Why Organization Development is Important in Project Management?

With the business landscape continually evolving and posing challenges for corporate leadership, companies that strive to keep up with rapidly upgrading technologies, transforming market conditions, and dynamic customer demands can only survive. This makes the concept of organization development (OD) heavily important amid this modern evolving environment, particularly within the practice of project management and product management. 

This article will focus on the organizational development process, example, strategy and more. Alongside this, go for the Project Management certification and take advantage of live, interactive training sessions with certified project managers.

What is Organization Development (OD)?

Organizational development is an elaborate and strategic undertaking that is developed by organizational development and changement management experts, with an element that is touching every business function to enhance performance and to remain competitive over the long term. This strategic effort from the organizational development and change management experts is marked by its systematic approach, which is aimed at making continuous improvements across all organizational facets, be it its culture, structure, processes, or overall functioning.

At the heart of organizational development lies the pioneering work of Kurt Lewin, an esteemed American psychologist who played a critical role in shaping this field. Lewin's groundbreaking theories and methodologies, such as the change management model, have provided invaluable insights into understanding organizational behavior. His work forms the backbone of many modern OD practices, which further underlines his profound influence on this discipline.

In the organizational development practice, planned interventions are a key component, allowing organizations to implement structured changes in business operations. These interventions utilize behavioral science knowledge, which provides a strong understanding of human behavior in organizational and corporate settings. Through this knowledge application, organizations can drive meaningful changes which are not only going to improve the business operations but also are going to enhance their employees' satisfaction and performance. If you are seeking to boost your project management expertise, PRINCE2 training offers a valuable opportunity to acquire essential skills and certification

What are the Goals of Organization Development?

Businesses should consider the improvement of organizational performance, enhancement of employee satisfaction, and fostering innovation as the primary goals of organizational development. This approach serves as a pipeline for driving change and enabling organizations to adapt to new technologies that can come up from time to time, market disruptions, and rapidly evolving challenges. 

By taking on the principles of organizational development, both large organizations and small organizations can build a culture that has a value that motivates continuous learning, encourages open communication among stakeholders, and promotes a collaborative work environment among team members.

Why is Organizational Development Important to Business?

Organizational development (OD) is of very high importance to businesses in the modern, ever-changing market landscape. It's not just a business strategy but a tool that shapes how businesses can adapt to change, to most required innovation, and to the need to increase efficiency. With a strategic approach to Organizational Development (OD), companies can develop their people power, strength in inherent processes, and organizational culture. This will be enabling them to achieve strategic goals and maintain a competitive edge in comparison with their competitors

Some reasons why organizational development is crucial to businesses are discussed below:

• Continuous Learning and Development: Organizational Development motivates the leadership and business partners to foster a culture of ongoing learning within the organization. This is an encouraging step for employees to build their skills and capabilities constantly. This approach is important for businesses to stay ahead of industry trends and maintain their competitive edge.
• Organizational Effectiveness: As the Organization Development definition itself states, through planned interventions and strategic changes, Organization Development enhances the overall organizational effectiveness. It optimizes business processes, improves communication, and increases efficiency.
• Employee Engagement and Satisfaction: By fostering a diverse and inclusive work environment through an Organization Development example, we can enhance employee engagement and job satisfaction. As we already know, a satisfied employee will be more productive and will stay longer with the organization, thereby reducing turnover rates.
• Change Management Capabilities: Implementation of an Organization Development plan will equip businesses with the tools and strategies that are necessary to manage change effectively. This approach is highly important in today's rapidly evolving business environment. The organization’s ability to adapt to change is a highly defining factor for success in business growth.
• Innovation: Organizational Development benefits are plenty in view of innovation as it encourages new idea generation and implementation of the same as a part of an organizational effort towards driving innovation. This allows businesses to develop unique products, services, or processes, and this will be providing the businesses with a distinct competitive advantage.

Types of Organizational Development Models

Organization Development (OD) models provide us with a framework for understanding and managing change and can be used to guide organizations through a variety of challenges discussed earlier.

