What is Organisational Development?

What is Organisational Development?
Last Updated: October 10, 2023

Organizations operate in an ever-changing environment, externally (as markets move, new competitors emerge, and technology evolves) and internally (where people come and go, cultures evolve, and leadership agendas change). As a result, businesses frequently realize that formerly successful approaches no longer work as well as they used to. Organizational development is important in promoting company success. This article will show you all you need to know about organizational development.


What is Organisational Development?

Organizational development (OD) is a process that focuses on aligning strategy, structure, people, rewards, metrics, and management initiatives to improve an organization's capability. It's an interdisciplinary field founded in psychology, culture, innovation, social sciences, adult education, human resource management, change management, organizational behaviour, and research analysis and design, to name a few.

Related: Organizational Development: A Guide for Beginners


From the standpoint of the people profession, OD is defined as "a planned and methodical strategy to enable sustained organizational effectiveness via the participation of its people." it is a long-term, systematic, and continuing process of increasing organizational effectiveness, resolving challenges, and enhancing performance. It also applies an ecosystems approach to analyzing components like organizational culture, capabilities, values, and connections, and how these impact behaviour and performance.


OD has evolved from various fields, hence OD methodologies and career paths are diverse. OD has evolved into one of the most crucial disciplines an organization has to maintain performance in a fast-changing environment, regardless of strategy. OD experts are vital in collaborating with line managers and other human resource professionals to help the organization accomplish its objectives while improving the customer and employee experience.

What are the Characteristics of Organisational Development?


While OD can take numerous shapes and focus on different elements of an organization, there are certain common themes:

  • Focus on maximizing the value generated from an organization's resources — for example, in an automated manufacturing plant, development may focus on mechanical efficiency, but in an organization that provides people services, development may focus on people skills.
  • All development is carried out to a larger level to meet an organization's strategy, goals, and fundamental purpose. Without this emphasis, development might fall out of sync with the rest of the organization and cause problems in other areas.
  • Using knowledge and practice from behavioural science in leadership, group dynamics, and job design. This guarantees that people's practices are created using research-based insights and a scientific understanding of how and why people behave the way they do.
  • Changes to a particular job structure, culture, strategy, and processes through to an entire organization.
  • The improvement of organizational effectiveness by involving members of the organization in understanding the challenge whilst enabling new skills, knowledge, and ways of thinking.
  • Promote high productivity, performance, quality products, financial performance, and continuous improvement.
  • The facilitation of change in a flexible, adaptive, and often participative way.


What Are The Stages of Organisational Development?

This section takes you through the stages of Organisational Development and how you can approach each step.



1. Entering and Contracting

The initial encounter between the consultant and the client during which they present, examine, and identify the issue, opportunity, or situation is referred to as entry. This phase produces an engagement contract or project plan, which creates mutual expectations and basic project scope agreements (such as time, money, and resources).


Some examples are:

  • A recurring trend of consumer complaints.
  • External influences on the organization.
  • Increasing staff absenteeism or turnover.
  • Reduced innovation results in a loss of competitive advantage.
  • Profits or income are down.


After identifying the problem, you will meet with the leader/manager ("client") with whom you will be working to create a collaborative relationship. You will convey and investigate the problem in this stage and make an overall appraisal of the scenario. Then you may decide on the project expectations and scope.


2. Diagnosing

Before you can create the interventions that would fix the problem, you must first understand the present atmosphere of the company and how the system works. You will acquire and arrange relevant data in this phase of the process to examine the underlying problem and identify what measures you should take. Collaboration with stakeholders is required for this study.

You must inform your client/stakeholders of your diagnosis once established. You don't want to overload your viewers by giving them too much information to process. Reduce the amount of time you need to keep their attention by summarizing the feedback. Share any insights that will encourage them to support the necessary adjustment.


3. Intervention and Taking Action

Now that you've studied the matter and informed your customer of your findings, it's time to move on to strategic planning. You'll turn the diagnosis into an action plan with specific actions and intervention strategies for bringing about the necessary change.

Interventions are deliberate activities or occurrences that disrupt the status quo to foster good change. Depending on the company's demands, a range of different strategies are accessible.

Organizational (structural) design, performance management, wellness treatments, and trans-organizational transformation are examples of OD interventions.

Consider the following questions as you plan your interventions:

  • What are the areas where adjustments should be targeted?
  • Should we concentrate on procedures, tasks, or interpersonal relationships?
  • What is the most efficient technique for delivering the intervention?
  • Are there any tools or strategies that you could use?


4. Evaluating and Feedback

  1. Your OD surgery will necessitate thorough monitoring. Once the plan has been executed, it is time to move on to the next evaluation and feedback cycle. At this time, you'll determine if the remedies were effective. Is the necessary change in place? Determine whether activities or interventions should be changed or maintained.
  2. Kirkpatrick's Four Levels of Evaluation is a learning and development approach that may also be used to evaluate OD treatments. Each of the four levels indicates an indicator of effectiveness: Reaction, Learning, Behavior, and Results.


5. Termination/Exit

The change has now been integrated into normal operations, and you have completed the OD process. A mechanism for continuing monitoring will aid in maintaining the introduced modifications. Finish with an efficiency standard strategy to guarantee the transition is long-term.


How do HR and OD Relate?

HR and OD have a reciprocal connection in which they rely on one other to some level. 

Without HR skills, an OD endeavour would be ineffective. HR departments with separate programs that don't link to one another and, more importantly, don't support the company's aims and ambitions have a poor level of credibility and influence.

Many strategic HR initiatives get meaning, purpose, and visibility under the OD umbrella.

If a clear OD strategy exists, the overarching messaging and direction will be incorporated into more mundane HR operations like pay and employee policy.


As a result, the company that better understands HR efforts have greater relevance is easier to convert into line ownership and is generally more acceptable around the executive table.

Human resources have frequently been wrongly equated to organizational development.

Human resources, on the other hand, is concerned with people.

On the other hand, organizational development is concerned with the entire organization.

In other words, human resources is tailored to the person, whereas organizational development is holistic.

OD aims to drive individuals toward change to get better results.


What are Examples of Organisational Development?

Organizational development isn't often acknowledged as such a process, although they are. Improvement is the primary purpose of organizational development. However, various companies define improvement differently. These interventions are only a few ways that organizational development affects an organization's life cycle.


1. For Employees

  • Relationships between individuals, groups, third parties, and internal teams
  • Team Building
  • Interventions in large or small groups
  • Leadership development and mentoring


2. Technical Structure

  • Organizational structure
  • Job Design
  • Role enrichment

3. Human Resources, Human Capital, and People Management

  • Performance Management
  • Talent development and management
  • Workplace diversity and inclusion

 4. Initiatives for Wellness

  • Strategic change management
  • Process modifications
  • Transformational change or restructurings involving many organizations (such as mergers)


On the one hand, the fundamental link between the best business processes and structures and the people who work inside the company is at the core of good organizational development. I hope this article has given you a greater understanding of organizational development. For more information, you can read the following article:​

  1. Organisational Development: The Why and How


Fadzai Danha
This article was written by Fadzai a Consultant at Industrial Psychology Consultants (Pvt) Ltd

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