Build a better, stronger, and more resilient organization. Improve the quality, transparency, use and ROI of the intellectual capital available to the organization.
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An organization is a place where people organize skills and structure to create behaviour that moves us towards a vision.
To develop is to grow or cause to grow and become more capable, mature and well-functioning.
The development process consists of
“If you want truly to understand something, try to change it.” - Kurt Lewin
Organizational development is the practice of describing organizational expectations, and aligning people with those expectations.
The motivation for doing organizational development is to improve what an organization is able to do (capabilities), and how well it does it (well-functioning).
When done right, organizational development systematically improves the clarity, accessibility and reusability of the know-how (aka intellectual capital) available to the organization.
Organizational development can be broken down into:
The following chart visualizes this concept:
Organizational features represent the capabilities of an organization. The purpose of an organizational feature is to provide value to an organizational user, so that they can be attracted and retained.
An organization has three primary types of user: customers, employees and stakeholders. Using this structure, organizational features can be broken down into three main categories:
Customer features are primarily intended to improve different aspects of the customer experience (like quality of outcome, satisfaction of process, etc). Examples include relevant competencies, clear and transparent delivery processes and customer satisfaction surveys.
Employee features are primarily intended to improve different aspects of the employee experience (like psychological safety, role clarity, etc). Examples include role descriptions, regular check-ins and talent development programs.
Stakeholder features are primarily intended to improve different aspects of the stakeholder experience (like compliance, control and return on investment). Examples include organizational roles, responsibilities, processes and systems within areas of finance and ESG.
When we do organizational development, we are asking ourselves which features are considered valuable to our users, and how we can design new useful features, improve existing ones, or remove features which are no longer relevant or not being used.
Additional resources:
An organizational developer is someone who is responsible for contributing to the organizational development process.
In large organizations you will find dedicated Organizational developers who focus solely on org dev responsibilities (meaning responsibilities within people development and insight management). In smaller organizations, the organizational developer hat is usually one of many hats held by one or more leaders.
If you are expected to put on this hat from time to time, consider thinking of yourself as the character Tank in the Matrix movies when you do.
It is your job to decide which expectation disks are needed in order for people to be capable and function well, build out those disks and make sure that the right disks are successfully uploaded to the right people at the right time.
The purpose of organizational development is to improve how well the organization functions and delivers value, and to avoid a dysfunctional organization.
When done right, organizational development positively impacts how people think about, organize and experience our work.
Study the following chart to improve your intuition and ability to recognize dysfunctional and well-functioning organizations:
A well-functioning organization is an organization that is perceived to be:
When you have a well-functioning organization
A well-functioning organization can scale more quickly and with less growing pains, allowing the product to reach the market more quickly.
Organizational debt is the result of all the decisions and actions that should have been done to ensure an organization is operating at peak health and efficiency – but weren’t.
A useful metaphor is arthritis. As an organization grows and matures, the equivalent of arthritis builds up in its joints. This makes the organization less nimble and less able to deal with competitive challenges.
When leaders don't make the changes they should have, organizational debt accumulates.
Steve Blank, who first coined the concept of organizational debt, explains it like this:
Startups focus on speed since they are burning cash every day as they search for product/market fit. But over time code/hardware written/built to validate hypotheses and find early customers can become unwieldy, difficult to maintain and incapable of scaling. These shortcuts add up and become what is called technical debt. And the size of the problem increases with the success of the company.
You fix technical debt by refactoring, going into the existing code and “cleaning it up” by restructuring it. This work adds no features visible to a user but makes the code stable and understandable.
While technical debt is an understood problem, it turns out startups also accrue another kind of debt – one that can kill the company even quicker – organizational debt. Organizational debt is all the people/culture compromises made to “just get it done” in the early stages of a startup.
Just when things should be going great, organizational debt can turn a growing company into a chaotic nightmare.
Growing companies need to understand how to recognize and “refactor” organizational debt.
Read more
When we say that we want to operationalize organizational development, we mean that we want to ensure that the improvement of the organization happens predictably, transparently and effectively.
How to automate and streamline improvement in your organization
When we refer to something as data-driven, we mean that progress is compelled by data, rather than by intuition or personal experience.
Data-driven decision-making (DDDM) is defined as using facts, metrics, and data to guide strategic business decisions that align with your goals, objectives, and initiatives.
According to a survey of more than 1,000 senior executives conducted by PwC, highly data-driven organizations are three times more likely to report significant improvements in decision-making compared to those who rely less on data.
