Introduction

In an ever evolving world of work, it’s important that organisations adapt to ensure businesses performance. This factsheet explains what organisation development (ODV) is, what areas of focus and expertise it involves, and explores what ODV looks like in practice. 

There are many ways to describe organisation development (ODV), all of which share common features despite their varied meanings. In this factsheet we will use the abbreviation ODV rather than OD to distinguish organisation development from organisation design. 

See the full A-Z list of all CIPD factsheets

Organisations operate in a constantly-changing environment; externally (where markets change, new competitors emerge, and technology evolves) and internally (where people come and go, cultures evolve, and leadership agendas change). Because the of this, organisations often find that the practices they have used historically that used to perform well, no longer work as well as they did - they need adjusting to maximise their impact on the organisation achieving its goals. 

Organisation development uses a systematic approach to drive business performance. It considers elements like organisational culture, capability, values and relationships, taking an ecosystems approach to understanding them and how they influence behaviour and performance. Our definition of ODV from a people profession perspective is ‘a planned and systematic approach to enabling sustained organisational performance through the involvement of its people’. See how ODV fits into our Profession Map.

ODV has developed from various disciplines, meaning ODV approaches and career pathways are wide ranging. Regardless of the approach, ODV has grown to become one of the most critical practices an organisation needs to maintain performance within a rapidly changing environment. ODV specialists play a critical role in working with line leaders and other people professionals to develop the organisation to achieve its goals and enhancing customer and employee experience.

Find out more about the factors that are having an impact on ODV practice, now and in the future, in our thought pieces collection Organisation development – the state of play and beyond.

While ODV can take many forms and focus on different aspects of an organisation, some fundamental principles tend to be present:

  1. Maximising the value gained from the organisation’s resources – for example, in an automated manufacturing plant, the development might focus on mechanical efficiencies, whereas if the organisation produces people services, it might focus on people capabilities.

  2. Aligning to an organisation’s strategy, goals and core purpose – all development is carried out to achieve these things to a greater extent. Development that’s undertaken without such a focus can become incongruent with the rest of the organisation and can cause issues in other areas.

  3. Applying behavioural science knowledge and practice, such as leadership, group dynamics and work design. This ensures that people practices are developed in a way that uses research-based insights and scientific understanding of how and why people behave the way they do.

  4. It is done continuously; ODV is a kind of planned, ongoing, systematic change that aims to institutionalise continual improvement within organisations. ODV is also related to change management  in the sense that many developments would be implemented using change management practices.

Although these points could be seen to apply to almost any HR activity in an organisation, it’s important to recognise ODV activities as slightly different in the sense that they are done for a different reason than day-to-day HR activities or improvements. ODV specialists have expertise in navigating complexity to unpick what the organisation is trying to achieve; diagnose underlying issues, challenges, opportunities; and to select the best approaches to develop the organisation moving forward.

ODV professionals will also need to collaborate with other people professionals, as their work does heavily draw upon and develop many of the processes of HR and/or learning and development processes to bring about the required change. Employees are often at the centre of the changes to the organisation that follow, and people professionals need to have a solid understanding of the relationship between organisation development, organisational strategy and the HR agenda. They should leverage their expertise and knowledge of the organisation to question assumptions, help surface non-obvious problems/issues, diagnose barriers and enablers of execution, and manage change effectively.    

Some areas of ODV, such as managing change, are now considered core knowledge for all people professionals. Listen to our podcast on how people professionals can adopt ODV practices in their workplace, and read our report People Profession in 2030: a collective view of future trends where enabling change and transformation is called out as a key concern for people professionals.

If the range of areas that require development are large, the level of work required is significant, or the interconnectivity of those areas requires a wholesale organisation change, this is where organisation development transcends into organisation design. Organisational design and development are complementary, but distinct, capabilities.

One way to approach ODV is to use organisational metrics and people analytics to identify the ‘fit’ between the organisation’s goals and needs, and the practices that are attempting to fulfil them. So, for example, information from an annual staff survey might indicate that there are engagement issues, which might be having an impact upon absence and performance levels. This might be a trigger to undertake an ODV initiative to review and redesign related practices to improve the connected areas of performance.

