Organisational Development Strategy versus Business Strategy



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Strategy > Forum > Organisational Development Strategy versus Business Strategy

Organisational Development Strategy versus Business Strategy
Mapule Masemola-Ralehika, Manager, United Kingdom, Member
Hi, please help, I'm struggling to understand the difference between an Organisational Development Strategy and a Business Strategy. How do they differ and how do they link?

Business Strategy and Organisational Development Strategy
Jaap de Jonge, Editor, Netherlands
I would say the OD Strategy is typically part of your business strategy. In other words, to achieve certain business goals that have been formulated in your BS, probably organizational changes could be required.
For example suppose a strategy of some English company would be to expand to France, then an organizational development strategy could be to open an office in Paris, hiring a general manager who then recruits some other key personnel, etc.
Also your question reminds me of the saying "Structure follows strategy".

Re: OD Intervention Strategy versus Business Strategy
Mapule Masemola-Ralehika, Manager, United Kingdom, Member
Oh thank you. That makes sense. In other words, you can't work on the OD intervention strategy by ignoring the business strategy.

OD Strategy versus Business Strategy
Ceferino Dulay, Jr., Philippines, Member
It seems the question is what drives what?
- In some cases, an appropriate OD strategy is formulated to support a business strategy.
- In other cases, an OD strategy intended for some other purposes can support or enhance an existing business strategy.
What is important to consider is the possible benefit of one to the other which means that in formulating an OD strategy, its impact on existing or new business strategies should be examined. Likewise, when formulating a new business strategy, its impact or requirements on the present organization must be considered.
In short, a holistic analysis needs to be done with every change, whether it is OD, Business, or other areas.

OD Strategy & Business Strategy
CESAR ARECHIGA , Management Consultant, Mexico, Member
Mapule, I want to share with you my understanding of the subject: OD Strategy has to do with the top management decision of growing or expanding the actual business (whether products or markets) and/or the opening of a new line of business.
Business Strategy has to do with how the expansion is to be implemented.

OD Strategy and Business Strategy
Paul S Phillips, Management Consultant, United Kingdom, Member
It struck me when looking at @Ceferino Dulay, Jr.: 's answer that at the core is being clear of the effect of each on the other.
I see OD strategy as simply setting the path for planned change, with business strategy focused on those outcomes that determine growth. Therefore in determining the 'how' of both, the use of tools and techniques that analyse the impact of strategic decisions and change are necessary, such as solution effect analysis.
So often organisations make the mistake of creating strategy departments that lay outside the day-to-day running of the business and determine strategies in isolation; failing to evaluate sufficiently the ripple effects of the strategic changes they recommend. The rest of the organisation waits, like believers at the Vatican, for smoke to rise from the hallowed chambers and then are expected to implement something they have not been engaged in.

Organization Development Strategy Without a Business Strategy
Ranjeet Menon, Project Manager, India, Member
Business strategy is a very broad term. Business strategy can be for business development, business improvement or business transformation. A strategy for organization development can come under the strategy for business improvement or business transformation.
You can also have an organization development strategy devoid of a business strategy. Consider that your organization has become bulky especially at the middle management and at the base of the organization pyramid. For every 10 employees added, a HR person has to be added as well. You can trim down the middle management and there will be jobs where employees can be replaced with external consultants. This will reduce the size of HR team as well. See the financial benefit. Financial strategy overrides every other strategy in any organization. Any strategy will have financial costs & financial benefits associated with it, the aim of any strategy is always to reduce costs & increase benefits.

Organization Development Strategy Without a Business Strategy
Ceferino Dulay, Jr., Philippines, Member
@Ranjeet Menon: The aim of any strategy is always to increase the bottom-line or benefits, for example through cost reduction, expanding market base, even to the point of increasing costs such as new market development or capacity expansion when these are expected to later improve the bottom-line.
Organization development is no exception, for example better trained manpower to improve productivity or for more agility in entering new markets or in using more efficient technology.
The immediate financial result is an important indicator, but there are companies that can wait for even greater benefits in the long term as part of their strategic business plan.

