Nigel Cassidy: Hello. In this edition we’re od’ing on OD, short for Organisational Development. What is it? Why does it matter? I'm Nigel Cassidy and this is the CIPD podcast.
Welcome. If the HR professional’s job’s to get the best out of a workforce it’s the organisational development and design types within it who have to delve deeper into the organisation to find out what makes it tick. That's beyond everyday concerns like recruitment, training, rewards, and all the admin that goes with being a people professional. It’s the strategic stuff around how your place actually functions or ought to function to achieve its goals. So this CIPD podcast is all about the dark arts of OD: that's adapting, improving and evolving an organisation so it can deliver on its goals so it can grow and advance.
Well here with me at CIPD headquarters to help us with this Linda Holbeche, co-director of The Holbeche Partnership, widely acknowledged as an influential thought and practice leader in this field. Hello.
Linda Holbeche: Hello.
NC: And Caroline Nugent, HR Director at the Financial Ombudsman Service, who’s held some key directorships in public organisations and joined the CIPD board last April. Hello.
Caroline Nugent: Hello.
NC: Well Linda, can we start with a tiny bit of history? I know from the CIPD website that organisational development came out of the US in the 1940s, in the 1950s, and it seems to have its roots in all kinds of thought and practice, behavioural science, sociology, even psychotherapy, so what is it?
LH: Well as you say the history of it is very rich but fundamentally it’s the applied field of organisational dynamics. It’s how groups work; it’s how organisations work as a system and how they adapt to the environment in which they’re operating but the history is rich and diverse because the origins of it back in the 40s, and even before that, were given a boost if you like by the terrible tragedies that befell people during the Second World War.
A lot of the leading thinkers at the time like Kurt Lewin wanted to understand how it was that when you put groups of people together, groupthink can lead to disastrous behaviours and choices, just as they can lead to very positive behaviours. So he wanted to understand that and developed a range of ways of understanding and applying processes to help people understand each other better.
NC: So Caroline Nugent I mentioned at the beginning that OD goes a bit deeper than just the plain vanilla HR, so does everybody actually recognise that it is a tool and it’s something that should be there to be used when change is needed?
CN: I don't think necessarily, I think some people drop into it by default. I think there are some organisations that don't particularly understand what OD is and will see it as, this is HR, do your change, do your restructure but don't understand the background to it, particularly around the change aspects, so I think that's something that some organisations, and I think from a professional point of view have we really sold what OD is enough? As you say it’s been going for many, many years now and I think there is still some misunderstanding of what it actually involves and what it is.
NC: Do you agree with that?
LH: I do. And I think it’s very interesting that as, in the current time, we’re in such a period of rapid transition, I mean at least everybody recognises that, what with technology, political uncertainty, economic uncertainty etc. there's a real awareness that the old business models don't work as well as they used to do and organisations and working practices are going to have to change very quickly and the awareness is growing that we don't know how to make these changes.
So consequently lots of organisations I come across have suddenly appointed people to OD roles who previously were minding their own business in L&D roles or HR roles and not necessarily having exposed them to the kind of skills development and experience that would be handy in that role. So a lot of people I think are struggling a bit with it.
NC: Caroline I must say I'm a bit foggy about the difference between the normal HR function and OD?
CN: So I think HR, as you were saying earlier, recruitment is a good example. So we will look at we need x position, let’s go and recruit it, I think from the OD bit is what’s going to happen longer term and what changes do we need so we could just recruit a HR professional for example or an architect, for example? But actually longer term what does it mean the organisation wants?
And I think again as a profession we’ve wanted to get at the table, being that word that people have put in quite a lot, but have we been that strategic or have we challenged? Have we the agile, the adaptability? Have we really challenged what an organisation wants from its OD going forward? And I think that's part of the challenge from HR.
NC: And a lot of people also talk about design as well as development. Is there any fundamental difference? Are the two Ds the same?
