Why you should include Organisation Development in your 2021 Business Planning Process

This article follows on from last week’s post on Organisation Design where we concentrated on structures and processes. Today we will talk about the People issues that are crucial when forming a plan for success in 2021.

Last week we suggested that now is the perfect time to plan for when, hopefully in spring, the Coronavirus restrictions ease. We recommended carrying out a SWOT and PESTLE analysis to determine where the company is at present compared to how it expects the market to be in the future ‘new normal’, and then put plans in place to succeed in 2021 and beyond.

We recommended using a process called Organisation Design, which involves building a structured plan based on the above analysis to improve a company’s structures, systems and processes and to ensure the company is positioned to triumph once the shackles are taken off later this year.

We noted that unfortunately the article would have been too long if we covered the other piece of the jigsaw, Organisation Development, as well as Organisation Design but both should be included in your analysis. Today we add the missing piece so your jigsaw is complete and you will be fully equipped to build your plan.

CIPD define Organisation Development as ‘a planned and systematic approach to enable sustained organisational performance through the involvement of its people’.

One course I attended stated that ‘organisation development provides managers with a vehicle for introducing change systematically by applying a broad selection of management techniques. This, in turn, leads to greater personal, group, and organisational effectiveness’. To me this is the essence of Organisation Development i.e. getting the best from every employee both individually but also as a group, developing them into high performing teams.

• Making individuals in the organisation aware of, and able to align their actions to, the vision of the organisation.
• Encouraging employees to solve problems instead of avoiding them.
• Strengthening inter-personal trust, cooperation, and communication for the successful achievement of organisational goals.
• Encouraging every individual to participate in the process of planning, thus making them feel responsible for the implementation of the plan.
• Creating a work atmosphere in which employees are encouragedto work and participate enthusiastically.
• Replacing formal lines of authority with personal knowledge and skill.
• Preparing members to align with changes and to break stereotypes.
• Creating an environment of trust so that employees willingly accept change.

If you are ready to employ and submit the fate of your organisation to one of the braniac consultants who understand the science of the subject and will take you on the full Organisation Development journey then we’d be delighted to assist you. But we would not be able to do some of the work for you ourselves as, whilst I am familiar with how to use Organisation Development techniques, I am not a practitioner.

Whereas this methodology may be appropriate for large organisations who need such a holistic approach e.g. retailers battered by Covid and the accelerated move to online shopping, it is unlikely to be attractive or for the costs to be acceptable for the audience this article is aimed at i.e. the SME market. We limit our Organisation Development work to practical actions that follow the principles of Organisation Development but, crucially, compliment the Organisation Design approach described in last week’s article.

Therefore, in the remainder of this article we will concentrate on what I believe are realistic and practical Organisation Development type actions that SMEs should consider when planning for the hoped for upturn in the spring rather than the whole ‘true’ Organisation Development experience.

Our approach to Organisation Development methodology generally applies the techniques described last week regarding structure and processes to people and management issues that were identified in the SWOT and PESTLE analysis i.e. once we know ‘where we are now’ and compared it to the strategy that defines ‘where we want to be’, this approach will help us to close those gaps with actions that are appropriate to the specific needs of the organisation.

I suspect that most organisations really don’t care whether the actions we discuss are based on Organisation Design or Organisation Development, and we rarely even mention the terms when working with them but for the purposes of this article it’s important to explain the basis of our work in this area so you know it is based on sound, recognised and proven techniques.

The outputs of the analysis that compares ‘where we want to be’ with ‘where we are now’ based on the results of the SWOT and PESTLE analysis will clarify the areas where you need to take action.

Once the gaps and the required actions have been identified the next step is to judge whether the current employees are capable of carrying out the necessary steps i.e. you will need to judge the ‘Organisational Capability’ of achieving the strategy.

If the current team in the current structure is not able to deliver the plan there may be some difficult decisions to be made. Clearly this process may lead to roles being made redundant if they do not fit the strategy. You can read our free guide 8 Steps to Making Redundancies on our blog or view details of our complete Practical Guide to Making Redundancies below.

Historically, Organisation Development is linked to behavioural science, sociology and also psychological analysis research from around 70 years ago into the factors that influence how people behave and perform at work and what actions lead to improved performance.

The crucial point about Organisation Development is that, although there will clearly be an initial flurry of activity and actions it should be a continuous process that enables the organisation to evolve as its employees develop and as markets and the world the organisation operates in, change.

When discussing Organisation Design last week we advocated using the Galbraith Star model to decide the outcomes. There is no point making things complicated and reinventing the wheel so we would normally use the same structured approach for the People issues identified through Organisation Development and do it all at the same time i.e. as alluded to above the organisation would not be aware of which bits were OD and which bits were OD (I really wish the powers that be would change one of the names so they weren’t both called OD!).

