Organizational Development - Thoughts And Observations

“Organizational Development (OD) is a field of research, theory, and practice dedicated to expanding the knowledge and effectiveness of people to accomplish more successful organizational change and performance. … a process of continuous diagnosis, action planning, implementation and evaluation, with the goal of transferring knowledge and skills to organizations to improve their capacity for solving problems and managing future change.” From the University of Pennsylvania Perelman School of Medicine website.

“Every company has two organizational structures: The formal one is written on the charts; the other is the everyday relationship of the men and women in the organization.” Harold S. Geneen - U.S. business executive.

“Collaboration is a key part of the success of any organization, executed through a clearly defined vision and mission and based on transparency and constant communication.”  Dinesh Paliwa – Indian/U.S. business executive, partner at Kohlberg Kravis Roberts & Co. L.P.（KKR）

“Every successful organization has to make the transition from a world defined primarily by repetition to one primarily defined by change. This is the biggest transformation in the structure of how humans work together since the Agricultural Revolution.”  Bill Drayton – U.S. social entrepreneur.

“General trends in 2025 organizational change: 1) Integration of AI and Automation: Many companies are leveraging AI and automation to improve efficiency, enhance customer service through tools like chatbots, and enable data-driven decision-making. 2) Digital Transformation: Organizations are adopting cloud solutions and digital tools to migrate to new systems, improve collaboration, and create more agile business processes. 3) Focus on Sustainability: Some companies are reorganizing to meet sustainability goals, as seen with Honda's focus on electrification to achieve carbon neutrality. 4) Strategic Divestitures and Restructuring: Companies are divesting from older business lines to focus on growth areas ... and are restructuring departments to better align with new strategic goals.” Compiled from various sources by the Google Knowledge Graph Database.

“Organizations are beginning to create the structures and processes that lead to meaningful value from gen AI. While still in early days, companies are redesigning workflows, elevating governance, and mitigating more risks.  Organizations are starting to make organizational changes designed to generate future value from gen AI, and large companies are leading the way. The latest McKinsey Global Survey on AI finds that organizations are beginning to take steps that drive bottom-line impact—for example, redesigning workflows as they deploy gen AI and putting senior leaders in critical roles, such as overseeing AI governance. The findings also show that organizations are working to mitigate a growing set of gen-AI-related risks and are hiring for new AI-related roles while they retrain employees to participate in AI deployment. Companies with at least $500 million in annual revenue are changing more quickly than smaller organizations. Overall, the use of AI—that is, gen AI as well as analytical AI—continues to build momentum: More than three-quarters of respondents now say that their organizations use AI in at least one business function. The use of gen AI in particular is rapidly increasing. Our survey analyses show that a CEO’s oversight of AI governance—that is, the policies, processes, and technology necessary to develop and deploy AI systems responsibly—is one element most correlated with higher self-reported bottom-line impact from an organization’s gen AI use.  That’s particularly true at larger companies, where CEO oversight is the element with the most impact on EBIT attributable to gen AI. Twenty-eight percent of respondents whose organizations use AI report that their CEO is responsible for overseeing AI governance, though the share is smaller at larger organizations with $500 million or more in annual revenues, and 17 percent say AI governance is overseen by their board of directors. In many cases, AI governance is jointly owned: On average, respondents report that two leaders are in charge. The value of AI comes from rewiring how companies run, and the latest survey shows that, out of 25 attributes tested for organizations of all sizes, the redesign of workflows has the biggest effect on an organization’s ability to see EBIT impact from its use of gen AI. Organizations are beginning to reshape their workflows as they deploy gen AI. Twenty-one percent of respondents reporting gen AI use by their organizations say their organizations have fundamentally redesigned at least some workflows.” From the March 12, 2025, McKinsey & Company Survey entitled “The state of AI: How organizations are rewiring to capture value.”

“…Tech leaders are collaborating more closely than ever with human resources and people leaders traditionally responsible for workforce changes. Perhaps no company is a better example of that than biopharmaceutical company Moderna, which actually formally merged its technology and human-resources departments under one leader late last year. ‘If you think about HR, HR has done traditional workforce planning, and they thought about the people…. And the IT and the digital teams are planning for systems,’ said Tracey Franklin, who was appointed to the newly created role of chief people and digital technology officer at Moderna. ‘And we looked at that and said: It’s actually all how work gets done. And so we need to start doing something that we call work planning.’  She said she’s been reworking teams not just around the capabilities and skills of the humans on staff, but also around what can be completed by AI tools.”  From the article “AI Is Turning Traditional Corporate Org Charts Upside Down” posted September 16, 2025, on the The Wall Street Journal by Isabelle Bousquette – U.S. journalist, reporter at The Wall Street Journal; and Steve Rosenbush – U.S. journalist, bureau chief, enterprise technology at The Wall Street Journal.

