What is Organizational Development? A Complete Guide

Organizational development is an often-heard term and a key organizational function. In this complete guide, we will take a closer look at a concept that many have heard of but are unfamiliar with. We will dive into what organizational development is, its goals, examples of common organizational development interventions and techniques, and the OD process. By the end of this guide, you will have a good understanding of what OD is, and the techniques that can be used to improve organizational effectiveness.

Table of contents
What is organizational development? A definition
The goals of organizational development
18 examples of OD interventions
How Human Resources and OD relate
The organizational development process
Organizational development certification

What is organizational development? A definition

Organizational development is a critical and science-based process that helps organizations build their capacity to change and achieve greater effectiveness by developing, improving, and reinforcing strategies, structures, and processes.

There are a few elements in this definition (adapted from Cummings & Worley, 2009) that stand out.

  • Critical and science-based process. OD is an evidence-based and structured process. It is not about trying something out and seeing what happens. It is about using scientific findings as input and creating a structured and controlled process in which assumptions are tested. Lastly, it is about testing if the outcomes reflect the intention of the intervention.
  • Build capacity to change and achieve greater effectiveness. Organizational development is aimed at organizational effectiveness. It, therefore, has a number of (business) outcomes. These can differ between organizations, but usually, they do include financial performance, customer satisfaction, organizational member engagement, and an increased capacity to adapt and renew the organization. These are not always clear-cut. Sometimes it is about building a competitive advantage, in whichever way that is defined. We will explore these outcomes later in this article
  • Developing, improving, and reinforcing strategies, structures, and processes. The last part of our definition states that organizational development applies to changes in strategy, structure, and/or processes. This implies a system-approach, where we focus on an entire organizational system. This can include the full organization, one or more locations, or a single department.

Organizational design has become more crucial over time. Today’s world is characterized by Volatility, Uncertainty, Complexity, and Ambiguity (VUCA). This VUCA world requires new agility from organizations, and organizational development is the means to that end.

Globalization leads to a much bigger interconnectedness and opens up organizations to world-wide opportunities and threads.

On top of that, IT is redefining how traditional business models work, creating innovative companies with the ability to scale their services to a worldwide audience in the timespan of only a few years. Just a year after launching, Facebook hit one million registered users. A few years later, Snapchat hit 10 million active users in its first year. This exposes incumbents to disruption.

Finally, business systems become better at measuring relevant data, changing the way success is measured. On top of that, advanced people analytics can help to further drive organizational outcomes.

Organizational development definition

The goals of organizational development

We already briefly touched on the goals of organizational development. The goals differ per organization. Goals can include increasing profits, profit margins, market share, moral and/or cultural values, and the general adaptability (or agility) of the organization.

If there would be one central goal, it would be increasing the organization’s competitiveness.

Competitiveness is the idea that every organization has unique resources and competencies that help the firms to win in the marketplace. This can be the people (a business leader like Elon Musk, or the Google team), an innovative product (SpaceX), superior service (Four Seasons Hotels), or culture (Zappos). It can also be how reactive the organization is to changing market demands. If you’re the first to capitalize on an opportunity, for instance, it may solidify your revenue in the next five years.

The goal of OD is to develop these aspects, as they can help a business win in the marketplace.

This means that organizational development differs from the incidental change process. OD focuses on building the organization’s ability to assess its current functioning and tweak it to achieve its goals. It is, therefore, a continuous process, whereas change processes are often temporarily.

This also emphasizes the relevance of OD. In this VUCA world, change is becoming a constant factor. OD is an integral approach to ensuring this constant change.

18 examples of OD interventions

Organizational development is not easy. It is a fairly technical field, and so are the interventions. In this section, we will list 18 OD interventions, also called organizational development techniques, that are listed by Cummings and Worley (2009). This is far from an exhaustive list.

Human Process Interventions

Human process interventions are change programs that relate to interpersonal relations, group, and organizational dynamics. These are some of the earliest and best-known interventions used in OD.

1. Individual interventions. These interventions are targeted to the individual, often aimed at improving communication with others. The individual is coached on behaviors that are counter-productive.

2. Group interventions. These interventions are aimed at the process, content, or structure of the group. Process relates to the group’s internal processes. Content relates to what the group works on. Structure relates to recurring methods it uses to reach tasks and deal with external issues. All of these can be improved.

3. Third-party interventions. Third-party interventions are often used when there are conflicts. Not all conflicts are bad, but bad conflicts should be resolved quickly. The third-party intervention helps to control and resolve the conflict. Oftentimes, the third party is the OD consultant.

4. Team building. Team building is the best-known OD intervention. It refers to a range of activities that help groups improve the way they accomplish tasks.

5. Organizational confrontation meeting. The confrontation meeting is aimed at identifying problems, setting priorities and action targets, and begin working on identified problems organization-wide.

