I have been in HR for 21 years, and I have implemented organizational changes at Wargaming, Preply and iDeals. Most of that work was organizational development, even when nobody called it that.
Below: what organizational development is, how it connects with HR, the eight stages of an OD project, how to start one without falling for the wrong problem, which interventions exist, how to evaluate the result, and a free OD readiness check for your first meeting with a sponsor.
What is organizational development?
The definition I teach: organizational development is planned, organization-wide efforts, managed from the top, to improve organizational effectiveness and health through planned interventions in the organization's processes, using behavioral science knowledge. That knowledge comes from organizational behavior, management, psychology, sociology, economics, education and consulting.
Three words in this definition matter most. Planned: OD is not a reaction to a fire, it is a project with a diagnosis and a plan. Organization-wide: even when you work with one team, you look at the system around it. Effectiveness: the main goal of OD is a more effective company, not a new HR program.
OD is also a response to change. It is a broad educational strategy that changes beliefs, attitudes, values and structures, so the organization can adapt to new technologies, markets and challenges, and to the pace of change itself. Leaders call this world VUCA: volatility, uncertainty, complexity and ambiguity.
OD works on three levels of an organization, in the terms of Edgar Schein's culture model:
- Artifacts, norms and behaviors: what you can see, such as how meetings run, who speaks, what gets rewarded.
- Beliefs and values: what people say is important.
- Assumptions: what people take for granted and never discuss. Change that stays on the surface does not last if the assumptions underneath stay the same.
Characteristics of organizational development
You can tell real OD from a one-off initiative by six features. Organizational development:
- aligns with organizational and business goals;
- is rooted in behavioral science;
- is long-term and continuous;
- is oriented toward results;
- is based on collaboration with the people inside the company;
- looks at the organization as a system.
What can OD work with? The field is huge. Projects from my own practice: describing and integrating corporate culture, a total rewards audit and reform, coaching for the management team, an employee option package, automation of HR processes, and building a recruiting and onboarding system.
How is organizational development connected with HR?
In the HR competency model I use, organizational development and design sits next to recruiting, compensation, learning and development, employee experience and change. An HR leader who can diagnose an organization and run a change project is much more valuable to the business than one who only runs processes.
How organizational development works: the eight stages of an OD project
OD runs on models. The fundamental one is action research: study the situation, act, study the result, act again. The same logic sits in the PDCA cycle: plan the improvement, run it as a pilot, check whether the pilot worked, and only then roll it out in full. A model is like a model plane: it shows what the plane is, but it does not fly. Use it as a map, not as a script.
The OD process model I teach has eight stages:
- Entry. The OD specialist and the client meet and decide whether to work together. Readiness for change is assessed, and the terms of cooperation are agreed.
- Start-up. The agreement is reached, and a client-side team is formed to work with the OD specialist.
- Assessment and feedback. Also called diagnosis. Culture, strengths and weaknesses are assessed, and the findings are shared with the people in the organization.
- Action plan. Goals and actions are planned based on the diagnosis.
- Implementation, also called intervention. The plan is put into practice.
- Evaluation. How well did the intervention meet the planned goals?
- Adoption. If the goals were achieved, the change is institutionalized and becomes part of how the company works. If not, this step is skipped. In both cases the cycle starts again.
- Separation. The consultant, internal or external, steps out and transfers their skills to the client organization.
Stage 1: how to start an OD project
The entry is where it is easiest to go wrong. Clients often think they already know the problem and the solution. I call it the presenting problem: "The whole problem is in the marketing department!" When you hear it, do not argue and do not agree. Run a mini-assessment with three kinds of questions: what, how and why. Usually it turns out the presenting problem is not the real one.
Remember that this is someone else's problem, and you study it while building trust. You will not do that by dominating the conversation. Listen 80% of the time, ask smart questions and speak the language of business, not HR.
One technique to copy is the 5 Whys. Ask "why?" until you reach a cause you can act on:
Why is our client unhappy? We did not deliver when we promised.
Why did we miss the deadline? The work took much longer than we thought.
Why did it take so long? We underestimated the complexity.
Why did we underestimate it? We made a quick estimate and did not break the work into steps.
Why? We rushed because of other projects.
Action: revise the procedure for estimating time.
Before you agree to start, answer eight questions about the organization's readiness for change. They are in the tool below. If the answers are weak, it is too early for a contract. An external consultant can even decline a project when the organization shows it is not ready for change.
When the answers are clear, write the consulting plan. It is a short summary of purpose, audience, methods, success criteria, roles and responsibilities, expected results, timeline and commitments. Then agree the contract, verbally or in writing: who does what, what counts as an accepted result, the time frames, what is confidential, and what you deliver: reports, presentations, tools or plans.
At start-up you also build the project infrastructure: where interviews and meetings will happen, which access and software you need, a project plan, a status report, a steering team on the client side, and who will see the assessment results. Top management must agree on that last point before the assessment begins.
