Three Reasons Why Organizational Development is a Startup's Secret Weapon Organizational development: the dull-sounding term that could transform your startup.
By Aytekin Tank Edited by Frances Dodds
Opinions expressed by Entrepreneur contributors are their own.
The name "Philips" has long been synonymous with light bulbs. Founded in 1891, the Dutch company also developed some of the earliest radios, electric shavers, TVs, and imaging products like CT scanners and MRI systems.
As the world began to shift from incandescent bulbs to light-emitting diodes (LEDs) and more efficient technologies, Philips realized it needed to adapt – fast. Its lighting division now focuses on systems and services, from corporate installations to selling wi-fi-enabled lights controlled by voice and mobile apps.
To date, Philips has dodged the fate of failed giants like Kodak, Blockbuster, Tower Records, and Pan Am by looking ahead to see a different world. Instead of doubling down on past triumphs, companies that realize they need to evolve – and have the tools, systems, and people in place to do so – enjoy a deep market advantage.
There are endless ways to think about change. It's a huge topic for startups and global conglomerates alike. As the founder of my own startup, I want to ensure our business remains innovative and adaptable. That's why I'm eager to learn more about Organizational Development (OD), and to share what I've discovered to date.
Related: Is Organizational Renewal the New Phenomena to Achieve Success?
What is OD?
Honestly, I hadn't heard of Organizational Development until a few months ago; the phrase doesn't exactly get your pulse racing. But this comprehensive field holds exciting possibilities.
In his classic 1969 book, Organization Development: Strategies and Models, Richard Beckhard said OD initiatives should be planned across the company, managed from the top, and increase the organization's health and effectiveness. "OD professionals focus on enhancing organization capacity," writes Beckhard, "through alignment of strategy, structure, management processes, people, and rewards and metrics."
Beckhard's definition is a mouthful, but OD is essentially the art and science of change – ensuring people and systems can adapt, innovate, and embrace constant transformation. While employee training and development is often an ad-hoc process, for example, OD flows directly from a company's core goals.
OD initiatives might include hiring a sustainability consultant, hosting a learning session on personality types in the workplace, enrolling employees in technical classes, or anything else that strengthens a company from the inside out.
Why it matters
Developing skilled, engaged staff and efficient systems is always a good business strategy. However, the benefits don't end there. Here are three reasons to consider a structured OD program for your company.
1. It boosts emotional intelligence
Both people and companies can have emotional intelligence – and it's critical for a healthy work culture. Emotionally intelligent companies help their employees develop skills and become better, more productive people. "The best companies have mentoring programs or their equivalent, where new employees learn from more senior ones," writes leadership consultant Judith Humphrey. "More broadly, talent development should be embedded in the organizational DNA."
Related: How can an Organization Become Sustainable?
At JotForm, our New Grad program pairs inexperienced employees with seasoned designers, developers, or other professionals. Brand-new staff members serve as "co-pilots" for senior employees, or work on dedicated projects and receive regular feedback. We also bring in external mentors to stretch our skills in areas like data science and marketing.
2. You'll attract and retain upcoming talent
Millennials and Gen Z currently comprise 38% of the U.S. workforce – a number that's expected to reach 58% over the next decade. Experts say young workers expect more frequent and formal professional development from their employers than previous generations. "They believe that training should be focused, customized, and directed toward their career advancement and personal development," authors Robert Cummings, Sheila Grice, and Nicole Modzelewski write in Fast Company.
The authors say millennials also prefer hands-on learning. They want to solve real problems and respond best to interactive training, rather than traditional, top-down instruction. At our company, we ask new hires to release a product update on their very first day. The update can be tiny, but the challenge underscores personal agency; everyone is empowered to act decisively and implement their ideas.
3. OD can reinforce your purpose
Knowing why you're in business – beyond making profits – is essential for both success and satisfaction. Purpose clarifies tough decisions. It also filters everything from marketing messages to hiring. As you develop a cohesive OD program, purpose is the guiding light; it determines what your company needs to effectively navigate change.
Weaving your WHY into learning, development, training, and onboarding will ensure your company pursues the right opportunities, and it encourages teams to connect the dots between their day-to-day activities and the company's vision.
For decades, everyone from academics to psychologists viewed work as a transactional experience. They believed employees simply traded their time for financial compensation and benefits. Not only do we know, implicitly, that this relationship is far more complex, but research shows that most people crave meaning in their work.
"Conventional economic logic tends to rely on external motivators," professors Anjan V. Thakor and Robert E. Quinn write in Harvard Business Review. "As leaders embrace higher purpose, however, they recognize that learning and development are powerful incentives. Employees actually want to think, learn, and grow."
In addition to a formalized OD program, look for the people who naturally spread ideas, while encouraging others to embrace new possibilities. "Every organization has a pool of change agents that usually goes untapped," say Thakor and Quinn. "We refer to this pool as the network of positive energizers." Harness this important group, and you'll amplify your company's ability to manage, and even maximize, the power of change.
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