The Definition of OD in Business

Every industry has jargon and acronyms that are tossed around and used interchangeably, assuming that the actual definitions can be derived from the content of the conversation.

Even if someone understands the difference in terminology, they may not understand the difference in meaning. In a blog post for OrgVue, Rupert Morrison discusses the differences in understanding between two practises commonly referred to as OD. The acronym OD is frequently heard in the world of Organization Design, and the term OD is also used in the world of Organization Development. Organization Development [OD] is not the same as Organization Design [OrgDesign], but both are frequently used interchangeably.

What is the distinction between organisational development and organisational design?
Morrison also mentions in his article that in the Business Transformation industry, there is frequently debate about which comes first in the transformation process, Organization Design or OD (Organization Development). The analogy stated by Naomi Stanford in Morrison's article paints a very clear picture of the difference between Design and Development.

"Organizational design consulting begins with determining what the purpose of the car you are about to design is, for example, is it to cross the desert?" Is the goal to win a Formula One race? Is it going to a party with two adults and three children? Then designing and delivering a vehicle suitable for that purpose.

Organizational development is about keeping that vehicle in the condition required to achieve the goal, such as using the proper fuel, having it serviced on a regular basis, teaching the driver how to drive it to maximise its performance, and so on."

To put organisational design and development into simple business terms, the first step is determining what the business's purpose and function are: this is the Organization Design part. The following step is to decide how to keep the purpose and function: this is the OD, or Organization Development, part.

Now that we know the distinction, how do we distinguish between the two when referring to either? The solutions are straightforward. Organization Development (OD) and Organization Design (OrgDesign) are both critical components of a holistic approach to business transformation.