Business Strategy and Organisational Development
Andrew Blaine, Business Consultant, South Africa, Member
Business strategy normally involves consideration of those factors that nurture and permit growth of a business.
For the successful consideration of these factors, it is necessary that the organisation of the business remains in the forefront of the mind. As the business strategy develops, the business must grow to meet the new challenges. This ever-changing situation will affect the fundamental organisational structure of the business, which must be changed to meet the new challenges created by the growing business - Organisational Development? I hope this makes sense to you?

Business Strategy and Organizational Development
Ceferino Dulay, Jr., Philippines, Member
The business strategic plan needs to consider BOTH the direction of the business AND the organization that will implement the strategic plan. One cannot wait for the other. Continuous growth is supported by both rather than one pulling the other.
Of course there are situations where one can hamper the other, so that the effect of both need to be monitored and sharpened as progress is made.
It is not easy to know in advance the impact of each area so the business and organizational structure need to be closely monitored, modified as needed and the result examined so that the direction of the next step is better planned.
For example, being involved also in business strategic planning, I translated the target into strategic technology areas together with the needed development programs for technical specialists in these technology areas. In this way there is always an alignment of both development areas.

Business Strategy Plan and Developing the Organization
Andrew Blaine, Business Consultant, South Africa, Member
@Ceferino Dulay, Jr.: While I agree with your contribution, I would add that formulating a business strategy is rather like climbing a ladder, with each component making up one step. If you choose to skip one step, getting to the next becomes difficult, but not impossible. If, however, one step is faulty (and breaks) it can easily lead to destruction and failure of the whole business! Hope this helps?

Business Strategy Plan and Developing the Organization
Ceferino Dulay, Jr., Philippines, Member
@Andrew Blaine: I like your analogy of climbing a ladder and the danger of a faulty step. This is precisely why the formulated business strategy is not to be taken as a "Bible" but as a plan or guide. Meaning, the progress and the next step is continuously evaluated and the progress made so far is used to check the original plan so that changes can be made if needed. This means that the original strategy is continuously sharpened as more data/experience are gathered and the resulting "improved" strategy will then be used as basis for sharpening the organization.

Business versus Organisational Development Strategy
Moses Mutethia Muriungi, Strategy Consultant, Kenya, Member
@Paul S Phillips: I concur with your observation; many a times organizations concentrate too much on the bigger picture (Business Strategy) of the firm, engage stakeholders in product and services launches in a big way, while neglecting the OD strategy aspects. This could be a good recipe for failure. Instead, the whole organization has to be strategically aligned with the NEW change expected in the firm. Both BS and OD should be considered hand in hand while implementing them. Key area of focus being a collaborative approach by all levels of workforce towards implementing the strategies.

Why the Organisational Development Strategy is Important
Victor Isaac Olutade Olowo, Consultant, Nigeria, Member
@Moses Mutethia Muriungi: I completely agree with your submission, you have actually hit the the vital point. I believe all segments of the organization should be in the know of what the organizational direction is. I call this: "Total buy-in of all".

Organisational Development VS Business Strategy
Essam Binzghayo, Consultant, United Kingdom, Member
The Organisational Development Strategy (ODS) is part of business strategy, NOT VICE VERSA.
The real meaning of an ODS is to answer the substantial question "How is the company going to improve its internal components?" (examples of that are activities, technologies, employee skills and offices).

Whereas, the Business Strategy is answering the even bigger question "Where do we want to be among our competitors? And How can we get there?"
To simplify the meaning of "business strategy", let's take an example, "We want to be the cheapest seller of iPhone in the market", "We want to be one of biggest five training centers in London... etc". How to do this?
Both ODS and BS tell us How (via high-level changes and tactics) that will be transformed into many projects and in different areas.
The difference is in the scope of focus only.


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