Data-driven organizational development means that you use facts, metrics and data to guide where and how you prioritize your organizational development efforts, and evaluate the impact of those efforts.
A learning organization is an organization skilled at creating, acquiring, and transferring knowledge, and at modifying its behavior to reflect new knowledge and insights.
Kaizen is a method for continuous improvement. Incremental improvements that over time amount to extraordinary results.
The McKinsey 7S Model is an organizational tool that assesses the well-being and future success of a company.
It looks to seven internal factors of an organization as a means of determining whether a company has the structural support to be successful.
The model comprises a mix of hard elements, which are clear-cut and influenced by management, and soft elements, which are fuzzier and influenced by corporate culture.
The hard elements are as follows:
The soft elements are as follows:
Read more about the McKinsey 7S Model.
Operational excellence is a mindset that embraces certain principles and tools to create a culture of excellence within an organization. Operational excellence means every employee can see, deliver and improve the flow of value to a customer.
Insight management is the process of proactively and deliberately organizing insight to ensure the best return on investment of the intellectual capital available to an organization.
Alignment is the degree of which a group of people understand, see and belive the same things around a given topic.
In a misaligned team, people have different agendas and ideas of what the top priorities should be, and spend a lot of time engaging in discussions and office politics in an attempt to sway decisions in their direction.
Check out the survey How well aligned are we? for specific indicators of an aligned team.
Role clarity is the extent to which a team member has a clear understanding of their own roles and the roles of others.
Role clarity answers the who and how of the organization:
Who should do what and how should they do it?
Concepts typically used to produce role clarity are roles, responsibilities, processes, skillsets, and many more.
In order to gauge goal clarity, check out the survey How clearly do I understand my role(s)?
Goal clarity is the extent to which a team member has a clear understanding of the high-level goals and objectives of the team, and the individual development goals of team members.
Goal clarity answers the what and when of the organization:
What should we be focused on and when should we be focusing on it?
Concepts typically used to produce goal clarity include goals/objectives (OKRs), prioritized initiatives/projects, and individual development goals.
In order to gauge goal clarity, check out the survey How clearly do I understand our goals?
The components that make up goal clarity can be visualized as the following 2x2 matrix:
Existence clarity is the extent to which a team member has a clear understanding of the direction and identity of the team.
Existence clarity answers the why of the team:
Why does this team need to exist? What do we care about?
Concepts typically used to produce existence clarity are purpose, mission, vision, and values.
Observability in a team referes to how easily stakeholders can observe how work has been done.
In a team with low observability, one has to actively seek out and talk to the individuals doing the work in order to identify progress and obstacles.
Low obserability makes it more difficult to manage and audit work, identify delays, mistakes and inadequate resources.
Organizational transparency is the practice of sharing information regarding the organization's operations to its people with the intent to create clarity, trust, and accountability.
Team transparency means to which extent we can easily predict how processes and behaviours will be acted out within a given team.
In an opaque team, it's anyone's guess how a certain task, project or process will be planned, carried out and reviewed depending on which individual it is assigned to.
Opaque teams heavily rely on the faculties of the individuals to which work is assigned, and are unable to collect and share best practices over time.
Team transparency can be broken down into
Accountability means that people are made aware of and speak up when someone is not properly adhering to their responsibilitites and priorities.
In a team with low accountability, poor performance goes unnoticed or is not called out, allowing it to cause long-term damage to both results and morale.
Instructability is the degree at which something is easily instructable.
In a team with high instructability, people know where they are expected to receive tasks and other types of work expectations, and predictably address and adhere to those channels in their day-to-day work.
In a team with low instructability, making a change to how work is done feels arduous and difficult, which in turn makes people avoid attempting to make the changes they believe are neccessary (or rather, to justity why they aren't sufficiently important).
Focus means that people are spending as much concentrated, uninterrupted effort as possible their top priorities.
In a team where the focus is low, a significant portion of time is spent on efforts that are not a top priority without anyone even noticing or pointing it out.
A team with low focus will spend more time achieving their goals (or perhaps not even know what those goals are).
Productivity, in the context of a team, is how efficiently the team is able to produce desired output of sufficient quality.
A team with low productivity becomes a bottleneck for acheiving organizational goals, causing stakeholders and members of adjacent teams to grow annoyed and frustrated.
Discoverability is the degree to which something, especially a piece of content or information, can be uncovered, even if the user did not know that that something existed.
In a team with low discoverability, people aren't aware of (or can't learn on their own) which information exists or where they can expect to find certain types of information. This results in time wasted either looking for, not having access to or even duplicating information.
