What is Organisational Development (OD)?

What is Organisational Development (OD)?

In today’s fast-paced, ever-evolving business landscape, organisations need more than operational efficiency to thrive. They need agility, alignment, and a deep understanding of how to evolve in response to internal and external demands. This is where Organisational Development (OD) (or Organization Development for our overseas readers) comes into play.

But what is OD? What does it look like in practice, and how does it differ from HR or Learning & Development? Let’s explore this critical discipline, drawing on expert insight and practical guidance to understand why OD is not just helpful but essential for sustainable success.

Defining Organisational Development

There are various definitions of OD, depending on your source. For example, the CIPD defines Organisational Development as:

“A planned and systematic approach to enabling sustained organisational performance through the involvement of its people.”

Meanwhile, Roffey Park Institute describes it as:

“The work of facilitating organisational success by aligning structural, cultural and strategic realities of work to respond to the needs of an ever-evolving business climate.”

Both definitions emphasise planning, change, and people. But perhaps a more straightforward way to understand OD is this:

Organisational Development is the process of continuous improvement, evolving, adapting, or improving an organisation in alignment with its strategic goals.

It’s about using behavioural science knowledge to design interventions that support a business in achieving its mission by enabling people, structures, systems, and cultures to perform at their best.

Why Is OD Important?

Many of us working in HR or L&D have heard the call to “be more strategic.” But how do we achieve this in a meaningful way? OD provides that bridge between day-to-day operational activity and long-term organisational success.

At its core, OD is about facilitating change. This could mean improving internal processes, shifting organisational culture, or developing people capabilities that align with new business challenges. When embedded properly, OD becomes the guiding framework for everything an organisation does: from recruitment to management development, talent planning to performance management.

In practical terms, it means we:

• Recruit people with the skills our future organisation needs
• Design learning strategies that support strategic direction
• Drive cultural and behavioural change aligned with values
• Enhance performance and productivity across the business

And most importantly, OD helps to join the dots between these activities.

Examples of OD in Practice

OD is often confused with HR or L&D functions, but while these disciplines are vital, OD takes a broader, more integrated view.

Here are a few examples of what might fall under the OD umbrella:

• Restructuring teams or departments to improve alignment with strategic goals
• Introducing new behavioural frameworks to support culture change
• Facilitating large-scale change initiatives, such as digital transformation
• Applying behavioural science to improve employee engagement and productivity
• Creating a long-term skills development roadmap based on future business needs

Take, for instance, a company facing disruption due to AI. An OD approach would involve not just upskilling staff but redefining roles, and embedding new mindsets to ensure the organisation is truly future-ready.

OD as a Process, Not a Project

One of the most important distinctions to understand is that OD is not a one-off event. It is a continuous, iterative process. Unlike change management, which often centres on specific, time-bound initiatives, OD is about building long-term organisational capability.

Rather than implementing change and moving on, OD practitioners work across the organisation to foster adaptability, build resilience, and align systems and structures in a sustainable way.

The Five Steps to Building an OD Strategy

So how do you go about building an OD strategy? While every organisation will have different needs, a structured approach is essential. Here’s a five-step model to guide your analysis:

1. Assess Organisational Needs

Start with a clear diagnosis of your current state. This might involve:

• Group processes like focus groups and staff surveys
• Performance and employee engagement data
• Appreciative inquiry or facilitation of world cafés

The goal is to understand the gaps between where you are now and where you need to be. Without this foundation, any intervention risks being misaligned or ineffective.

2. Set Clear, Measurable Goals

Once you’ve identified your gaps, define the “to-be” state. What does success look like? How will you measure it?