There are many types of Organizational Development models, with their own strengths and weaknesses. Some models are identified to be more focused on improving individual performance, while others are focused on improving team or organizational performance. Some models will be more appropriate for small organizations, while others are more appropriate for larger organizations.

One should choose the Organization Development model by considering the specific needs of the organization. They should consider factors such as the size of the organization, the nature of the change, and the resources available.

By studying and implementing different types of OD models, organizations can improve their effectiveness and achieve their goals. In the following text, we'll explore some prominent models, including Lewin's Three-Step Model, Action Research, Business Process Reengineering, and the McKinsey 7-S Framework. If you're looking to advance your career in project management, obtaining a PMP certification is a crucial step.

1. Lewin’s Three-Step Model

Lewin’s Three-Step Model was proposed by Kurt Lewin. It is a three-step model that encompasses a foundational concept in the field of organizational development. The three steps in this organizational development model consist of "unfreezing" (preparing the organization for change), "changing" (implementing the desired change), and "refreezing" (solidifying the change into the organizational culture).

2. Action Research

The Action Research model consists of steps such as diagnosing an organization's problems, action planning based on the problems that evolve from the diagnosis, taking action based on the planning and diagnosis, evaluating the outcomes from action, and specifying learning from the outcome evaluation. The action research approach promotes a cyclical process of change with continuous feedback and adjustment. This action research approach can also be compared to the Plan-Do-Check-Act (PDCA) cycle of Project Management.

3. Business Process Reengineering Model

The Business Process Reengineering model involves radical rethinking and redesigning of business processes in order to achieve large scale improvements in key business aspects like cost, service, speed, and quality. The impact of implementing the Business Process Reengineering model is more than just business improvising as it is an approach for redesigning the way work is done to support the organization's mission better.

4. McKinsey 7-S Framework

The McKinsey 7-S Framework is a management model developed by business consultants Robert H. Waterman, Jr. and Tom Peters while working for McKinsey and Company, the prominent management consulting firm. This framework focuses on seven business-defining factors below: 

• Shared values
• Strategy
• Structure
• Systems
• Skills
• Style
• Staff

This 7-S model from the ex-McKinsey team is used to analyze how well these elements are aligned and how they can be changed to improve performance.

Process of Organizational Development in Project Management

Making Organization development a part of the project management processes involves a systematic process. Generally, this approach begins with recognition of the need for change, followed by a current state diagnosis, and then an appropriate intervention design. This process is then followed by the implementation of the change and then the evaluation of its effectiveness. At all the phases of organizational development, it emphasizes participation, engagement, and open communication among all stakeholders.

Organizational Change and Development Impact

The application of an organizational development strategy impacts businesses in a significant manner. When it is executed effectively, Organizational Development (OD) results in improved communication, increased productivity, and enhanced job satisfaction among employees. This will also be fostering innovation, supporting an organization's readiness for adapting to market changes. Additionally, Organization Development (OD) assists in aligning employees' goals and values with those of the organization by creating a harmonious and productive environment for work.

The Future of Organization Development

As the business landscape becomes more complex day by day, the importance of organizational development will grow at a faster pace. New technologies, global economic shifts, and evolving workplace trends are set to shape the future of Organizational Development (OD). Companies will be better equipped to thrive only if they can anticipate these changes and adapt their Organization Development strategies accordingly. Some of the trends we can expect in the future can be incorporating AI and machine learning into Organizational Development processes, emphasizing diversity and inclusion, and focusing on sustainable practices clubbed with organizational growth goals.

Conclusion

To conclude, organizational development should be considered a vital element in today's ever-changing business environment. It provides a strategic roadmap for businesses to navigate change, improve processes, and foster a culture of continuous learning and improvement. With the right organizational development plan and a foolproof execution of the plan, businesses can enhance productivity, improve employee satisfaction, and ultimately achieve sustainable growth.

If you are looking to deepen your understanding of organizational development or are considering implementing it in your project management practices, we recommend you consider taking KnowledgeHut's best Project Management training. This certified training course will help you get globally recognized accreditations and interactive sessions to practice project management techniques.