Today's business challenges call for organizations to design and implement the structures, processes, and systems that will allow their people to flourish-and that will spur change and growth in order to keep up with the competitive marketplace.
The field of Organizational Development revolves around how Organizations continuously respond and adapts (change – structural and behavioral) itself to the challenges thrown by the external and internal environment and ensures success in terms of achieving its Goals
In today's business environment, one of the most important assets for any organization across the globe is the ability to manage change and maintain the health of the organization.
Below is a brief write up giving an overview of various aspects of Organizational Development.
Change Management
One of the important aspects of Organizational Development is Change Management. Organizations very often face the necessity for Change strategic, operational and tactical levels.
At a very fundamental level, an organization is a group of people coming together to achieve a specific set of goals (Quantitative and qualitative, profit and non-profit) through utilization of resources – People, Infrastructure, knowledge, natural resources. The ultimate aim of any organization is to maximize stakeholder value.
An organization typically works in an environment of various stakeholder groups having varied expectations. Stakeholders are individuals, group of people or organizations who form part of the ecosystem of an organization enabling it to achieve its stated purpose. Broadly an organization works with the following stakeholder groups:
Investors – Individuals, groups or Institutions who provide for financial resources for the organization. They are the people who expect financial performance from the Organization which it funds.
Customers: Customers are the ones an organization sells its products and services to and generate revenues and goodwill for the Organization. An organization’s customers would be from diverse backgrounds – demographically and psychologically. Meeting the expectations of customers in terms of product/service quality, service standards, customer relationship, product and service portfolio and communication is of primary importance to any organization.
Employees: Employees form the heart and soul of any Organization. They are the people who at the end of the day help achive organization its stated goals. Employee satisfaction in terms of compensations, skills and knowledge development, career growth, motivation and inspirational aspects would be one of the important goals of Organizations. In larger organizations, the task at hand becomes all the more complex as they have to deal with issues of cultural diversity.
Government: Government form an important stakeholder for it is responsible for creating regulatory and legal environment to foster growth and development. Governments sets regulations, rules and policies for organizations to conduct businesses in a fair and transparent manner. They are the stakeholders who bridge the gap between commercial interests and social obligations of organizations.
Society: Society provides organizations the support to carry out their activities by providing skilled and unskilled manpower. Organizations on their part get involved in Corporate Socials Responsibility activities to acknowledge the contribution of the society in the growth and development of organizations.
Every stakeholder has their own set of expectations that they expect Organizations operating among them to fulfill it. Ideally at any given point in time, an Organization has to be in equilibrium with its stakeholders. Any change in expectations of any one of the stakeholder results in CHANGE. This change has to be managed to bring the organization back to equilibrium. Hence identifying and managing change is of strategic importance to any organizations across the globe.
Very often Change faces resistance from all over. Changing oneself or an organization to adapt to new situations is not easy. The primary reason for this is that change creates imbalances and people and organizations do not want to be in a state of imbalances. Imbalances create a sense of fear and insecurity among people. Hence Managing Change becomes a challenging job for organizations. But as we all know and agree that Change is inevitable.
I will highlight some of the cases (indicative list and not an exhaustive list) where organizations go in for a rigorous change management programs in order to bring back the organization in to a new level of equilibrium in response to changes in the environment:
- Launch of new products and services
- Entering new geographies. Establishing operations in new target markets
- Exit of senior leadership team
- Organization-wide implementation of Software to automate business processes
- Implementation of new regulatory policies affecting the industry an organization operates in. Example: FDI Policy in Retail; Spectrum allocation policy for wireless telecom sector; Tax holiday for IT Sector; SEZ policy for Textile units and so on.
- Induction of new senior management team
- Mergers and Acquisitions of companies that call for integration of companies and its businesses
- Hiving off non-core businesses
- Outsourcing of some of the no-core business processes
- Entry of new competition
- Change in strategy of existing competitors
Corporate Performance Management
Corporate Performance Management is a critical function in Organizations of all sizes and nature. Corporate Performance Management deals with the following activities:
- Setting Corporate Performance Framework and Processes
- Identifying Performance Measures that encompasses every aspect of the Organization
- Performance Monitoring – Policy, Framework and Processes
Organizations across the world use a wide variety of performance measures and monitoring mechanisms. The Corporate Performance Management Framework in Organizations acts as radars to steer the organization in the right direction in the path to accomplishment of the Organization’s Goals. It also acts as a powerful tool to align all stakeholders of the organization towards the common goal.
In recent years, the whole filed of performance management as gained tremendous importance in organizations as they operate in such complex business environment as never seen before. The complexity of interrelationships among organizations and its stakeholders makes it all the more important for organizations to have a sound Performance Management System. Information Technology has only added fuel to the growing importance of this function.