For example, if your business is struggling to compete in a market disrupted by new technology, your goal might be to transform your workforce capabilities over three years. Organisation Development objectives might include:

• Introducing a company-wide digital skills innovation programme
• Recruiting key digital talent
• Improved principles around induction or upskilling new starters

3. Design Your Interventions

Now comes the creative part: designing the levers that will move the organisation development towards your goal. There are many forms but these could include:

• Management development programmes
• New performance management systems
• Ongoing employee experience initiatives

The key here is alignment and communication. Every intervention should support your strategic direction. If you’re unsure whether a programme is worth investing in, ask yourself: Does this support where we’re trying to go as a business?

4. Implement the Plan

Implementation should be phased, with clear milestones. OD isn’t about quick wins – it’s about laying the foundation for long-term change.

That said, be prepared to adapt. Contexts shift, and our OD plans must be flexible enough to evolve. Regular feedback loops, stakeholder engagement, and change readiness assessments can help keep things on track.

5. Evaluate and Adjust

Finally, review your progress regularly. Use a combination of qualitative and quantitative measures to assess impact. And don’t be afraid to tweak your approach if something isn’t working.

Remember, OD is a journey. What matters is that your strategy remains relevant, responsive, and aligned with your broader business objectives.

The Burke-Litwin Model: A Useful Diagnostic Tool

If you like models, the Burke-Litwin Model of Organisational Performance and Change is an excellent framework. Developed in 1992, it maps out the complex web of factors that influence organisational effectiveness.

At the top of the model is the external environment – market trends, regulations, economic conditions – all of which influence an organisation’s mission, strategy, leadership and culture.

Beneath that sit the tactical elements:

• Organisational design
• Systems and policies
• Management practices
• Work unit climate

Finally, at the individual level, you consider:

• Task requirements
• Skills and motivation
• Personal values and needs

These layers interact constantly, forming a web of influence. Change in one area – say, your leadership behaviour – ripples across the organisation, impacting culture, engagement, and performance.

OD practitioners use models like Burke-Litwin to map, diagnose, and plan interventions. It helps avoid the common pitfall of treating symptoms rather than causes.

OD vs. HR and L&D: What’s the Difference?

While OD, HR, and L&D are deeply interconnected, they are not the same. Think of OD as the strategic engine. It’s about diagnosing needs, defining direction, and aligning the organisation. HR and L&D are the delivery vehicles. They bring our strategic plan to life through recruitment, development, policies, and practices.

Here are some simplified distinctions:

OD

• Defines future skill requirements
• Develops strategic values and behaviours
• Designs organisational structure and vision
• Facilitates culture change

HR/L&D

• Recruits for those skills
• Embeds and supports those values in the workplace
• Implements contracts, policies, and change procedures
• Delivers coaching and training expertise

That said, both HR and L&D can operate strategically. The difference lies in scope and time horizon. OD typically works across longer timeframes, driving transformation at a broader level.

In Summary: OD is Strategic, Systematic and Human-Centric

Organisational Development is not a buzzword – it’s a crucial function that sits at the heart of sustainable success. It helps organisations adapt, align, and thrive by putting people and the organization at the centre of change.

Whether you’re just starting to explore OD or are looking to deepen your practice, the key is this: always connect your work to where the business is heading. Understand the external pressures, diagnose the internal reality, and design interventions that bring the two into alignment.

Done well, OD not only drives performance – it builds organisations and people practices that are resilient, values-driven, and ready for the future.

Further Resources

If you’d like to learn more about Organisation Development in action, including how to use practical tools like the Balanced Scorecard or case studies on culture change, visit the Actus YouTube channel for more examples with our bite-sized videos and webinars.

More useful resources

Subscribe to the Actus YouTube channel for educational HR videos, including  a 40 second explainer video about ‘How Actus Performance Management Software reporting works?’.

Read more blogs by Lucinda Carney see here.

Listen to ‘The HR Uprising Podcast’ hosted by Lucinda Carney, which has a variety of informative topics in business and HR. Visit the HR Uprising website or download wherever you get your podcasts from (YouTube, Spotify, Apple etc). The HR Uprising Podcast episode The Art Of Demystifying O.D.

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