However, as well as the ongoing review of organisational effectiveness, there may be a more time-bound trigger for undertaking organisational development activities. With the current pace of change, organisations are having to review their strategy frequently, often altering their course in response to external forces. Read more about the role of organisational development practitioners in leading through the COVID-19 pandemic

The ODV process has various stages including:

  1. Organisation review. To identify what it needs (‘needs analysis’). Uses a range of tools and approaches including:

    • Strategic review.
    • Future state analysis.
    • SWOT.
    • PESTLE.
    • Quantitative performance targets.
    • Target Operating Model.

  2. Diagnose the extent to which those needs are being met. Essentially the same thing as doing a gap analysis to identify the difference between a current position and the desired future position, but using a range of frameworks or diagnostic tools to analyse the situation fully, including:

    • ISO.
    • Lean / Six Sigma.
    • Force Field Analysis.
    • Total Quality Management (TQM).
    • Organisation design frameworks (used as diagnostics), such as McKinsey’s 7S model, the Burke Litwin framework, or the 5 Star model.

  3. What intervention would best fit the gap identified, and whether to design it or buy it in. ODV's multidisciplinary roots means there’re different types available:

    • Human process interventions – coaching, mentoring, training, group work, facilitation, action learning.
    • Techno-structural interventions – Lean / Six Sigma, business process re-engineering (BPR), outsourcing.
    • Human resource interventions – performance management, reward and motivation, employee surveys, psychometrics.
    • Strategic interventions – business planning, cultural change, transformation programmes.

  4. Implement the initiative. It’s always good practice to use robust change management practices, which will include focusing on communication, stakeholder involvement, and evaluation metrics. Our Landing transformational change report covers the thinking in the field of change management and practical action points for change interventions in organisations. It’s complemented by case studies of four organisations applying the approaches in practice. Evaluating the effectiveness of any intervention is also integral to the ODV process.

Contacts

Organization Development Network

NHS Leadership Academy – organisational development

Books and reports

CANNON, J.A. and MCGEE, R. (2016) Organisational development and change. 2nd ed. CIPD toolkit. London: Chartered Institute of Personnel and Development.

CHEUNG-JUDGE, M-Y. and HOLBECHE, L. (2015) Organization development: a practitioner's guide for OD and HR. 2nd ed. London: Kogan Page.

FRANCIS, H., HOLBECHE, L. and REDDINGTON, M. (2012) People and organisational development: a new agenda for organisational effectiveness. London: Chartered Institute of Personnel and Development.

TOSEY, P. (2017) Understanding organisation development. London: Kogan Page.

Visit the CIPD and Kogan Page Bookshop to see all our priced publications currently in print.

Journal articles

ATKINSON, P. (2015) OD strategies: installing a lean and continuous improvement culture. Management Services. Vol 58, No 4, Winter. pp12-17.

AXELROD, R.H., & AXELROD, E.M. (2017). The scholar-practitioner mindset: how texts and experience influence organizational change practice. Academy of Management Review. Vol 42, No 3, pp561-571.

ELLIS, F. (2007) The benefits of partnership for OD and HR. Strategic HR Review. Vol 6, No 4, May/June. pp32-35.

JEFFREY, R. (2020) Why the pandemic has been OD's time to shine. People Management (online) 4 June.

POPER, J. (2018) By development not design. HR Magazine. November. pp20-29.

VAN NISTELROOIJ, A. and SMINIA, H. (2010) Organization development : what's actually happening? Journal of Change Management. Vol 10, No 4, December. pp407-420.

CIPD members can use our online journals to find articles from over 300 journal titles relevant to HR.

Members and People Management subscribers can see articles on the People Management website.

This factsheet was last updated by Melanie Green: Research Adviser, CIPD

Melanie specialises in research on the people profession and good work. Prior to the CIPD, Mel worked as an HR practitioner in a technology organisation, and previously worked as a researcher in an employee engagement and well-being consultancy.


Explore our related content

CIPD Learning Courses

Organisation Development

Discover the fundamentals of Organisation Development, contextualise your challenges and explore a range of Organisation Development approaches to strengthen your practice.

Go to course details
Top