6. Intergroup relations interventions. These interventions are aimed at diagnosing and understanding intergroup relations. Similarly, problems are identified, priorities and action targets set, before working on the identified problems.

7. Large-group interventions. These interventions are somewhere between the two above. The aim is to bring a large number of organization members and other stakeholders together to identify and organize members together to identify and resolve organization-wide problems, to design new approaches to structuring and managing the firm, or to propose future directions of the organization. They are often referred to as “open space meetings”, “world cafes”, “future searches”, and “Appreciative Inquiry Summits”.

Technostructural Interventions

Technostructural interventions refer to change programs aimed at the technology and structure of the organization. These are becoming increasingly relevant to today’s rapidly changing markets and technological landscape.

8. Organizational (structural) design. The functional structure of the organization is key in how it will function. We all know the classical hierarchical organizational chart. This is referred to as the functional structure. Other structures are divisional, matrix, process, customer-centric, and network structure. Key activities in structural design are reengineering and downsizing. This involves rethinking the way work is done, preparing the organization, and restructuring it around the new business processes.

9. Total quality management. Total quality management is also known as continuous process improvement, lean, and six-sigma. It grew out of a manufacturing emphasis on quality control and represents a long-term effort to orient all of an organization’s activities around the concept of quality.

10. Work design. Work is done to achieve an outcome. Jobs can be aligned to achieve the most efficient way to achieve this outcome, or alternatively, the employee’s needs and satisfaction can be put front and center. Depending on which approach is chosen, different skills are needed. Designing work in a way that leads to optimum productivity is called work design.

11. Job enrichment. Job enrichment is part of work design. The goal here is to create a job that is interesting and challenging for the person doing it. Examples of factors to be taken into account are skill variety, task identity, autonomy, and feedback.

JDS Diagnostic Profile
A Job Diagnostic Survey (JDS) is part of work design, an Organizational Development Intervention (image based on Cummings & Worley, 2009)

Human Resource Management Interventions

These are organizational development techniques that focus on the way the individual is managed. Many of these are used by the HR department as well.

12. Performance management. Good performance management includes techniques such as goal setting, performance appraisal, and reward systems.

13. Developing talent. This includes talent management practices like coaching & mentoring, career planning, development interventions, and management and leadership development

14. Diversity interventions. Diversity is a source of innovation. This includes age, gender, race, sexual orientation, disabilities, and culture and value orientation. These interventions are aimed at increasing diversity.

15. Wellness interventions. Employee wellness interventions include stress management programs, and employee assistance programs. They address social trends and aim for a healthy work-life balance.

Strategic Change Interventions

These organizational development techniques focus on the change processes that shake the organization to its core. The OD department plays a crucial part in executing on this change.

16. Transformational change. This is a change process that involves changing the basic character of the organization, including how it is structured and the way it operates.

17. Continuous change. Continuous change is an intervention that enables organizations to change themselves continually. A popular example is the learning organization.

18. Transorganizational change. Transorganizational change involves change interventions that move beyond a single organization. This includes mergers, allying, acquisitions, and strategic networking.

As I mentioned, this is not an exhaustive list. Techniques like financial planning, long-range forecasting, integrating technology, manpower planning, and designing appraisal systems can be added, as well as many, many more.

How Human Resources and OD relate

As you’ve seen in the list of organizational development interventions above, there are many OD interventions that relate to Human Resource Management. Policies like performance management, goal setting, appraisal, and talent management practices are all essential to effective organizational development.

Another commonality is that both HRM and OD start at the business strategy – the mission, values, and vision of the organization. Both then go on to define the activities needed to implement that strategy in their respective fields. In addition, many early people analytics initiatives originate from the OD department.

However, where HRM focuses specifically on people practices, OD takes a more holistic approach. Using tools like organizational design, individual and group interventions, work design, and more traditional people interventions, OD can operate at all levels of the organization. These are organizational, group, and individual. However, the focus is always on strategic themes, whereas HR is often a lot more operational.

Sometimes, OD functions are located in the HR function, but not always. Sometimes it’s part of a services department, corporate strategy, or internal consulting. OD techniques are also frequently used by external strategy consultants, who use these tools in change management projects.

What’s clear is that the OD techniques we listed above, are very powerful and that anyone in HR that masters them, will be more effective in their job and can make a real impact on their business.

The organizational development process

The organizational development processes can be divided into seven steps. In this section, we’ll go through these steps one-by-one. Please note that this process is not unlike the people analytics cycle – where a problem is detected, data gathered, analyzed, presented, and new policies implemented.

1. Entering and contracting

The first step starts when a manager or administrator spots an opportunity for improvement. There are different events that can trigger this, including external changes, internal conflicts, complaining customers, loss of profit, a lack of innovation, or high absence or employee turnover. These events are usually symptoms of a deeper problem.