Once the gaps have been identified as areas that need work, before deciding on specific actions the organisation should then consider:

• How important it is to close the gap? Answers may result in you deciding it is top priority, or at the other end of the scale, decide is not worth the effort!
• How big is the gap?
• How difficult is it to close the gap? Again, the effort has to be worth the reward.

The subsequent actions that come out of the analysis will normally fall into one of the following categories:

• Human, such as coaching, mentoring and training.
• Technological / Structural, such as Using Lean, Six Sigma or Business Process Re-engineering methodologies.
• HR departmental, such as arranging employee surveys, introducing or updating performance management systems.
• Strategic, such as cultural change or organisational transformation programmes.

In order to carry out the necessary actions the organisation is likely to need to either ‘buy in’ the knowledge, skills and experience required or ‘build’ the capability of the current workforce through training etc and these actions will form a significant part of your plan.

Clearly the actions that come out of the analysis regarding buying or building capability to achieve the strategy will differ for each organisation. ‘Buying’ is usually recruiting permanent, temporary staff or specialists but examples of ‘building’ capability of the organisation’s people may be:

• Improving the goalsetting process and appraisal reviews,
• Changing spans of control so managers can manage their teams more effectively,
• Spotting and managing poor performers,
• Rewarding and developing good performers,
• Identifying and developing managers and directors of the future (succession planning),
• Improving retention rates of employees through motivation techniques,
• Improving recruitment processes if too many new starters are leaving,
• Embracing diversity, especially if senior management is predominantly straight white males, or the workforce does not reflect the racial make up of the local area, 
• Improving culture to reduce actions others may find offensive e.g. comments regarding race or sex,
• Improving the absence rates of employees.

Whether as a stand alone piece of work or as part of an Organisation Design / Organisation Development initiative 186hr can help organisations manage and improve all of these issues following best practice and adapting them to your unique culture.

Although some of the above may be viewed as business as usual type actions for HR, in this context what makes them different is that they would be part of a planned process based on the results of your SWOT and PESTLE exercise and the resulting gap analysis for the whole organisation. The outcomes and activities would then all be part of a planned approach to enable the organisation to achieve its strategy.

We then come to the difficult bit, implementing the changes with the employees. Clearly, change is an uncomfortable process for people, whether it involves a new structure, processes, new colleagues and especially if it has been necessary to make redundancies.

Organisations should be very mindful of the ‘change curve’ to ensure the required changes can be implemented successfully. There are many versions of the curve but this one by Clayton is my favourite for explaining changes affecting employees at work.

Although the organisation will want the changes to be implemented NOW, the above diagram clearly shows that it is crucial to wait until employees are in the ‘Acceptance’ stage of the curve before implementing the changes. If employees are not ready to accept the changes they are unlikely to buy in to them and in extreme cases will attempt to sabotage the changes as they actually want them to fail.

Where employees are on the change curve at any point can be judged by regular communication with staff, focus groups and staff surveys.

The best ways to speed up employees’ journey through the change curve to ‘Acceptance’, enabling you to safely implement the changes are through openness and regular communication along with listening to concerns and reassuring them.

When researching this article several studies suggested asking the team to draw pictures of what they feel about the situation, and then having them explain their drawings with each other. This is apparently beneficial because it allows employees to express emotions they normally would not be able to put into words. Also, drawings often prompt active participation in the activity, as everyone is required to draw a picture rather than hiding in the corner and harrumphing, and then discuss its meaning. I’m not convinced personally but if it works for you then great!

If you like the theory of areas such as Organisation Development, the most relevant one to this article is by Lewin (an Oldie but a Goodie!). Whereas there are some excellent theories in this area, they all cover the more pure form of Organisation Development, which is not covered in this article for the reasons explained above.

Lewin researched peoples’ approach to change and how the organisation can help and support employees through the process, He devised the ‘unfreeze, change and refreeze’ model as follows:

Unfreezing

Lewin described how, faced with a dilemma or disconfirmation, the individual or group becomes aware of a need to change, thus unfreezing their views about the status quo.

Changing

The situation is diagnosed and new models of behaviour are explored and tested to see which work best.

Refreezing

Application of the new behaviours is evaluated, and if successful they are adopted.

There is inevitable overlap between the stages, since the boundaries are not clear-cut and cannot be in such a continuous process.

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As always, if you would like to discuss Organisation Development or any other HR topics please do not hesitate to contact us.

My thanks to course notes from CIPD and Henley Business School plus Factsheets from the CIPD website, and also the book Organizational Behaviour by Stephen P Robbins which was kindly leant to me by my good friend and fellow HR Director Lea-Ann McLean.