“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 we define that.  … 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.”  From the Research Gate website. Some of the above concepts adapted from the 2009 analysis by Christopher Worley -  U.S academic, research scientist at the University of Southern California ’s (USC) Center for Effective Organizations and the former director of the Master of Science in Organization Development (MSOD) program at Pepperdine University , author of Integrated Strategic Change; and Thomas G. Cummings – U.S. academic, University of Southern California (USC), Chair of the Department of Management and Organization, and Director of the Leadership Institute.

“All improvement begins with the identification of a problem.”  Mazaaki Imai - Japanese organizational theorist, management consultant, founder of the Kaizen Institute Global .

“In (a June 2025) survey, two reasons emerged as the primary drivers for why executives initiate a redesign: improving efficiency and refocusing on growth. These priorities highlight a dual focus on optimizing current operations while positioning the organization to seize future opportunities.  Other goals include enabling the execution of strategy and increasing organizational agility and speed. While these latter drivers are as important as a decade ago, their relevance today is amplified by the ever-changing business environment. Organizations are no longer simply looking to tweak their structures—they are seeking to build leaner, more adaptable systems that can thrive in the face of uncertainty and disruption. … Operating model redesigns are yielding better results than they did a decade ago. Our 2014 survey respondents said that 51 percent of redesigns were completed and implemented; in 2025, that number rises to 79 percent. Moreover, the findings show that redesigns have been increasingly successful over the past decade: nearly two-thirds, or 63 percent, have met most of their objectives and improved performance. That’s a big jump from ten years ago, when just 21 percent of redesigns led to improved performance.” From the article “The New Rules For Getting Your Operating Model Redesign Right” posted June 25, 2025, on McKinsey & Company by Brooke Weddle – U.S. business consultant, senior partner at McKinsey’s Washington D.C. office; J.R. Maxwell – U.S. business consultant, partner at McKinsey’s Washington D.C. office; Tristan Allen – U.S. business consultant, associate partner at McKinsey’s Washington D.C. office; Elizabeth Mygatt – U.S. business consultant, partner at McKinsey’s Boston office; Olli Salo – Finnish business consultant, partner at McKinsey’s Helsinki office.

“Never has it been more important for leaders to position their organizations strategically for competing successfully in the future. The use of the OD process adds responsibility to the employees and leaders alike, to maintain open communication, and constantly reevaluate the needs of the organization. … In general, organizations that wish to achieve a high degree of organizational change will employ a full range of interventions, including those designed to transform individual and group behavior and attitudes. Typically, organizational development programs will simultaneously integrate more than one of these interventions. Future success may be realized by those who continually build and use knowledge to the fullest extent possible; that may well include external guidance from a knowledgeable consultant skilled in shifting mindsets from the status quo and getting the organization to see through multiple lenses.”  From the article “The Impact of Organizational Development (OD) Methodology on Leadership Training: A More Intentional Consulting Approach” in the Journal of Practical Consulting posted on the Regent University website by Kathleen N. Cabler – U.S. business consultant, talent strategy director at Elevance Health , founder and president of Cabler Consulting Group, LLC (CCG), adjacent professor at Regent University.

“An organization is nothing more than a living embodiment of a strategy. That means its “organizational hardware” (i.e., structures, processes, technologies, and governance) and its “organizational software” (i.e., values, norms, culture, leadership, and employee skills and aspirations) must be designed exclusively in the service of a specific strategy. Research suggests that only 10% of organizations are successful at aligning their strategy with their organization design. Some of the problem is a gross misunderstanding of what the word “alignment” actually means in this context. When it comes to executing strategy, alignment means configuring all of the organization’s assets in the service of your stated strategy and making sure there is no confusion about what each part of the organization does to bring it to life. If you’re embarking on executing your company’s strategy, here are six ways to make sure your organization is designed to do it successfully. … If you want to raise the odds of successfully executing your company’s strategy, invest the time in aligning your organization’s design to embody the strategy. Instead of relying exclusively on the alignment of goals and metrics, broaden your understanding of alignment to include all the components of your organization. Make sure they fit together congruently into a cohesive organization. You’ll signal to your people that you’re serious about the strategy and avoid the cynical eye-rolling that often accompanies the announcement of strategies that everyone knows can’t be executed.”  From the article “Design Your Organization to Match Your Strategy” posted June 6, 2022, on the Harvard Business Review by Ron Carucci – U.S. business consultant, owner and managing partner of Navalent ; and Jarrod Shappell – U.S. business consultant, managing partner at Navalent .

