Organisational development (OD) involves bringing about changes and improvement in the processes and structures that are part of the human resources (HR) responsibility. That could be one reason why it is misconstrued as the sole responsibility of the HR. This is natural because the two roles tend to overlap and have a common purpose of lending support to other business processes, including those related to employees and change management.
That means, OD cannot happen in isolation. Its success is intrinsically linked to its interconnectedness with various functions and departments within an organisation. It thrives on collaboration and integration, which largely influences its positioning and hierarchy in profound ways.
“The positioning of OD within the organisational hierarchy is contingent on several factors, including the organisation’s age and stage of development. In cases where an organisation is experiencing rapid and substantial changes initiated by the CEO, the head of OD may be positioned to report directly to the CEO,” points out Vivek Tripathi, VP-HR, NewGen Software.
“From a positioning standpoint, OD is part of the CEO’s agenda,” confirms Kamlesh Dangi, group head-HR, InCred. And that is why, he further explains, “There are instances where OD is managed by a separate task force, such as a change-management department, or it’s entrusted to a strategy team responsible for driving change. Sometimes, it’s divided into different components, and the HR aspect of OD falls under the HR department’s jurisdiction.”
“The positioning of OD within the organisational hierarchy is contingent on several factors, including the organisation’s age and stage of development. In cases where an organisation is experiencing rapid and substantial changes initiated by the CEO, the head of OD may be positioned to report directly to the CEO.”
Vivek Tripathi, VP-HR, NewGen Software
Alternatively, OD can be integrated into HR’s responsibilities, often with the head of learning serving as the head of OD, creating a role known as ‘L&OD,’ encompassing learning and organisational development. In such a scenario, OD may be housed under HR with the chief human resources officer (CHRO) as the reporting authority.
However, one common misconception regarding OD is its exclusive association with HR, often seen as solely addressing HR issues. This mistaken belief limits the scope and effectiveness of OD.
“OD is not merely an HR function; it encompasses broader organisational transformation, culture change and strategic development. A more accurate understanding of OD recognises its interrelatedness with HR but also extends its impact to encompass diverse aspects of organisational improvement beyond HR challenges,” points out Tanaya Mishra, VP-HR, Endo International. This broader perspective is crucial for optimising the potential of OD in facilitating holistic organisational change and growth.
In Dangi’s opinion, “The impact of this interconnectedness often leads to a situation where OD fails to be as effective as it can be because it’s typically perceived as the exclusive domain of HR professionals. While the human aspect is undoubtedly important in OD, there are many other factors that must come together to enable meaningful organisational change.”
With OD often misconstrued as being solely related to HR improvement and training, it largely impacts the collaboration between various departments. This is because OD experts tend to be primarily perceived as HR professionals. Additionally, such misconceptions can hinder the alignment of OD with the organisation’s overall objectives.
“OD is not merely an HR function; it encompasses broader organisational transformation, culture change and strategic development. A more accurate understanding of OD recognises its interrelatedness with HR but also extends its impact to encompass diverse aspects of organisational improvement beyond HR challenges.”
Tanaya Mishra, VP-HR, Endo International
Furthermore, sometimes OD initiatives entail alterations in organisational structures, shifts in work methodologies, as well as behavioural changes, particularly among leaders. Consequently, some individuals may perceive this as a change in power dynamics or in the established work routines, leading to inevitable resistance.
Mishra believes that when “one encounters challenges in an organisation such as differences in opinions, team dynamics and working values, OD can resolve the situation by facilitating effective communication, transparency and ongoing engagement.” This is because it involves bringing people together and maintaining a constant dialogue to clarify the organisation’s developmental objectives. It includes identifying the processes, systems and practices within OD necessary for transitioning the organisation from one state to another.
Therefore, the balance between granting autonomy and independence to the OD function and the necessity for integration and collaboration with other departments is a critical aspect that requires careful management.
“The CEO should regularly review the progress in coordination with respective business units or departments,” suggests Dangi. He goes on to explain, “When the CEO actively participates in this review process, it sets the right priorities, and everyone understands that this is a critical area that requires their attention.”
If the CEO doesn’t engage in reviewing the OD mandate, then it can lead to a situation where OD is perceived as relatively unimportant in the organisational context. Hence, it’s crucial for the relevant aspects of the OD team’s work to be continually assessed by the CEO, senior management and even the board.
“From a positioning standpoint, OD is part of the CEO’s agenda. And that is why, there are instances where OD is managed by a separate task force, such as a change-management department, or it’s entrusted to a strategy team responsible for driving change. Sometimes, it’s divided into different components, and the HR aspect of OD falls under the HR department’s jurisdiction.”
Kamlesh Dangi, group head-HR, InCred
Tripathi suggests, “One effective strategy is for the OD initiative team to operate under the supervision of the top-level steering committee.” Sharing his own experience he explains, “In my past consulting experience with such initiatives, we always formed a steering committee, which included the CEO, CHRO and other leaders responsible for reviewing and providing guidance on OD endeavours.”
Additionally, to overcome any resistance, OD can also collaborate with a ‘design team,’ which comprises mid-level employees directly affected by the initiative. This method employs design thinking and leverages the expertise and insights of those impacted to co-create changes, avoiding the imposition of changes from the top down. “The aim is not to dictate but to design a more effective process or a better way of working, placing oneself in the shoes of those affected to determine the right course of action. This approach helps to overcome the challenge of resistance,” opines Tripathi.
However, he cautions, “Despite this collaborative approach, there may still be a need to enforce certain changes, requiring support from leaders and the steering committee.”
When it comes to the autonomy of the OD function, companies can also bring in an external consultant for OD initiatives. This can introduce an outside perspective and fresh thinking, allowing for expertise and an external viewpoint.
From his own experiences Dangi has observed that well-established companies are more willing to enrol their business executives in OD programmes, instead of restricting participation exclusively to HR staff. They recognise that OD should not be confined to HR, but should involve a diverse range of participants to enhance the effectiveness of organisational change.
Additionally, when balancing the autonomy and independence of OD with the need for integration and collaboration with other departments, two perspectives must be considered — a narrow myopic one and a broader one.
“The myopic perspective pertains to focusing on specific aspects such as competencies, succession planning and power management. In contrast, the broader view involves creating a value system and culture for the organisation. This culture encompasses both spoken and unspoken elements and encourages open communication so that individuals feel comfortable expressing their thoughts,” enunciates Mishra. Simply put, OD should not be limited to specific tasks but should play a pivotal role in shaping the organisation’s culture and values, which, in turn, will influence how individuals communicate and collaborate within the organisation.
“Understanding the intricate relationship between OD and other organisational functions is paramount for achieving effective change and development, as it shapes how OD is perceived and where it resides within the organisational structure. In this context, the dynamics of OD’s role and influence take centre stage in the journey towards organisational excellence,” concludes Tripathi.