OD losing momentum: Survey

But in 10 years, will be more important than today
By Amanda Silliker
|Canadian HR Reporter|Last Updated: 05/09/2011

OD losing momentum: Survey

How is OD these days?

OD losing momentum: Survey

But in 10 years, will be more important than today

By Amanda Silliker

In 2010, Comtek Advanced Structures implemented an organizational development (OD) department. The department is responsible for training and development, standard operating procedures, safety management systems, continuous improvement and company values, said Anna Marie Damiani, HR manager at the Burlington, Ont.-based company.

“Because we’ve been around for 17 years, when we had to upgrade something or learn something new, we did, but we didn’t do it when we wanted to, we did it out of necessity,” said Damiani, whose company has 75 employees. “We want to turn it around now and we want to be a state-of-the-art company where everything is the best.”

However, organizational development seems to be less of a focus for most organizations, according to the latest Pulse Survey. The majority of employers (60.2 per cent) agreed organizational development has lost its momentum, found the survey of 586 Canadian HR Reporter readers and members of the Human Resources Professionals Association.

“I think, with the recent downturn, there was a lot of budget cutting so a lot of programs took a back seat to the more crucial financial stuff,” said Timothy Keung, organizational development manager at the Toronto branch of Vincent Associates, which employs 70 workers across Canada.

But 31.8 per cent of respondents disagreed, indicating organizational development has not lost all of its momentum. For Damiani, it’s the number one concern for her company right now.

“Anytime there is a downturn or money is tight, we don’t concentrate on organizational development,” she said. “But this time, we’ve realized it is the one thing we have to focus on and be dedicated to because that’s how you’re going to improve the company.”

With the focus shifting off organizational development, there has been a return to HR fundamentals, found the survey. Slightly more than 63 per cent of respondents agreed there has been a shift in favour of “nuts-and-bolts” HR over the past 10 years. This refers to the tasks HR “has to do” — recruitment, training, compensation and performance evaluations — not those things included in the scope of organizational development, said Damiani.

“There was a momentum switching back to the essentials... and focusing on a few key things,” said Keung. “A lot of talent development or organizational development got kind of delayed and pushed backwards.”

OD still essential for HR

While it may have taken a back seat in recent years, organizational development is essential for HR, according to 91.4 per cent of respondents. However, some companies “put HR in a corner” and don’t ask for its contributions or opinions or recognize the key role HR can play in OD, said Damiani.

“Organizational development is really about the people you have working in your organization so, in order to capitalize on the multi-generational workforce that’s out there and the shift in values of employees, (HR) has to do organizational development to move the organization forward,” said Cheryl Meheden, an instructor at the faculty of management at the University of Lethbridge in Lethbridge, Alta.

Since OD is such an integral component to HR, 84 per cent of respondents agreed it should be part of HR or report to HR. At Vincent Associates, organizational development is “integrated into HR, so they help each other out,” said Keung.

Whether or not organizational development will be effective under the umbrella of HR depends on the organization, said Meheden.

“There are still a lot of companies that see HR as more of a functional capacity and that would decide where OD should be housed,” she said. “If a company sees HR as part of the strategy, then OD should go there but, if not, it should be separate.”

At Comtek, the departments are separate but Damiani works closely with the organizational development manager, especially with training and development, employee assessments and the development of new procedures, she said.

For the most part, business executives see organizational development as having at least some value, according to 91.1 per cent of survey respondents. Executives realize it is necessary for an organization’s survival since it focuses on continuous improvement, said Meheden.

“The economy is picking up and they’re realizing they’re left with this big shortage of development programs or talent, so now they’re trying to focus more and play catch-up,” said Keung.

In 10 years, organizational development will be more important than it is today, according to 61.8 per cent of survey respondents. Organizations are going to be spending more time developing employees and focusing on innovation because they are becoming increasingly essential in this knowledge economy, said Keung.

The makeup of the workforce will also cause companies to be more invested in organizational development as traditionalists and baby boomers are replaced by generations Y and Z, said Meheden.

“They have different needs and you have to be able to harness their passion in order to get them to commit to your organization,” she said. “That’s a part of OD and everybody wins if you can do that.”

How is OD these days?

Analysis from the vice-president of regulatory affairs and registrar at the Human Resources Professionals Association in Toronto

By Claude Balthazard

The impetus for this latest Pulse Survey was to explore apparently conflicting trends. On the one hand, HR is pushing for a more strategic role. On the other, the activities most closely associated with strategic HR — which we referred to as organizational development (OD) — seem to have lost some of their momentum. It is important to recognize OD means different things to different people and this was clearly evident in the comments made by respondents.

We spend a good portion of our time in organizational development activities (team-building, alignment, organizational structure, change management, culture change and organizational values). The average proportion of time spent on OD activities was 48.7 per cent, according to the survey, and ranged from zero per cent (3.1 per cent of respondents) all the way to 100 per cent (7.3 per cent of respondents).

As to whether OD had lost some of its momentum, 60.2 per cent agreed and 31.8 per cent disagreed. Not surprisingly, the proportion agreeing decreased with the proportion of time spent on OD (from 83 per cent for those who spend no time on OD to 37 per cent for those who spend all of their time on OD).

We also asked if there had been a shift in favour of “nuts-and-bolts” HR to the detriment of OD over the last decade or so — the majority (63.2 per cent) agreed while about one-quarter (25.6 per cent) disagreed.

A number of respondents said the economic downturn curtailed OD activities, linking interest in OD with economic cycles. A few independent practitioners noted the amount of available work in the area has declined over the last few years. Others said managing the economic downturn has increased the emphasis on OD activities in their organizations.

Almost one-fifth (18.8 per cent) believed business executives see OD as having high value and a further 44.9 per cent believed business executives feel OD has moderate value. Although OD activities likely have high ROI, their outcomes can be difficult to quantify, said some respondents.

There were many comments to the effect OD was alive and well in many organizations. Indeed, 91.4 per cent agreed OD, as a set of activities or as a set of competencies, was essential to HR. Also, 61.8 per cent thought OD will be more important in 10 years than it is today. However, for many, OD is no longer seen as the distinct function it might have been at some time.

Distinct identities

There were a number of comments that suggested OD has been absorbed into HR and lost its distinct identity as separate from HR. Some linked this to broader shifts that have occurred in HR over the last five to 10 years. A number of respondents indicated the attempt to make OD a separate function was a big mistake and a failure. “OD is dead... but it has risen like a phoenix in the toolkit of leading HR practitioners everywhere,” said one respondent.

To be fair, there were also a few respondents who strongly believed OD should be seen as a distinct profession from HR, with its own set of competencies, and OD should have its own separate certification process. A few believed OD would be better off separated from HR because HR had become more commoditized. Some respondents see OD as the true essence of HR and said HR should be seen as a function of OD.

Claude Balthazard is vice-president of regulatory affairs and registrar at the Human Resources Professionals Association in Toronto. He can be reached at cbalthazard@hrpa.ca.

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