LH: They’re related but in my view they are different. They’re both systemic, so for example, as Caroline was saying, if you’re trying to develop more innovation, speed things up, etc. you need to look at the whole organisation, not only at a specific chunk of it. And very often that leads on to what used to be called the McKinsey 7s or the Peters 7s, the system, strategy etc. And what for me distinguishes the design pieces is that that's looking at the so-called hard triangle or structures, systems and strategy more specifically. And very often there’s a neglect, if it’s done by external consultants, of the so-called soft S which is the staff and the shared values and all that kind of thing, which is where organisation development in particular comes in. So for me you can't design if you want it to succeed without development but you can do development without design. It depends what you’re trying to achieve.
CN: I agree totally with that because I think part of the challenge in the past is we’ve brought in a transformational expert so there’s been this expectation that you bring somebody in, they can transform the organisation, they go, but they’ve not necessarily understood the culture of the organisation and then how you do that change, but a sustained change. And as you say the people aspect of change is the biggest thing.
NC: So talk me through the nitty gritty then: the change has been designed, the architecture has been done, what are the OD people who are in-house, who've got to make it work, what are they doing? Are they mainly persuading people to follow the new rules? Are they talking the management about implementation? What are they physically doing all day?
CN: I think it’s again wider than that. It’s all aspects of that but it has to be at that strategic level. It’s got to be top down and implementing day to day decisions such as if you’re doing a job redesign, again you can change somebody’s job, if somebody wants to they can unpick that job. So it’s the perseverance, it’s the going round, you can't just put in one thing like an L&D programme and expect that the change things going forward. It’s the constant reviewing, almost the ROI of it, the why, the what, those kind of things. If you don't put that in it again just becomes one aspect you do to somebody and they can unpick if they want to, whether that be a manager or an employee.
NC: Okay. And I want to ask you both this, does it take a particular kind of animal to do this work? Are there people who are really good at it or is it something that ends up just being given to somebody and they may nor may not have the skills?
LH: Well I think it depends on your starting point. Some people do come with a kitbag of skills, particularly if they’ve got a learning and development background, which enables them to both understand some aspects of group dynamics and apply them to things like team development and conflict management, if they’re trained in mediation, or whatever. But fundamentally for me it depends on what level of OD activity you’re engaging in. If you’re, in a way, focusing on the really strategic elements, such as Caroline has outlined you really do need to understand the business and how it operates. You need to understand its processes and how they might be improved.
You also need confidence and credibility with senior management because by and large if you're going to shift the culture of the organisation and the ways of working you have to really start with the people at the top because they, in a sense, mandate everything else and they model everything else. So that's not an easy call, even for some very experienced HR directors. And I think there's also, just as with HR professionals, the pressure is on to be evidence-based, I think that's also true of OD professionals who are often one and the same, to be able to marshal their data, pinpoint where to make a start on shifting a culture and process to something more healthy.
CN: And as you say that credible partner, that being known in the organisation that you will challenge senior leaders, that credibility of being able to say some things that perhaps some people don't want to hear when they’re particularly at a very senior level, that truth to power type scenario, I think that's critical for an OD or the multi-tasking HR, OD partner.
NC: So how do you handle things if you've been handed this hot potato, it’s not going well, senior management just want to see results, they want to see the organisation’s goals reached, how do you handle that, particularly if you’ve not a lot of experience in OD?
CN: Part of it is obviously looking at things like the CIPD profession map. I mean if you want to learn what it is you've got to understand it. So part of it is your self-reflection. But I think it’s also important that you go and ask everybody, bottom up, what’s not working? So again it’s challenging why something has not taken place and being comfortable to ask everybody, so ask some of the people that have had this done to them rather than been part of the journey.
And then that truth to power bit, go and explain why it’s not working. And you may have to unpick and go back. I think HR professionals, if you look an act from HR you want to find a solution and you want to bring it in, the OD professional wants to embed it and then ongoing. We like to see things happen quick because we’re all so busy and we want to move onto the next thing. In OD it’s the embeddingment [sic] of it because as creatures of habit we will go back if we can to what it was like before, because, as Linda said, we don't particularly like change.
