Hello Fellow Seniors,
If ten HR professionals are asked what Organizational Development (OD) comprises, there will be at least ten different answers, but all of them will share the notion that OD is at the leading edge of Talent Management. That's not enough in justifying budgets for OD organizations when the question is how they help to improve enterprise performance - the subject of a recent inquiry. The historical view is that OD amounts to Training and Development on steroids, so today's function frequently includes all forms of talent development, from Action Learning to leadership development to career pathing and, inevitably, performance management. Another perspective, sometimes called Organization Effectiveness, emphasizes organizational design aspects of OD that are akin to business development in that corporate structure and group dynamics are the key concerns. This version of OD explores how groups interact to create value for enterprises, especially in the wake of restructurings. Another related perspective on OD has to do with how core competency and corporate culture relate to enterprise performance. This mélange of sources and inspirations makes an artist's conception of the ideal OD group a tricky proposition, and budgeting impossible. Unfortunately, the function of an OD group within a company often is related less to corporate strategy than to the interests and background of the group's leader. This makes it harder to establish a connection between OD and corporate value creation - the soundest basis for budget justification, so… We Normally Don't Do Surveys, But…
Our recent New York and Pittsburgh Executive Briefings on the role of HR represented too good an opportunity to pass up for putting this question to the high-level HR executives in attendance. Twenty-eight organizations responded, of which eighty percent had revenues in excess of $1 billion, and seventy percent had 5,000 or more employees. As shown below, respondents were given a list of a dozen OD functions (we didn't want 28 different answers) and asked to rank them in order of importance to their enterprises. Consistent with our inquiry activity, performance management and leadership development led the list. M&A activity was next to last, just two places above "other", which means either that companies haven't yet figured out the importance of HR in M&A activity, or, more likely, that they can't see how getting HR involved would help to resolve the critical integration issues that cause combinations to fail. We also were surprised to see learning organization development finish last, given the emphasis that it has received in recent years. Organizational Development Areas Ordered by Most Emphasis to Least
• Performance Management
• Leadership Development
• Change Management
• Training
• Succession Planning
• Organizational Design
• Measurement
• Team Building
• Career Management
• M & A Support
• Learning Organization Development
• Others: Coaching, Talent Identification, Diversity, Talent Management and Staffing Bottom Line: Performance Management and Organizational Effectiveness appear to
be the primary focus of OD in organizations today. That's good for budget justifications, since that's where corporate value is created and sustained.
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