What is Organizational Development?

May 08 2023 | Perspectives

Organizations need to adapt to changing environments now more than ever. This is where organizational development becomes critical.

What is organizational development?

Organizational development is a method or process used to improve the effectiveness of an organization through initiating change from within.

Some organizational development examples may include focusing on communication, culture, behaviors, structures, and more. When leaders understand how to maximize their organization’s potential through new, innovative strategies, they have the opportunity to take a big step in their growth, development, competitive stance within the market, and much more – and it’s a step worth taking if you ask us.

Organizational development will vary from company to company; however, the basic premise remains constant. The method is there to improve the overall effectiveness and productivity of a company.

Some of the fundamental principles of organizational development include:

  • Maximizing the value of the business

  • Aligning development to the goals, purpose, and long-term vision of the organization

  • Using it as an ongoing method of improvement

The benefits of organizational development

As we’ve mentioned, the benefits of organizational development differ from company to company. However, broadly speaking, organizational development can have huge impacts on business growth and efficiency. Some of the key benefits you’ll find with successful development and change within your organization include:

  • Eliminating weaknesses within the organization

  • Employee growth

  • Business growth

  • Increased revenue

  • Continuous development

Change at work can often be met with opposition, so understanding and championing the benefits is key. Let’s break them down.

Eliminating weaknesses within the organization

With strategies focused on maximizing your organization’s full potential, organizational development is a method that largely focuses on the positives and negatives of your business and how they can be strengthened or rectified.

By continuously identifying and fixing your company’s weaknesses, you start to effectively position yourself as a leader within your industry. How? By improving structures, procedures, policies, and more, you get the very best from your organization.

Employee growth

Of course, organizational development strategies differ from business to business, but it’s likely you’ll need to focus on developing employees if changes are put into place. And why wouldn’t you want to?

Focusing on employee growth not only improves talent within a company, but it can also lead to greater motivation and engagement of your workforce, increased staff retention, and a significant boost in productivity and efficiency.

Business growth

Of course, if your organizational development is successful and employees are continually developing, your business growth is also going to benefit.

Think growth within your market. Think more efficient outputs. Think boosted revenue.

Increased revenue

As a result of higher productivity, better engagement, better efficiency, and business growth, it’s likely you’ll see an increase in your revenue.

Organizational development strategies can also be focused on minimizing ‘waste’ within the company, like scrapping policies and procedures that are inefficient financially. If building revenue is a long-term goal, think about financially wasteful procedures when you’re planning your organizational development strategy.

Continuous development

As we’ve mentioned already, organizational development isn’t just a one-time, short-term method of change. It is the continual improvement of your business, where you should constantly be evaluating your previous learnings and implementing new solutions to better your organization even further.

How to achieve organizational development

Organizational development can be achieved through five simple steps that can lead to powerful changes:

  1. Entry

  2. Diagnosis

  3. Feedback

  4. Solution

  5. Evaluation


The entry phase of organizational development is the initial identification of sub-optimal organizational structures, processes, and more. During it, you recognize where change is needed and what can be done to maximize your organizational efficiency.


The next step to achieving organizational development is gathering data. This is where you find the information from within your company and diagnose the problems that currently exist. Not only is this evidence for moving towards organizational change and development for clients or senior leaders in the business, but it also helps to identify a plan of action towards fixing them.


Once you’ve collated your data and have an idea of what needs to change to maximize the organizational performance, getting analysis and feedback from the client or key senior stakeholders in the business is vital in shaping your organizational development plans.

Not only will this give you additional ideas and informed information to advise on your solutions, but it’s the time to get these seniors on-side. Without the backing of these key stakeholders, change and development is incredibly hard to achieve.


The next step to achieving organizational development is outlining your set of solutions designed to correct your organization’s issues and set in motion change and development for your company.


The evaluation stage of organizational development is the assessment process after implementations have occurred. This is an ongoing evaluation to see what worked, what didn’t work, and what else needs to change to maximize the organization’s productivity and performance.

How to improve your organizational development process

Like with any organizational change, to make organizational development at your company the best it can be, there are improvements to the process that can be made. Some of these improvements include:

  • Getting employees involved in making decisions.

  • Encouraging employee feedback.

  • Building a culture of trust and transparency within the workplace.

  • Focusing on individual groups and departments.

  • Investing in coaching for change.

Getting employees involved in making decisions

By getting employees to help in decision-making and forming your workforce development strategies, not only do you receive informed ideas from your workforce on what works and what doesn’t, but you also start to instill a sense of belonging within employees. This is likely to lead to less opposition to change, whilst by increasing the feeling of ‘need’ within employees you’ll boost engagement and productivity. And this engagement is key for business growth; 90% of businesses say engagement impacts on business success. What’s more, according to a study by Gallup, engaged teams show 21% greater profitability than those less engaged.

Encouraging employee feedback

If having employees involved in decision-making is unachievable, then getting employee feedback on new proposed processes, structures, and changes within a company is vital. This way, once again, you get informed decisions from those working within the organization, whilst actively listening to your workforce and giving them a position to query decisions, upholding accountability.

Building a culture of trust & transparency within the workplace

By creating an open and honest flow of communication at work, and developing a culture of trust and transparency, you’ll find it far easier to develop and implement change with the support of your workforce.

Focus on individual teams & departments

When looking to organizational development, remember: don’t only focus on individual leaders. Equally, don’t just look broadly at the organization as a whole. Look at teams and departments and identify problems throughout the organization – they’ll be different across teams because they often need to be. So, considering these differences is vital for business success – not one mold fits all.

Invest in coaching for change

Investing in change and transformation coaching can help keep organizational development and change smooth, with experts helping you throughout the journey.

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