NC: Now Linda a lot of people like to talk about an ecosystem don't they? We’ve already heard a word about learning and development and other aspects of HR, so give us a sense of where organisational development fits with everything the people professionals do?
LH: Well I think there are considerable overlaps but there are some distinct areas at the same time. So for instance I think L&D and HR and OD have all got concerns for developing a healthy working environment. I think HR particularly is concerned about all aspects of the employee experience from recruitment to exiting, if need be, and engagement of course is part of that. Learning and development they’re really key to enabling people to develop the skills they need in this very fast-changing environment. The cross-skilling and up-skilling that's required.
OD for me takes the most systemic view of the lot. It in a sense has to enable some sort of integrated view involving all aspects of the HR profession but also senior management, about what it is we might need to do as an organisation to survive and thrive in this changing environment. And that may mean making difficult business cases, it may mean delving deeply into those very uncomfortable areas for the organisation, issues to do with cultural blockages, power and so on.
And in that sense I think ultimately the OD function is, without being change management in the conventional sense, I'm not saying that's an admission of failure, because change management in the conventional sense as in project management, is often very much needed, but it’s very much about enabling an organisation to dynamically adjust and adapt and knowing how to make that happen. And to be honest HR and learning and development are in a sense obliged to focus on the here and now and the immediate requirements of the business and OD has to pick up the cudgel of and let’s see how we use the short term to develop the long term.
NC: I get all that. That's a kind of ideal situation but as the HR function shrinks in many organisations is there not the danger that all the OD stuff just gets swallowed up? It’s kind of what the top management think HR do?
CN: There is absolutely a risk of that, and it doesn’t matter whether you’re private or public sector, the here and now is very important. It’s no good coming up with something that's going to take five years in a private sector organisation that may be gone in two years because its bottom line has been affected. So you have to multi-skill and I think even more so now because HR, as a support service, as the backbone often is shrinking in organisations.
So for me the most senior person within HR has to be supported by people that want to do that change, that know as a profession you've got to deal with the here and now because you have to be sustainable, but you have got to keep pushing at the boundaries and getting people to realise if we don't do x this is what’s going to happen.
So recruitment is a good example. You could do mass recruitment and basically get people on seats but actually are they the long term sustainability? What is it you need? What behaviours do you need to be a sustainable organisation?
NC: So where’s it going in the future? Is this a good discipline to be in?
LH: I think so. It’s certainly not going to become irrelevant, far from it. The challenge is growing enough people with the awareness of what it involves and with the skills to contribute, whether they’re people in HR or L&D roles who adopt and OD mindset, approach their day to day work in that way, it’s not going to go away, if anything through every aspect of the HR function it’s possible to do this agile way of approaching OD which is take two steps forward, reflect, what works, take forward and grow from there, bit by bit. Build your allies. Start to create momentum, start to produce some results. And if you've got two or three choices, choose the one that’s likeliest to produce future benefits as well as the present benefits.
CN: And I think for me, from a professional point of view are the HR profession able to work in the ambiguity that's needed going forward? And I think that's a critical thing that we need to reflect on personally as to whether you can look to see what you don't know is out there and work and work in that risk-based approach because you do not know what’s coming round the corner. And as the professional person you've got to be able to give confidence both to employees and managers that don't worry there is a solution to this. We may have to work out a few things but ultimately there is a way of getting through it. So being able to work in ambiguity to me is critical.
NC: Okay well that seems a good point to end on. We’re coming to the end of our time on this so what can we take away? Well it’s been said many times that people don't so much dislike change they dislike being changed, so it must follow that good OD is about evolving an organisation’s architecture, as we’ve heard, so people can see what they do and how they do it does matter, and come to embrace change instead of fighting it.
As always there's resources on the CIPD website. With a big thank you to Caroline Nugent and to Linda Holbeche. Until next time it’s goodbye.
