Savall, Henri: Connecting the Dots Between Organization Development and Economic Performance

Since the early 1970s, Henri Savall has developed the Socio-Economic Approach to Management. This approach consists of enhancing compatibility between social and economic performance by bringing an economic element to the process of organizational development and change. In his work with colleagues from the Iseor research center, he demonstrated the importance of uncovering huge amounts of hidden costs to spur organizational development processes that enable the conversion of hidden costs into both immediate results and the creation of potential. These hidden costs stem from organizational diseases, called dysfunctions, which resort to the lack of appropriate organizational development processes. Hidden costs can be categorized in six domains: working conditions, work organization, communication-coordination-cooperation, time management, integrated training, and implementation of the strategy. Economic balance of socio-economic projects implemented in many organizations over almost four decades have demonstrated that hidden costs can be converted into value added through socio-economic management tools. Converting hidden costs into value added enables high rates of return on investments, which is different from traditional business approaches where investments do not consider organizational development and human potential.