Doing Organizational Development (OD) in Startups (revised 2026)
This post discusses how to do organizational development (OD) work with startups and their founders. Don’t get too excited—it’s not easy.
At first glance, there seems to be a strong match between the value proposition of OD and the needs of startups.
Startups usually have talented people, flexibility, and a high level of engagement. They also do not yet suffer from the chronic problems that affect older organizations.
OD can provide a development platform—mindsets, concepts, and skills—to support the new technologies and products that startups are creating. In addition, teamwork is a critical success factor in startups.
It sounds like a perfect fit.
However, founders are often not receptive to OD. Ironically, the very qualities that allow someone to become a founder can also prevent them from making proper use of OD.
Founders are driven to break barriers and create innovation. Because of this, they often view “organizational issues” in one of two ways:
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Organizational issues are trivial—just “common sense” (usually meaning the founder’s own common sense).
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Organizational issues are an opportunity to reinvent human nature: “I will create an organization that changes the way people organize.”
Startups may have great ideas, advanced technologies, and talented people. Founders often develop detailed roadmaps for building their technological solutions. Yet they rarely ask a critical question:
“What kind of organization do we need in order to support these great ideas?”
As a result, the factors that eventually limit a startup’s growth are often organizational—and they are frequently reinforced by the behavior of an overly confident founder.
Founders also tend to react poorly to OD consultants. Not only are some founders arrogant, but many OD practitioners lack the technical understanding needed to gain the founders’ respect.
There is also a generational gap. OD consultants are often much older than startup founders, which can create a “parent–child” dynamic. (For example, I am 76, and many of my clients are in their twenties.)
In the early stages, founders typically appoint an administrative assistant as the first HR manager—along with responsibility for facilities and car rentals. This effectively closes the HR channel for serious organizational work, because the newly empowered administrator often blocks access to the CEO.
Sometimes investors try to solve this problem by placing an OD consultant on the board or attaching OD support as a condition of their investment. This approach can undermine trust between the founder and the consultant—although I have seen a few cases where it worked.
In most startups, OD work truly begins only when the founder steps aside to become CTO and a professional CEO is brought in. The tension between the founder and the new CEO is often the ideal entry point for an OD project.
In fact, about 98% of the work I do with startups begins this way.
Once a project begins, I suggest focusing on several key areas:
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Align organizational development with future growth. Build the organization that will be needed six months from now, not just the one that fits today.
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Create a dialogue and action plan around scalability. The organization must be able to grow without breaking.
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Manage the evolution of the early employees. The company should neither become enslaved to the founding team nor simply push them aside. There are constructive ways to handle this transition.
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Develop an ongoing life-cycle dialogue about people, skills, norms, and organizational structure.
Follow me: @AllonShevat
Je suis d’accord, Monsieur. Comment allez vous?
pas mal mais
très chaud
vraiment terrible
Your last paragraph resonates deeply with my own experience also. Over the course of my 40 year experience as an OD consultant, I have developed the following construct to help me grasp organizational culture and how its factors apply to what I call: “The Father-Founder Culture”. I chose the term “Father-Founder” from Jungs’ typology and not to suggest that the founder can only be a male.
So, here is my construct of the factors that define organizational culture and how it applies to what I term “THE FATHER-FOUNDER CULTURE”.
CRITERIA OF SUCCESS: Arbitrarily defined by the Father-Founder
MAJOR CONCERN: Flexibility and adaptability from others to the Father-Founder as the tribal chief.
DIVISION OF LABOR: Vertical, imposed superior subordinate distinction
COORDINATION MECHANISM: Direct from the tribal chief and his/her chosen ones.
INFORMATION FLOW: Centralized and arbitrary.
POWER BASE: Ownership (I have seen cases where the “chosen ones” even dressed up like the Father-Founder figure.)
CAREER AND PROMOTIONS: Boss decided.
CONFLICTS: Boss identifies and solves.
Lévis
great really
Spot on, as usual. It takes a real visionary for a startup leader to recognize the need for OD. But then, especially in this economy, isn’t that universally true?
& all of this despite the considerable anecdotal evidence that startups which pay attention to & consciously create their cultures have a higher success rate…
& then there are the founders like the one with the .com that hired me in 2000. He said all the right things, seemed to get it, & then was always too busy to participate in any of the culture building activities I designed & facilitated.
I worked in two start ups early in my career. In the first one I asked the founder/CEO – what are you doing about culture and he laughed. His organization failed.
I the second one the organizational culture was taken seriously and was clear – though it changed over time as the organization grew. This organization was successful.
Good day! This article is very helpful to someone like me who wanted to pursue on becoming an OD consultant. Is it okay to know further how the ‘action plan around developing scalability’ (the one mentioned earlier in your article) works? Thank you for imparting your knowledge in regards to this topic. Have a nice day!
I once posed the question – Is Business Development on the outside the same as OD on the inside of organisations? OD tends to improve internal markets by improving relationships and joining people and ideas. it appears that Business development does the same but with external markets and relationships? Would slightly rebranding OD to BD assist us engaging with entrepreneurs and start-ups?
Wise words , Heidi.
Hello Allon,
I am so glad to have come across this blog!!! I am re-oriented part of my OD practice to include start-ups. I am just beginning to work with one now – two co-founders. They are almost half my age. Any resources, tips and “send me to” sites/information you could recommend would be most appreciated!
Thank you
Alexandra
Hi Alexandra
I suggest you read my last post on micromanagement, which is often very prevalent in start ups.
alon
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Another excellent post, Allon. Again, I am reminded of one of my experiences. Back in the 90’s, I joined a telecom company that was ten years old since its start-up days. At some point in those early years, the CIO had introduced an OD consultant to the company. This consultant helped the C-team to craft a culture framework (based on speed, customer focus, innovation, teamwork, and a few other core values) and install it.
When, as a newbie, I attended the initial training, three full days were spent on the culture. The CEO stopped by to talk about the values of the company, as did the head of Sales and the head of Engineering. They illustrated their remarks with actual success stories from the first ten years.
I was impressed by the commitment!
The CEO was fond of saying “Our secret weapon is our culture. And the key to that is the commitment of our people to the principles that have helped us to grow.”
Over the next five years, until the company got acquired, that commitment to culture never faltered.
Helpful read. Becoming an OD consultant sounds challenging but rewarding, especially when you’re supporting teams through change and growth.