Stages 3 and 4: diagnosis and the action plan
Assess the organization with more than one method: observation, interviews, questionnaires and company data. When the methods point in the same direction, you can trust the conclusion. In a large company you do not need to involve everyone: a random sample works, or a focused one, for example the ten best and ten worst salespeople.
To get from symptoms to the root cause, use a fishbone diagram (cause and effect diagram). Write the problem in the head. Brainstorm causes and put each on a main bone; if you do not know where to start, use materials, people, methods, equipment and environment. Add sub-causes two or three levels deep. A main bone is never the root cause itself. Then discuss and vote: each participant gets, for example, three dots to place on the cause they believe is the root.
Then build the action plan:
- Write a clear statement of purpose that everyone on the team understands and agrees with, with a strategy, deliverables and a team leader.
- Brainstorm every step needed to reach the result.
- Vote on the steps and remove those without agreement.
- Put the steps in chronological order.
- Assign an owner and a deadline to each step, and a budget if needed.
- Review the plan at every team meeting.
Stage 5: OD interventions at five levels
If the only tool you have is a hammer, every problem looks like a nail. Choose the intervention from the diagnosis, not from your favorite toolbox. OD interventions work at five levels:
- Individual: coaching, mentoring, self-awareness tests, training, leadership development, 360-degree feedback, job design, job descriptions, a responsibility map, policies, values clarification, conflict management, learning by doing.
- Team: dialogue sessions, team building and team development, meeting facilitation, conflict management, the fishbowl exercise (one group works while another watches and gives feedback), strategic alignment sessions.
- Process: Six Sigma, continuous improvement and total quality management, process reengineering, benchmarking.
- Global: virtual and cross-cultural teams, awareness of cultural differences, cross-cultural learning, international assignments.
- Organizational: organizational design, a company-wide survey, the learning organization, culture change, linking responsibility and reward, succession planning, strategic planning, mission, vision and values, open systems mapping, future search.
Organizational design is one of the biggest interventions. If your diagnosis points to the structure, see my article on organizational restructuring.
Stages 6 to 8: how to evaluate an OD intervention
Companies often skip evaluation. It is hard, it takes time and money, and there is a fear: if evaluation shows no result, the OD team and the project sponsor lose face. Skip it, and you never learn whether to continue, expand or stop. Evaluation also turns OD from something mysterious into numbers that management understands.
Four ways to evaluate, from simple to strong:
- Reuse the assessment tools. Run the same survey or pull the same metrics as at the diagnosis stage and compare. This is easiest if you planned it from the start.
- The Kirkpatrick model: reactions, learning, behavior and organizational results.
- ROI, where all activities and results are converted into money: the gain from the project against its cost.
- A control group: compare a group where the change was made with a group where it was not. It is the strongest method.
A good evaluation meets four criteria: it is aligned with the project goals, it is credible, it leads to action (continue, expand, revise or abandon the solution), and it is worth the effort. Also check the factors around the intervention: was the audience chosen and prepared correctly, did direct managers support applying the change, did people get the tools and time, and was the timing right?
After evaluation comes adoption, when the change becomes part of how the company works. To make a change stick, OD uses change management models such as Kotter's eight steps and Lewin's three phases. I teach them in the Change Management Course.
Internal vs external OD consultant
OD specialists are often called consultants, or troubleshooters for the business. They can be inside the company or hired from outside, and each has strengths.
An internal consultant already knows the organization and its culture, has relationships and trust that speed up cooperation, costs less on a project, and keeps confidential information inside. They also carry more responsibility for the outcome.
An external consultant enters without preconceptions, is often respected by reputation, can speak frankly because they carry less political risk, and people may trust them more with confidential information. It is easier for them to refuse what is unethical, they usually bring broader experience, and the company has no long-term salary obligation.
Whichever you are, an OD consultant differs from a traditional expert consultant. A traditional consultant gives directives, owns the process and the results, and passes little or no skill to the client, which creates dependency. An OD consultant coordinates rather than dictates, works together with the client team, lets the client own the process and results, and transfers skills, so that interdependence turns into the client's independence. That is why separation is the last stage of the process.
What qualification do you need? Experience in the behavioral sciences: HR, organizational behavior or psychology.
Common mistakes in organizational development
- Accepting the presenting problem. "It's marketing" is where the conversation starts, not where it ends.
- A plan that is too general. Success criteria, results and responsibilities are not detailed, and not all parties agree.
- Choosing the intervention before the diagnosis. The hammer looking for a nail.
- Worrying about how to measure before defining what to measure, and mixing process metrics with business outcomes.
- Doing it all yourself. You do not have to be an expert in everything: ask experts in market research or process improvement for help.
- Never leaving. If the company still needs you to run the process a year later, the skills were not transferred.
One exercise for this week: describe three important problems in your company where an OD approach could help, and the hardest obstacle for each.
I teach the whole cycle, from entry and diagnosis through interventions for individuals, teams, processes and the whole company to evaluation and change management, in the Organizational Development Course. It is also part of the Pritula Academy subscription: $1,000 a year, 175+ courses, access for one year.
