Organization Effectiveness vs Organization Development

Organization Effectiveness

An effective organizationis one that is designed so it achieves its business goals.Organizational effectiveness is the job of the most senior leaders. They are responsible for reading the business environment, knowing the organization's core competencies and then shaping the organization as needed.Typically, effective senior leaders follow a series of steps to achieve desired results. They:

• Develop a thorough understanding of the current and future potential of the company's core competencies (technologies, products, or services).

  
  

• Survey the business environment to understand what the customers want, how the competitors will respond, how technology will change and how the industry will evolve.

  
  

• Create the vision, goals, values and strategies that will help the organization "win" meeting required profit, financial and other goals.

  
  

• Design the structure, roles, processes,policies and procedures of the organization soit can achieve its strategies.

The more effective the design (and, therefore, the ability of the leaders) the greater the "win" because of less waste, lower internal costs, higher productivity and greater customer satisfaction.

Finding the"winning formula" for continued business success, however, is difficult today. The external business environment keeps changing at an increasingly faster pace:

• Customers demand more speed, lower costs,greater customization, fulfilled promises and solutions for their business problems.

  
  

• Competitors are developing greater skill at adjusting to the changing situation and creating innovative organizations that are fast and focused.

  
  

• Technology shifts quickly, combinations of new and old technologies emerge and old technologies are reborn in a new form.

  
  

• Global business processes demand new skills and new structures to deal with the multicultural, multidiscipline roles that must be effective at a distance.

  
  

• Quality,cost and speed are the bases of competition.

We are living during an extremely volatile age where winning depends on the skills of an organization's leaders and the organization's "ability to act."Maintaining organizational effectiveness means constant review,problem identification, and shifting of goals, resources and organizational processes.For most companies, this challenge is beyond their current capability.  Organization Capability focuses on this critical area.

 Organization Development

Organization development is the term used to describe the activities that take place to increase the organization's effectiveness. Conducting OD activities is the primary job of the leaders and the people who support them, including managers and consultants. Through an analysis of the organization's situation, a single(ora series) of actions are taken to make the organization more effective.These actions are called interventions and to paraphrase Richard Beckhard and Wendy Pritchard in Changing the Essence,The Art of Creating and Leading Fundamental Change in Organizations, they must:

• Involve assessment activities to identify the root problems,planning efforts to choose the right solutions to the problems and an allocation of resources to solve the problems.

  
  

• Be organization-wide and include all areas in the organization that are affected by the problems.

  
  

• Be designed and managed from the top to ensure that the efforts are resourced sufficiently and that there is follow through in the organization.

  
  

• Have the goal of increasing the organization's effectiveness and health.

  
  

• Be based on behavioral science knowledge of people during change and address the issues of human performance and satisfaction.

There are many kinds of interventions (or actions) that can be selected to increase the organization's effectiveness. An intervention can be defined as "a single"(or a series of) action that adjusts the goals, processes,relationships,policies, procedures, skills, and culture of the members of an organization to increase the organization's effectiveness in response to particular changes in the business environment. The intention is to select interventions that arelogical solutions for the root issues and to improve the ability of the organization to compete successfully.

Unfortunately,OD interventions, when poorly chosen, disrupt, distract and derail the organization.When things really go wrong, time is lost, people become cynical,and business success slips. The selection of OD interventions requires increasing levels of knowledge and experience from leaders and consultants. To be successful, an OD intervention must increase the organization's effectiveness by:

• Getting the right read on the business situation.

  
  

• Getting the right plan for developing the potential of the organization's core competencies.

  
  

• Identifying the real root problems and gaps. Choosing the right solutions to the problems.

  
  

• Choosing the right interventions to make solutions happen in the organization.Implementing the interventions correctly and completely.

  
  

• Making appropriate adjustments to the organization's capacity to act so it can continue to "win."

Real care is essential to ensure that the energy, time and good will of the organization will be used well and the organization's spirit will be preserved.

OE Roles & Responsibilities

The organization effectiveness roles and responsibilities that key parties must play in today's organizations require greater knowledge, skill and speed than ever before. They demand greater precision, purposefulness and engagement. Any organizational effectiveness improvement effort will have role clarification as a major objective or as asubtle sub objective. The new roles dictate that:

• Business leaders must develop real expertise in competitive strategy and organization effectiveness. They must face the business realities, make the tough decisions,set a very clear direction, and support improvement efforts in words and actions.

• The partners of the business leaders (people in related and relevant functions or organizations who share goals) must learn to integrate processes and share resources more effectively. They must refocus their efforts and sense of success on the achievement of common goals and develop a series of agreements and arrangements that ensure a "win-win" for all.

• Direct reports and other organization members (including trainers) must learn to give strategic input and implement new approaches quickly. Members must purposefully advance their own business knowledge, be aggressive about giving input, move quickly to action, and be a positive force for positive action in the organization.

• Consultants (internalor external) must provide tools to help leaders choose the right directions and make the right decisions. They must be willing to teach, guide,confront coach and encourage leaders through change efforts.

OE + OD = Change

Any OE effort or implementation of OD interventions is intended to change something within the organization. When an element within an organization is changed, people must modify how they do things. Sometimes they are even asked to change how theythink or feel. There are several key principles about effective change management to keep in mind:

• The desired changes must make strategic sense.Arriving at acourse of action is hard work requiring numerous baby steps that link the external environment to the vision and selected strategies of the company. Ifthe plan holds together logically, people will gain great comfort, demonstrate buy-in, and perhaps become personally committed to making it happen.

• Change as little as possible. People are capable of only so much change at a time energy and attention are finite. Find the real issues and pourenergy into them. Don't distract valuable minds with unnecessary activities.

• If the change is big, do it quickly. In some situations, the business environment has changed so dramatically and so swiftly,that big changes are necessary. Big changes often include changing the purpose and work of a function or group, the job assignments, and quality requirements that define "good work." When the size of the change effort threatens to immobilize people and seriously affect productivity, makes and announces the decisions quickly. It is better to have a focus and direction for the future.

• Tell how and why. The credibility of a plan often depends on how well it is communicated. People respond well to hearing the completed story, problems and all. Knowing why certain efforts are required may be the most motivating aspect to half of your employees.

• Involve people. People like to try on ideas, working through issues, offering suggestions and be part of the process. Through inputsessions,  problem-solving teams or action groups, buy-in commitment and creativity can be unleashed.

• Increase the capabilities of everyone. Target the skill areas that are needed for every level in the organization to succeed. Be innovative in the way new knowledge and skills are taught. Growing while meeting the strategy builds people with incredible potential for the future.  This is the challenge of Organization Capability.