What Is Organizational Development?

Organizational development is the steps and processes that organizations need to take to develop and improve. You can use science-based research to work on your organization's strategy, management processes, metrics, structure, or other issues.

The process looks at significant changes that need to be implemented for structural changes, not small, everyday changes to the daily workflow within an organization. You should review how to change company culture to increase success, build better communications within your organization, improve products and services for your customers, or increase your profit to achieve monetary success.

An organization’s human resources department implements organizational development, or the process starts using outside consultants hired by an organization.

When to use organizational development

Organizations, such as companies, government agencies, and others, can utilize organizational development if they need to make changes that can affect the major issues for the organization. Use organizational development with science-based data in situations to find solutions for issues within your organization using evidence-based research.

You may find that your organization isn’t keeping up with market trends and needs a new path to success. Perhaps you want different ideas to retain talent in your organization or attract new employees. You might also have to identify different parts of your organization that need a boost and develop a plan to increase productivity while working within your company's framework.

Read more: 8 Benefits of Employee Development for Your Business

Five steps of organizational development

Organizational development can give your company a framework when moving forward with a plan to implement new ideas. Here are five steps to organizational development that can help you move within the process to achieve success based on your needs and goals for individuals, groups, or the entire organization.

1. Recognition

In your first step, you’ll need to evaluate and recognize the issue to address. You may have noticed repeated customer complaints about the same issue and decided you should focus on identifying and solving the problem to reduce those complaints. You might recognize the departure of employees and consider tackling ways to retain talent. Or perhaps your balance sheet brings up issues with your profits, and you want to know how to get your organization back on track.

2. Diagnoses

You need to take a scientific-based diagnostic review of your organization to find data and other information that can shed light on the issue. This data collection can help you understand how your organization works, how a particular department or group operates, and how different internal and external forces can affect the everyday work or long-term goals of that part of your company. Consider it a fact-finding process to get a solid foundation that you can work from when planning responses or changes in your organization.

3. Intervention

Create plans to implement once you’ve identified and diagnosed an issue. It’s important to consider which areas you want to focus actions toward to target changes, methods that are the most effective, and goals for success based on those methods. You also need to ensure your intervention methods align with each particular individual or group within an organization so the implementation can run smoothly with all groups. This step also requires good communication skills to ensure all stakeholders understand how the intervention should work.

4. Implementation and feedback

Your plan is put in place, and you have to observe how it’s working within the framework of your organization. You can change parts of your plan based on feedback from workers, putting these new options in place to address problems in the process or adding steps to make the plan more successful.

5. Termination and exit

Your plan has been successfully implemented and has become a part of the organization. However, it’s still important to ask stakeholders for their input on the plan, its implementation, and how they expect to keep it in the system for continued success.

This feedback is important to confirm the success of a new process, and the information is also used in a final report or evaluation for your organization. What succeeded and what didn’t should be included in the final report for future reference. You should look forward to the next steps your organization can take to ensure the work continues in the future or what type of adaptations could be made to adjust to changing market conditions.

Who needs organizational development?

Three types of groups need intervention depending on the needs or issues faced by your organization. These types are:

• Individual: You may take an individual approach when coaching or mentoring employees. These approaches relate to what your organization needs to do successfully to bring new employees on board or help employees navigate their exit from your organization. Individual attention is also important for struggling workers or those needing additional intervention.

• Group: A group intervention is for a branch or team within your organization. You can tailor organizational development to the sales department if revenue has declined or work with product development on how to create products more efficiently. In these cases, you can work on this intervention as part of a management-level position within your company or hire outside consultants.

• Organizational: There may be systemic issues affecting all levels and branches of your company that must be addressed. You can focus on this level to create a mission statement, organize a wellness program for employees, or develop new systems for all parts of your organization.

Getting started with Coursera

Expand your understanding of organizational development with courses and Specializations on Coursera.

The University of Virginia offers a Business Strategy Specialization covering ways to evaluate industry changes and how to build advantages by working with organizational strategy.

You can also explore a Business Analytics Specialization through the Wharton School of Business. The program can help you learn how to use data to make strategic decisions when developing business recommendations. The course includes decision-making targeting different areas, such as marketing, finance, and operations.