Definition - Organizational Development (OrgDev / OD)

Organizational Development is an effort that focuses on improving the organization’s capability through the alignment of strategy, structure, people, rewards, metrics, and management systems.

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It is a science-backed, interdisciplinary field rooted in many other fields including:

  • Psychology
  • Culture
  • Innovation
  • Social Sciences
  • Adult Education
  • Human Resources (HR) Management
  • Change Management
  • Organizational Behavior
  • Research, Analysis, and Design

Building projects is what construction contractors do. This is foundational for all contractors. At the earlier stages of growth, the building of projects is the majority of building the business. As a contractor continues to grow and look further into the future at sustainability and succession, the science and application of organizational development becomes as important as the building of projects. 

Organizational development closes the gap between the strategic direction and high-level targets and the current operational capabilities and capacity. 

Organizational development is even more critical for contractors given talent shortages across the industry. 


 

EXAMPLE

ABC Construction allocates $0.25 for every field hour worked towards a wide range of programs to generate interest in the construction industry for kids from elementary school through middle and high school ages to ensure their workforce. 

Note - This is only an example and may seem very expensive with uncertain outcomes. What this must be weighed against is the probability and costs of:

  1. The cost of poor production on a project. How many overruns on hours or labor budgets over the last year have you had due to inexperience and lack of options due to labor shortages? 
  2. The safety risk for new people working on jobsites with zero prior exposure. 
  3. The lost opportunity cost of not being able to pursue a project due to talent shortages.

 

Also see some of the benchmarks around organizational development including salary surveys along with resources from the Association for Talent Development (ATD).


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