Organizational Development Needs to Move “Beyond the Organization”

One of the best thinkers on organizational development (OD) that I have encountered recently is Christopher Worley of the University of Southern California.  He is a senior research scientist at the university’s Center for Organizational Effectiveness.  Worley was one of the keynote speakers at the OD Network 2011 Conference in Baltimore.  At the conference, he talked about the need for OD to change if it was going to remain relevant in the 21st century.

Three Management Resets

His key idea is that there have been three management resets over the last two hundred years during which changes in technology, market demand, and organizational capacity required a significant realignment.  According to Worley, we are currently in the third reset.  It is a period marked by rapid changes in technology (e.g., sources of energy, access to information, support for creative work) and market demands (e.g., increased uncertainty, the search for sustainable economic returns, ecological health, and corporate integrity).  All these external forces require a different organizational capacity than most company currently possess.

The Role of Organizational Development in the Third Reset

The third reset requires companies to think about themselves not as single, autonomous entities but as part of a wider system.  Few, if any, companies can hope to tame the highly uncertain and continuously turbulent environment all by themselves.  Instead, forward thinking companies are forming inter-organizational alliances in order to gain some level of influence over their environment.  Gone are the days of a single “heroic” company.  Instead, the current reset puts a premium on “clusters,” “packs,” and “tribes” of companies working in a coordinated matter to strategically support and grow together.

As a result, OD and change management (CM) professionals need to move beyond a focus on managing internal company interfaces, processes, and talent as we did in the second management reset.  In the third management reset, our efforts should be directed to helping our companies and clients manage the interfaces between organizations, coordinate processes across partners, and mobilize the talent of allied companies.  Moving beyond our own organization’s “borders” and working in alliance structures is where OD and CM can contribute significantly more value.

Moving Up the Value Chain

Does this mean that our past work of managing internal company interfaces, processes, and talent is not longer relevant?  The answer to that question is a resounding, “No!”  After all, no company wants an ally who does not have effective internal interfaces, efficient processes, and engaged talent.  However, this inward-looking perspective is the equivalent of “navel gazing” in the current environment.  OD within a company is the new “low hanging fruit.”  Instead, OD and CM professionals need to move up the value chain and seek to create inter-organizational effectiveness in order to truly add more lasting and sustainable financial and social value.  Ironically, as a profession, we have often worked hard to help people and companies move up this value chain.  It is now time to swallow some of our own medicine.

Bottom Line:  OD is important and in order to remain relevant in the 21st century must focus more on building alliances that proactively help all its member companies to adapt to rapid, incessant, and unpredictable change.