Back in 1998, while much of the world was preparing to welcome the new millenium, organizations were grappling with an epic task.
Because computer programs were designed to abbreviate years in two digits, the dawn of 2000 meant that systems would incorrectly interpret the year as 1900 instead, resulting, it was feared, in large-scale shutdowns and mass pandemonium.
As Mary Hessler, an organizational development consultant, wrote in the Tampa Bay Business Journal at the time, the arrival of Y2K had the potential to sew unprecedented chaos — unless organizations were willing to step outside the status quo and work together:
“To solve a systems issue, all stakeholders must participate. We must all be engaged in a new collaborative relationship,” she wrote. “As Steve Forbes puts it, ‘this (Y2K) is not a technology crisis; it is a leadership crisis.’ Now is the time for all those in leadership roles to get involved. This is a call to action.”
To do this, Hessler emphasized the need for acknowledging interconnectivity among stakeholders. “Secrecy needs to be replaced by disclosure,” she wrote.
Midnight on January 1, 2000 came and went largely without incident. That’s because businesses did, in fact, heed Hessler’s call to action, with help from the Year 2000 Information and Readiness Disclosure Act that encouraged organizations to freely exchange strategies, products and best practices.
What happened at the dawn of the new millennium was an example of organizational development at its finest, with leaders across sectors rethinking their usual practices in a big way. Even though the specific events of Y2K won’t happen again, there are plenty of other reasons to incorporate this way of thinking into your business.
What is organizational development?
I learned about organizational development (OD) myself only recently — and I’m glad I did. The best way to think about it is the process by which an organization transforms on a macro-level — think Larry Page’s decision to break Google up into separate entities to form Alphabet, or Walmart’s digital transformation. In approaching Y2K, businesses deviated from the norm in pursuit of achieving a common goal.
The theory behind OD has been around since the 1930s, when research from psychologist Kurt Lewin found that organizational structures and processes influence employee behavior. More recently, Richard Beckhard wrote that OD initiatives should be managed from the top and implemented across the company “through alignment of strategy, structure, management processes, people, and rewards and metrics.” In less jargon-y terms, it’s the art and science of change.
According to the Association for Talent Development, there are five phases of OD strategy:
Entry: Explore the problem, opportunities, or situation.
Diagnosis: Gather, analyze and review data.
Feedback: Explore information to assess understanding, clarity and accuracy. Develop an action plan that outlines change solutions and defined success indicators based on data and analysis.
Solution: Implement courses or curriculums that correct the problem, close the gaps, enhance performance or help seize opportunities.
Evaluation: Collect data to determine if the initiative is meeting goals and achieving defined success indicators. Make recommendations for continuous improvement.
How this will look varies dramatically across organizations. And that’s the point. There’s no one size fits all to OD.
How to make OD work for you
To the success-hungry founder, the theory of OD can look great on paper. But bear in mind there are potential hazards to keep an eye out for.
Fear of the unknown:
Change can be scary, and employees might be concerned about wading into uncharted territory.
To mitigate these fears, Kazoo CEO Paul Pellman says that collaboration is key. “The management of it shouldn’t be siloed in leadership,” he tells Forbes. “The biggest mistake I often see in change management is that company leaders often fail to involve managers in the process to embrace, promote and facilitate the changes that need to happen.”
Collaboration shouldn’t end with management, either — employees need to be kept in the loop and asked for feedback at every step along the way. “Without checking in with workers on a regular basis, how do companies know they are successfully implementing the changes?” Pellman asks. “Plus, asking for regular feedback increases transparency and gives employees a voice in the change — allowing them to feel that they’re truly apart of the process.”
Lack of understanding planned changes:
If change is rolled out in a strategic or haphazard way, it can cause employees to get nervous or lose faith in the process.
Following the five phases of OD strategy can help create a roadmap and reduce the odds of sudden changes to expectations. Depending on your organization, it can also pay to bring on a professional to help lead the way.
My company, Jotform, has recently hired its first Head of Organizational Development to facilitate our growth. Because our priority is giving employees the resources to carry out our strategic goals, this means dramatically expanding our educational offerings. Rather than attending trainings and conferences on an ad hoc basis, as we did before, our new OD guru is going to help build education, coaching and mentorship into our company culture.
Difficulty changing the mission or values:
In times of change, some employees may feel that new initiatives don’t align with the company’s mission, which may cause resistance.
As always, transparency is crucial. Draw a clear line between the new initiatives and the overall mission, and make sure to emphasize the connection in everyday communication. Not only does this encourage big-picture thinking for employees, it also helps clarify your own long-term strategy and purpose. And if the changes don’t align with your company’s mission, it’s important to know why you’re implementing them, and communicate that to your team.
To the uninitiated, OD can look a lot like human resources. But they’re actually very different. While HR’s mission is to provide management and support within the organization, OD is based around assessing the entire organizational structure and moving it toward achieving its purpose and goals. This often involves practices like training and other HR interventions, but its scope is much greater.
Even if you’re not ready to create a formal OD program, you can still absorb its lessons. After all, a readiness to embrace change and meet new demands are some of the most important qualities an entrepreneur can have.