The first stage is about scoping the problem. This is usually done through a meeting between the manager and the OD members. In the case of external OD consultants, this stage is more formal.

2. Diagnostics

In the second phase, diagnostics, the OD practitioner tries to understand a system’s current functioning. They collect information needed to accurately interpret the problem, through surveys, interviews, or by looking at currently available data and try to find the root cause.

According to Cummings & Worley (2009), effective diagnosis provides the systematic knowledge of the organization needed to design appropriate interventions.

There are different models used to run these diagnoses. Below you see three IPO models, with a clear input, a (change) process, and an output. They help to structure different design components of the organizations (note the resemblance to Galbraith’s star model). This model clearly shows different design components that play a role at different organizational levels (i.e. organizational, group, and individual).

Comprehensive model for diagnosing organizational systems
Three comprehensive models for diagnosing organizational systems in OD (Image by Cummings & Worley, 2009)

3. Data collection and analyzing

In the third phase, data is collected and analyzed. Data collection instruments include existing data from work systems, questionnaires, interviews, observations, and ‘fly on the wall’ methods.

Data collection is often time-consuming and critical for the success of a project. Important factors to keep in mind are confidentiality, anonymity, a clear purpose, observer-expectancy bias, and a Hawthorne effect.

Observer bias is the tendency to see what we expect to see. The Hawthorne effect refers to the famous Hawthorne studies where subjects behaved differently purely because they were being observed.

Another effect to keep in mind is a regression to the mean. This refers to the phenomenon that arises when there’s an extreme situation, or outlier, that returns to its normal state. So a consultant would be brought in when things are really bad, with the situation getting less bad simply because time passes by. In this situation, the situation is less likely to go from really bad to even worse, than from really bad to just bad – hence regression to the mean.

4. Feedback

In this phase, it is key for the OD consultant to give information back to the client in a way that’s understandable and action-driven.

Information needs to be relevant, understandable, descriptive, verifiable, timely, limited, significant, comparative, and spur action. Techniques like storytelling and visualization can be used to do this in an effective way.

5. Designing interventions

After providing the client with feedback, an intervention needs to be created. This intervention should fit the needs of the organization and should be based on causal knowledge of outcomes. In addition, the organization needs to be able to absorb the changes effectively.

A major part of the change process is defining success criteria for change. Only when these criteria are well-defined, progress can be measured.

6. Leading and managing change

The next phase is about executing the change intervention. Leading and managing change is hard. Estimations put the failure rate of change between 50-70%. This is a staggering number.

Effective change management revolves around motivating change, creating a vision, developing support, managing the transition, and sustaining momentum. Well-known change models include John Kotter’s eight steps to transforming your organization.

Organizational development

7. Evaluation and institutionalization of change

Once a system has been implemented, opportunities for improvement start to show. Implementing these will lead to a better user and employee experience.

These incremental changes characterize the rapid evolution of technology. Change is becoming a constant factor, which means that it is near impossible to just implement technology and be done with it. Systems evolve and this requires a constant implementation.

Lastly, effective interventions measure their own success and are created in a way that enables comparison between the state of affairs before and after.

Organizational development certification

There are various ways to become an OD consultant but you’ll generally need a bachelor’s degree in, for example, training and development, human resources or instructional design as well as related work experience in, for instance, HR.

Strong candidates should hold an organizational development certification that demonstrates an understanding of the field. Certifications include the skill-oriented Institute of Organizational Development’s Certificate Program (ODCP), the Organization Development Certification program by Illumeo and the Organization Development certification program by the Tata Institute of Social Sciences. Various online HR courses can provide general knowledge of organizational development too but they are not as specialized as the previous certifications are.


And there we are, a full guide on organizational development. Even after reading a 2,700-word article, you’ve still only just scratched the surface. To learn more about organization design, we highly recommend Cummings & Worley’s 2009 book Organizational Development & Change, which can be found here.


What is organizational development?

Organizational development is a critical and science-based process that helps organizations build their capacity to change and achieve greater effectiveness by developing, improving, and reinforcing strategies, structures, and processes.

What is organizational development in HR?

Organizational development in HR involves changes and improvement of the processes and structures that are part of HR’s responsibility. These include processes and systems related to performance management, talent management, diversity, employee wellness, and so on.

What is the goal of organizational development?

The ultimate goal of organizational development is to increase the organization’s competitiveness in order to create a business that wins in the marketplace. This can be done through increasing profits, margins, market share, morale, cultural values, or other sources of competitive advantage.

What is the difference between HR and OD?

There are many OD interventions that relate to HRM. These include performance and talent management interventions. However, where HRM focuses specifically on people practices, OD takes a more holistic approach, looking at individuals, teams, and organizational systems.

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