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