• Agile Transformation

What is organizational development? Practical explanation for executives and managers in Agile organizations

You probably recognize it. Management wants to work “Agile. Teams follow Scrum training. There are daily stand-ups and sprints. But after a few months you feel that real change is lacking. People are still working the same way, decisions are made at the top, and the energy sinks in. This is exactly where organizational development makes a difference. In our work with large organizations such as municipalities and international companies, we often see it: implementing Agile without looking at the organization as a whole only works halfway. And sometimes not at all. Therefore, in this blog we answer the question: What is organizational development? From practice with concrete examples and applicable insights.

Organizational development is a topic of increasing importance for Scrum professionals, managers and teams. Not only because Agile is popular, but also because many organizations are stuck in their current ways of working. Those who understand organizational development can manage change in a more focused way, collaborate more effectively and make real impact.

What is organizational development?

Organizational development is the conscious and structured improvement of how an organization works, collaborates and learns. At Scrum Academy, we see organizational development as something that goes beyond structures or processes. It’s about the whole organization, that is:

• People and behavior
• Culture and leadership
• Processes and structures
• Collaboration between teams

In simple words, organizational development is making an organization smarter, more agile and people-oriented. It differs from isolated (often well-intentioned) improvement actions. It is not a training course here and a team intervention there. It is an ongoing development in which the organization learns to deal with change. Within Agile processes, this often means: not just implementing Scrum or Kanban, but also looking at leadership, decision-making, team autonomy and culture. This is also where organizational development and Agile meet. Agile is not just about sprints and boards, but about how an organization learns and changes.

How do you apply organizational development in an Agile context?

In in-company Agile projects, we see one important lesson: You can’t execute an Agile transformation without organizational development. Some practical insights from Scrum Academy trainings:

1. Start with the why

Many organizations start with tools and rituals. Better to start with questions such as:

• Why do we want to work Agile?
• What do we want to improve for customers and employees?
  What problems do we really solve?

Without a clear goal, Agile remains a gimmick.

2. Work on multiple levels simultaneously

Organizational development means working on:

• Team level (Scrum teams, collaboration)
• Leadership level (management style, decisions)
• Organizational level (structure, goals, priorities)

If you only focus on one level, friction arises.

3. Engage people actively

Change only works when people feel engaged. That means:

• Space for feedback
• Clear communication
• Psychological safety

Agile without people-centered work is not true Agile.

What is organizational development in relation to Agile working?

Agile working is a way to become more agile. Organizational development is the broader process by which you support the entire organization to actually sustain that agility. An Agile transformation requires organizational development at multiple levels that must be addressed.

You could think of it this way: Agile is a tool. Organizational development is the larger goal. Without attention to culture, behavior and structure, Agile remains superficial. With good organizational development, Agile becomes sustainable. That’s why at Scrum Academy we always pay attention to this in our training courses for Scrum Masters, Product Owners and Agile coaches.

Pros and cons of organizational development for organizations

Like any major change, organizational development has both benefits and challenges.
It is a strategic choice that affects people, processes and culture.

Benefits of organizational development:

• Greater agility and adaptability in a rapidly changing environment
• Better collaboration across teams and departments, with less silo thinking
• Increased employee ownership and engagement
• Faster and more effective decision-making at different levels
• Better alignment with customer needs and market trends
  

Disadvantages of organizational development:

• Takes time, energy and often financial investment
• Requires a different way of leading and letting go
• May provoke resistance from employees and management
• Results are not always directly measurable or visible
• Requires longevity and consistent persistence
  

This is precisely why good guidance is so important. Organization development is not a sprint. Nor is it a marathon. But a lifetime of moving and adapting when necessary. You are never done with it and that is not a bad thing at all. The world changes and you change with it. And that is very normal and natural.

A practical example from an in-company course

At a large government organization, we mentored several teams that were transitioning to Scrum. The teams attended training and got started enthusiastically.

But in practice, they ran aground:

• Decisions that were always reversed by management
• Departments that did not change with it
• Many dependencies between teams

Here the problem was not Scrum. The problem was in organizational development.

By working with executives on…

• Their role in an agile organization;
• Confidence in teams;
• Clear frameworks instead of control;

…space was created. Teams gained ownership, collaboration improved and after a few months we saw real change. This shows well that without organizational development, Agile would never have worked here.

What is organizational development? Key insights

In summary, the gist from the practice and vision of Scrum Academy:

• Organizational development is about improving the entire organization, not just teams.
• It is about people, behavior, culture and structure.
• Agile working is an important component, but not enough on its own.
• Leadership plays a crucial role in sustainable change.
  Without attention to culture, change remains superficial.

Organizational development is an ongoing process, not a one-time project.

Frequently asked questions about organizational development

What is organizational development in simple language?
It is making how an organization collaborates, learns and responds to change better and smarter. It is not only about structures and processes, but also about behavior, culture and mindset.

Is organizational development the same as change?
No. Change is often temporary. Organizational development is about sustained improvement and learning. It focuses on developing the organization’s ability to handle change itself.

Why is organizational development important for Scrum Masters?
Because as a Scrum Master, you not only support teams but also help with broader changes in the organization. You often work at the intersection of team, management and organizational culture.

What is organizational development in relation to Agile working?
Agile working is part of organizational development, but organizational development is broader than just Agile. It is also about leadership, structure and the way people work together and make decisions.

Where can I learn more about organizational development and Agile?
At Scrum Academy we offer training courses and in-company programs in which organizational development, Agile, Scrum and leadership come together. This way you not only learn the theory, but also how to apply it practically in your organization.

Whether it’s a program for team(s), coaching on the job for the MT or a program for developing the entire organization. From all the modules we have developed, we always find an interactive and effective program. So: let’s spar about your organizational development!