“Because the better an organization is at fulfilling its purpose, the more it attracts people who see the organization as an opportunity to advance themselves.” Robert Shea – U.S. management consultant.

“OD focuses on improving a company's capability through the alignment of strategy, structure, people, rewards, metrics, and management processes. It's a science-backed, interdisciplinary field rooted in psychology, social sciences and human resource management… (centering) on culture, innovation, adult education, change management, organization behavior, and research design. … (involving) an ongoing, systematic, long-range process of driving organizational effectiveness, solving problems, and improving organizational performance. … Many OD interventions relate to human resource management and talent management. HR initiatives tend to focus on people practices. Meanwhile, organization development zooms out to consider multiple inputs across the depth of the organization. OD is more holistic and strategic whereas HR departments are systematic. … OD practitioners create an alignment of strategy, structure, people, rewards, metrics, and management processes to improve efficiency and productivity in the workplace. These practitioners identify and solve problems in organizational systems. They focus on impact engagement, productivity, and performance. They may also lead initiatives that benefit individual growth, such as career development, management and leadership development, and performance improvement. OD professionals are adept at designing and implementing employee engagement strategies and smoothing communication between employees and work groups. They specialize in expressing and codifying talent and leadership principles, values, and competencies that guide the company's culture.” Dr. Ed Hasan – U.S. academic, adjunct professor at Georgetown University and CEO of Kaizen Human Capital , serves as a Subject Matter Expert and Instructor for the Society for Human Resource Management.

“OD has the dual purpose of first to help the leadership and management of the organization address a particular need for change such as dealing with new technology, if a business confronting the competition in the industry, delivery of services more effectively if involved in the world of healthcare, reducing bureaucracy if a government institution, improving the quality of food and service if a restaurant chain, or providing an increase in safety and equity in the enforcement of the law if in the legal system, to name some examples. The second purpose of OD is to change an organization in the direction of increased involvement of organizational members in decision making that directly affects them in their daily work. This second purpose helps to strengthen organizational members’ commitment to the first purpose.  OD is based on open system theory and a particular set of values. Regarding theory, we begin with the organization’s external environment, for example, its competition, and its impact, input, on the organization, the consequences of that impact on the organization, throughput, followed by what management does in dealing with the competition, output, completing the theoretical cycle of input-throughput-output followed by a continuation of the cycle. With respect to values, a premium is placed on humanism, participation, collaboration, growth, and development. The OD practitioner intervenes in the organization with suggestions for organizational members' involvement, but the bulk of the practitioner’s work time is devoted to diagnosis and providing feedback to management accordingly. … OD is a process of planned change that involves an entire organization with a particular focus on the organization’s culture and leadership.”  W. Warner Burke, U.S. academic, The Edward Lee Thorndike Professor of Psychology and Education and coordinator for the graduate programs in social-organizational psychology in the Department of Organization and Leadership at Teachers College, Columbia University in New York.

“OD emerged out of human relations studies from the 1930s where psychologists realized that organizational structures and processes influence worker behavior and motivation. Kurt Lewin’s (Polish born/German-American psychologist, known as one of the modern pioneers of social, organizational, and applied psychology, work focused on applied research, action research, and group communication) work in the 1940s and 1950s also helped show that feedback was a valuable tool in addressing social processes. More recently, work on OD has expanded to focus on aligning organizations with their rapidly changing and complex environments through organizational learning, knowledge management and transformation of organizational norms and values.”  From the University of Pennsylvania Perelman School of Medicine website.

“Major organizational changes create uncertainty. But the point is to move quickly - faster than you are comfortable - because in hindsight, you will always wish you had made changes even sooner.”   Irene Rosenfeld – U.S. business executive, was the chairman and chief executive officer of Mondelēz International .

“But every company of the future is going to be in the business of exquisite care - which means quick turnaround time and convenience. To deliver exquisite care, you need an organization that coordinates well and listens well.” “Fernando Flores -   Chilean engineer, philosopher, entrepreneur, politician.

“Even in an organization that's doing something big and bold, there's the mundane, day-to-day execution work of keeping it going. But people need to stay connected to the boldness, to the vision, and stay plugged in to the main vein of the dream.” Peter Diamandis – U.S. engineer, physician, entrepreneur.

“The most resilient companies foster a pervasive culture of innovation at all levels of the organization - one that values risk-taking, embraces experimentation and considers failure an inevitable part of thinking boldly.” Lynne Doughtie – U.S. business executive, former chair and chief executive officer of KPMG U.S. Financial Services .