Autonomy means to which extent people are able to complete work on their own, without having to rely on others.
In a team with low autonomy, people are constantly interrupting each other's flow in order to get their own work done. This can cause a vicious circle where experts hesitate to invest in delegating their work for fear of being constantly interrupted, causing the autonomy of others to remain low.
Enablement within a team refers to the extent team members are given the proper training, tools, equipment and support they require to do their best work.
In a team where enablement isn't a priority, people are expected to figure things out for themselves and leaders are more focused on their own work rather than the enablement of others.
In a psychologically safe environment, people feel safe to take risks, make mistakes and speak up.
In a psychologically unsafe team, people fear being reprimanded for doing their work incorrectly or for pointing out things that could be fixed. This increases anxiety and reduces motivation.
The improvability of a team refers to the degree a team methodically learns from its mistakes and predictably improves how work will be carried out in the future.
In a team not focused on improvability, different people repeat the same mistakes because insights of how to avoid those mistakes is not identified and embeddded into the processes and checklists used by the team.
The unity of a team refers to how tightly knit the team is, and to which extent team members trust and care about the well-being and success of the other members.
When we think of teams with a high level of unity, we commonly think of army troops and special forces.
When team unity is high, morale is high, people feel strongly commited to the team and team members have complete confidence in one another.
When team unity is low, people are suspicious of one another, disagreements can fester, decisions drag out and the team as a whole might buckle under pressure.
The bus factor is a measurement of the risk resulting from information and capabilities not being shared among team members, derived from the phrase "in case they get hit by a bus".
In a team with low bus factor, other team members are concerned with key personell leaving or even just taking a vacation. When they do, work is halted or improvised, and oftentimes completed incorrecly.
Adaptability refers to a team's ability to change and adapt to changing circumstances.
In a team with low adaptability, willingness to change is low, and justifications like "that's how we've always done it" is commonplace.
A team with low adaptability runs the risk of not evolving, and eventually being outperformed by those who do.
Intentionality of a team means that the team has a high degree of awareness in relation to where they're are going and why, and keeps this awareness top-of-mind in their day to day work.
In a team with low intentionality, people are just showing up and completing tasks, without having any real sense of why it matters.
Low intentionality negatively affects motivation, which in turn hurts performance.
Innovation within a team is determined by the extent a team is introducing new ideas and producing original and creative solutions to problems.
A team that does not innovate is more vulnerable to disruption and being outperformed by other, more innovative forces.
Management Research Group conducted a study among 10.000 senior leaders. When asked "What is key to your organization's success", 97% said "long-term strategic thinking".
In a separate study, 96% of leaders said they don't have time for strategic thinking.
A lot of leaders, at both the team and organizational level, tend to spend a large portion of their time on operational roles, responsibilities and projects, and little to no time on proactive leadership.
Leaders often justify this time split by one or more of the following reasons:
These types of leaders commonly feel the most useful when they are down in the trenches delivering alongside the rest of the team/organization, and feel less comfortable and capable focusing on leadership responsibilities like strategy, proactive leadership and organizational development.
For leaders matching this profile, it can be useful to do an exercise in order to improve awareness of how they spend their time.
Here are e couple of exercies you could try:
During such an exercise, it can often become painstakingly clear how little time is spent on the roles, responsibilities and projects that are the most impactful to the organization when done right, and the most hurtful to the organization when neglected.
Practically, organizational development consists of improving the quallity, transparency and use of the intellectual capital and the culture utilized by the organization.
One practical way of working with organizational development is to focus on producing great answers to the questions posed by the org- and team playbook, and ensure people have a high degree of clarity and familiarity with the answers.
In the beginning, when you start focusing on organizational development, expect to to encounter various cognitive, emotional and behavioural friction which can, at times, be frustrating and sap your energy.
But, much like starting to do physical workouts, the initial soreness and fatigue resides over time as you and your team build organizational development muscles.
Here are some of the common friction points you can expect to encounter:
Expect to spend a signifcant amount of brainpower in order to
Organizational development responsibility can be broken down, delegated and created accountability for using several different taxonomies.
It's not clear that one taxonomy is superior to the other. Ultimately, when selecting a taxonomy, it comes down to what suits your organization best.
When making a decision, you might take into consideration:
Startup
Organizational development Organizational health Leadership stages
Board
Organizational development Leadership stages Leadership support and enablement Leadership development
Executive roles Leadership stages Leadership support and enablement Leadership development
Management Organizational development Leadership stages Team management Organizational health Leadership support and enablement Leadership development