectively uitilised. Effective OD should also have the support and the involvement of senior executives and hence, if HR is not operating at the strategic level, it will not be more difficult for them to implement OD interventions. Essentially there are at least two aspects of OD which need active involvement from the HR function:

identifying and collecting appropriate data which will inform change
ensuring the active participation of everyone across the organization so that this information may be absorbed, and the key messages acted upon.

Find out more in our discussion paper on HR’s role in developing OD solutions to manage change

Go to our OD discussion paper

References

CUMMINGS, T.G, and WORLEY, C.G. (2005) Organization development and change. 8th ed. Mason, OH: South-Western Publishing.
GREINER, L.E. and CUMMINGS, T.G. (2005) OD: wanted more alive than dead. In: BRADFORD, D.L. and BURKE, W.W. (eds) (2005) Reinventing organizational development. San Francisco: Pfeiffer.
RUONA, W.E.A and GIBSON, S.K. (2004) The making of twenty-first century HR: an analysis of the convergence of HRM, HRD and OD. Human Resource Management. Vol 43, No 1, Spring. pp49-66.
BRADFORD, D.L. and BURKE, W.W. The crisis in OD, in BRADFORD, D.L. and BURKE, W.W. (eds) (2005) Reinventing organizational development. San Francisco: Pfeiffer.

Books and reports

CANNON, J.A. and MCGEE, R. (2008) Organisational development and change. CIPD toolkit.
London: Chartered Institute of Personnel and Development.

GARROW, V. (2009) OD: past, present and future. Working paper 22. Brighton: Institute for Employment Studies. Available at: http://www.employment-studies.co.uk/pubs/report.php?id=wp22.

WHITTINGTON, R. and MOLLOY, E. (2005) HR's role in organising: shaping change. Research report. London: Chartered Institute of Personnel and Development.

Journal articles

BAUMGARTNER, S. (2009) How to develop your OD skills. People Management. 12 February. p39.

ELLIS, F. (2007) The benefits of partnership for OD and HR. Strategic HR Review. Vol 6, No 4, May/June. pp32-35.

GARROW, V. and NARNEY, S. (2009) What does OD do? People Management. 4 June, pp28-30.

HOLBECHE, L. and CHEUNG-JUDGE, M-Y. (2009) Organisational development: what’s in a name? Impact. No 26, February. Available at: http://www.cipd.co.uk/subjects/corpstrtgy/orgdevelmt/
_orgdvwhtnm.htm

This factsheet was originally written by Mike Cannell, an independent consultant and formerly CIPD’s Adviser – Learning, Training and Development, and updated by CIPD staff.

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