“Competitive advantage today depends not just on innovation, but on rethinking how organizations are structured and led.  Innovative businesses are transforming decision-making, leadership and governance to build resilience in an era of rapid change.  Executives must move beyond incremental improvements and embrace management innovation as a core strategy to remain competitive. … Across industries, the most forward-thinking companies aren’t just innovating their products—they’re reinventing how they operate. Dutch healthcare provider Buurtzorg replaced rigid hierarchies with self-managing nursing teams, improving both efficiency and patient outcomes, while Japanese multinational Kyocera introduced its "amoeba management" system, breaking the company into small, entrepreneurial units aligned with a shared vision. … In Europe, Bayer has undertaken an ambitious effort to remove layers of bureaucracy, empowering teams to take ownership of strategic decisions. Meanwhile in the US, Mastercard has restructured its organization to enhance agility, enabling it to adapt more fluidly in the fast-evolving payments industry.  The key to successful management innovation lies in creating organizational architectures that enable continuous evolution. This goes far beyond traditional change management—it's about building inherent adaptability into the organization's DNA.  … For executives, the challenge is clear: Are you creating an organization ready for continuous reinvention? In a world where agility, ecosystems and adaptability define success, the companies that rethink how they manage – not just what they produce – will be the ones that lead. The transformation is already happening. The only question is whether your company is keeping pace.”  From the article “Why The Best Companies Don’t Just Innovate – They Reinvent How They Manage” posted March 14, 2025, on the World Economic Forum by Mark Greeven – French/Dutch/Chinese academic, Professor of Management Innovation & Voice on China Innovation & Dean of IMD Asia.

“Your business’s makeup is more than what gets printed on an organizational chart. It reflects your priorities, business ethos, and future goals. Learn how to effectively shape your company to be more adaptable and sustainable in a changing business landscape. … While a chain of command can help you define your company’s direct hierarchy, it doesn’t always show you a complete picture of managerial responsibility. For that, you need to determine managers’ span of control (SOC)—the number of employees who report to a manager. The larger the number, the greater the span of control.”  From the article “Adapting Your Organizational Structure for Modern Business Challenges” posted January 7, 2025, on the Harvard Business Review by Brad Einstein, a contributing writer to Harvard Business School Online .

“You have to, in your own life, get people to want to work with you and want to help you. The organizational chart, in my opinion, means very little. I need my bosses' goodwill, but I need the goodwill of my subordinates even more.” Lloyd Blankfein -  U.S. investment banker, senior chairman of Goldman Sachs . 

“You can't forget that organizational success flows from the hearts and minds of the men and women you lead. Rather than treating your people as you'd like to be treated, treat them as they would like to be treated. Small gestures like opting for face-to-face meetings or sending personal notes can have an enormous impact on teams and their morale.”  Marillyn Hewson – U.S. business executive, former CEO and chairman of Lockheed Martin .

“Culture shapes everything from decision-making norms to employee engagement, brand perception to risk tolerance. When it’s mismanaged, organizations don’t just lose trust; they lose traction.”  From the article “To Change Company Culture, Focus on Systems – Not Communication” posted August 25, 2025 on the Harvard Business Review by Benjamin Laker – U.K. researcher,  former government advisor turned, currently serving as Professor of Leadership and Director of Impact and Global Engagement at Henley Business School , University of Reading and Visiting Fellow at Birkbeck, University of London ;  Childibere-Ogbonnaya – U.K. academic, Professor of Human Resource Management at King's College London ;  Yasin Rofcanin – U.K. academic, Professor of Human Resource Management and Organizational Psychology at University of Bath , School of Management; Tomasz Gorny  and Marcello Mariani.

“Successful OD is collaborative and future-oriented. When this is the case organizations can improve effectiveness, achieve goals, build capacity, and creatively manage challenges and change. … There are a variety of strategies that lead to empowerment in organizations. They can be directed toward individuals, work groups, or the entire organization. Peter Drucker (Austrian/U.S. management consultant, educator, and author, whose writings contributed to the philosophical and practical foundations of modern management theory) in 1997 issued this warning: ‘knowledge constantly makes itself obsolete’ implying that neither people nor organizations can rest on past laurels or strategies. The systemic approach to organizational development highlights the value OD places on … clearly identifying (the) challenges and developing action plans that outlines a path to success. In general, organizations that wish to achieve a high degree of organizational change will employ a full range of interventions, including those designed to transform individual and group behavior and attitudes.” From the article “The Impact of Organizational Development (OD) Methodology on Leadership Training: A More Intentional Consulting Approach” in the Journal of Practical Consulting posted on the Regent University website by Kathleen N. Cabler – U.S. business consultant, talent strategy director at Elevance Health, founder and president of Cabler Consulting Group, LLC (CCG), adjacent professor at Regent University.