The Pyramid of Organizational Development

Developing an organization is no easy task. Well, more accurately, developing a successful organization is no easy task. If you are going to take your business toward the kind of success that you envisioned when you first began operations, it is necessary to construct your company in a way that facilitates growth and development.

The Pyramid of Organizational Development

Many companies start out with a poor structure that is unable to take them where they want to go – and they never manage to develop that structure into something that will work for a growing business. With the help of the Pyramid of Organizational Development, you just may be able to avoid that fate.

There are six factors included within this pyramid model, each building on the one below. Before we get into those six factors, we should touch briefly on the ‘foundation’ which has been identified for the pyramid, which is the mission and core strategy of the company.

The foundations of the pyramid

Without starting from a point of a specific mission and set of goals, it will be difficult to make decisions that further the organization moving forward. Once a solid foundation is in place, the company can then begin to work on creating a stable and long-lasting pyramid.

The content below will take a quick look at each of the six factors that are going to come together to form this important pyramid model.

Market

Before an organization can really set about doing business, it has to identify the existence of a market which it can serve. In business, everything starts with a market. There has to be a market of willing buyers that exist in a large enough quantity to sustain the underlying business. You can make a great product, or offer a great service, but it isn’t going to matter if the market is insufficient. Before getting too far into its operation, all businesses need to do careful market research or they will only be wasting time and money.

The Pyramid of Organizational Development

Products and Services

With that market located and defined, it will then be time to design and create the products and/or services which are going to be sold to the market in question. It is important that the process works in this order, and not the other way around. If the products and services are developed fully before the market is identified, those products may not match what the market is demanding. While there will certainly be some ideas for products or services that exist right from the start, it is important to wait to develop those ideas until market research is complete.

Products and Services

Often, an organization will develop by first offering just one or two products to a market to test the waters. If success is experienced, that product or service line may begin to quickly expand, now that the market has proven it is receptive to what is being offered. Of course, success with one or two products doesn’t guarantee success with future ventures, so it is important that the organization continues to monitor the market and offer only goods that are likely to be well-received. Gains achieved in an early period of success can quickly be lost if future ventures are not as lucrative.

Resources Management

As an organization grows, it is going to develop a collection of resources that it has at its disposal. One of the keys to continuing to succeed is using these resources in a way that maximizes their benefit in both the short and long term. These resources can come in a variety of different forms, including financial, physical, and human. A good management team will understand how to best put all of these resources to use in order to maximize the success of the organization.

Operational Systems

Systems are important for any business, but they become especially important as an organization grows. In a small organization the same group of people may handle many of the basic systems and functions. However, as a company grows, that simply won’t be possible anymore. There needs to be a defined set of processes in place in order to allow a company to function properly on a day to day basis.

Operational Systems

These operational systems show up throughout the company, from accounting and shipping to marketing, hiring, and much more. When systems are well-defined and monitored, they can keep the business running smoothly from day to day without interruption.

Management Systems

Every organization needs a strong management team. Management is something that grows along with an organization, as bigger companies have more decisions that need to be made than do smaller businesses. It is imperative that an organization has a management team in place who is capable of making smart decisions in a number of areas.

Management Systems

Specifically, the four crucial areas of management systems are planning, structure, management development, and performance management. If any of these four areas are left behind, there could be trouble waiting down the road.

Corporate Culture

At the top of the pyramid is corporate culture, which is what the company is ‘all about’. What does the company believe in, what does it stand for, and what is it trying to achieve? Obviously, all businesses want to make money, so this point is about more than that. The actions of the people who work within the company are going to be influenced by the overall corporate culture as a whole, so this point is crucial and it should be defined early on in the lifecycle of an organization.

No company can afford to skip over any of the levels of this pyramid while building their operations. It is important to pay close attention to each level to ensure that the organization has all of the systems and functions it needs to continue operating smoothly day after day, year after year. It is not easy to build a quality organization from the ground up, but the rewards can be immense when one is successful in doing so.

Key Points

  • The Pyramid of Organizational Development consists of six factors that research has shown to be the key drivers of financial performance and long-term organizational success.
  • Market: There has to be a market of willing buyers that not only exists, but exists in a large enough quantity to sustain the underlying business.
  • Products and Services: These are appropriate to the organization’s chosen market.
  • Resource Management: This includes the acquisition and development of people, equipment, facilities, and financial resources required for current and future operations.
  • Operational Systems: These are necessary for the organization to function on a day-to-day basis.
  • Management Systems: These include strategic planning, organizational structure, leadership development, and performance management systems.
  • Corporate Culture: The organization’s values, beliefs, and norms that influence the behavior of people in the company.
  • The Pyramid of Organizational Development can be used to identify an organization’s strengths and opportunities to improve.

Free Management eBooks Most Popular

Today's Top Picks for Our Readers:
Recommended by Recommended by NetLine

Free Strategy Skills Resources

See the full list of Strategy Skills eBooks, templates and checklists available for free download right now.


Click Here!