In the not-for-profit (NFP) world, the concepts of organisational design and organisational development both play key roles in shaping the effectiveness and sustainability of our organisations.
And understanding the differences between these is important for leveraging them to optimise capability within YOUR organisation.
Organisational design encompasses the deliberate structuring of an organisation’s frameworks, processes, and systems (hopefully when the organisation is first established!) to best support the achievement of its vision, mission and purpose.
This involves things such as clarifying the division of labor, the organisational structures and hierarchy, communication channels within the organisation, and decision-making protocols.
The purpose of good organisational design is to truly align the structures within the organisation with the purpose, vision, mission, and values of the organisation, to ensure resources are deployed and activities are undertaken to have the maximum impact with the organisation’s (often-limited) resources.
Organisational development on the other hand, refers to the ongoing work you do to continually improve your organisation’s capacity to adapt, grow, and thrive in response to internal and external changes.
It might include initiatives aimed at building leadership capabilities, fostering a culture of innovation and learning, improving employee engagement, and forging strategic alliances.
Organisational development in NFPs particularly focuses on nurturing the human capital within, fostering a supportive workplace culture where everyone feels valued and heard, in turn enhancing the organisation’s resilience and its ability to navigate complexities and crises in the broader environment in which it operates.
Capability building is the cornerstone of both organisational design and development, and by investing in these sorts of capability building initiatives, NFPs can equip their workforce with the skills, knowledge, and resources necessary to fulfil the organisation’s vision, mission and purpose more effectively and efficiently.
Such initiatives could involve providing personnel with training programs, mentoring, coaching, and creating opportunities for professional development and career progression.
This sort of capability building then enhances the organisation’s capacity to deliver on its purpose, adapt to changing circumstances when needed, and to innovate in response to emerging needs as they arise.
Capability building, and organisational development in particular, really do go hand-in-hand.
As NFPs invest in developing their workforce’s capabilities, they contribute to the overall growth and resilience of the organisation as a whole, and organisational development initiatives create an environment ripe for effective capability building by fostering a culture of continuous learning, collaboration, and innovation.
And when organisations are built by design, they are generally better positioned to achieve their vision, mission, and purpose, and create more meaningful change in their communities from the outset.
Through good planning and aligning of the organisational structure, processes, and systems with the organisational mission, organisations can optimise their resources and enhance their operational efficiency.
For example, if a youth-focused organisation identifies youth leadership as a key priority, it might design its organisational structure to support young people to take on leadership roles within the organisation, and implement programs that foster leadership skills development for the young people it serves.
Building an organisation by design to encompass specific capability measures can also enhance alignment with the expectations of stakeholders and of industry standards.
NFPs often operate in complex environments, with a range of diverse stakeholders who might include beneficiaries, donors, volunteers, regulatory bodies, and so on.
So by incorporating capability measures into the organisational design process, NFPs can better meet the needs and expectations of their stakeholders, build greater trust, and demonstrate greater accountability.
At the end of the day, organisational design and organisational development are equally important components of capability building in not-for-profit organisations.
While organisational design focuses on structuring the organisation to achieve its objectives efficiently, organisational development fosters a culture of learning, innovation, and adaptability.
Capability building influences organisational development by enhancing the workforce’s skills and knowledge, while organisational development creates an enabling environment for effective capability building.
By building organisations by design against capability measures, NFPs can enhance their effectiveness, sustainability, and impact in serving their communities.
If you think I can help your not-for-profit to improve your organisational design and development initiatives, to better support your vision, mission, purpose and values, do get in touch with me at megan@mjbconsulting.net.au, or book in a zoom Discovery Call with me HERE to talk about what you need.
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