Hey Jazzbo, what did all of that exactly entail, if you don't mind me asking? I'm appying to a PhD program in leadership studies. My eventual goal is to start a grand-funded nonprofit leadership institute that offers its services at a discounted price to nonprofit and public institutions (and perhaps some small private firms that meet a specific criterion, such as being considered a "green" agency). One part of the mission of the institute is that I want to do organizational development and leadership development with services that include, selection, assessment, compensation planning, performance appraisal, coaching, training, team building, and succession planning. I'd like to offer these services to the nonprofit sector, because I feel I would be doing something good for firms with a positive mission who, because of their budgetary contraints as nonprofits, may not be able to afford the services of many of the firms that offer their services primarily to the for-profit sector. Futher more, some of these agencies may not be able to afford a fulltime HR department or may need help with strategic HR planning when they are just getting started.
The other mission of the institute would be to conduct research. If the institute doesn't end of being associated with a university, then I and any fellows at the institute are going to need to partner up with some scholars in academia (i.e., I need to start hitting up some conferences). It's kind of hard to get IRB approval when there's no IRB.

The eventual plan would be to put out a peer-reviewed journal.
The hardest part is going to be finding out who would want to give me the grant. If it were a think tank, I could just find whoever wanted their view of the world supported by research. But it's not a think tank; I'm not trying to change public policy or push a political or economic agenda (other than helping nonprofits and public agencies succeed on the human resources front). I have to seek the counsel of some people with grant experience. I have a written mission and goal, but I still need to write a business plan. I really need to give consideration to a budget.
My Bachelor's is in psychology with a foundation in I/O. My Master's is in labor relations, though my interests tend towards HR processess, such as selection and assessment, rather than collective bargaining and grievance management. My research interest is in leadership studies. My thesis is on how gender can be a moderating variable in social perceptions of transformational and transactional leader efficacy.
And now I'm rambling; I just meant to ask Jazzbo about his I/O experience.

I just love talking about this stuff.
I love your idea. I think it's brilliant and I can guarantee you that the funding is out there. It's just a matter of finding it. And, I'm sure, a matter of enduring many refusals until you get your funding. What you're proposing is ambitious and challenging, yet certainly needed. Good luck.
I don't know that I can offer much to your situation, as I don't know that I have the energy or personal resolve for the type of project that you envision. But, you asked about what I'm currently doing, so I'll share with you what I can.
Before I entered my program I did 10 years of corporate time. (I was finally parolled). So, I brought with me an awareness of corporate and business environments. In addition, my partner is a private practice owner/operator with over 10 years experience practicing. I've gained a lot of wisdom that way alone. Then, add in my training in clinical psychology, and I knew that consultation would be a good way to add variety to my career, make good money, and to do a service for others.
Part of this started with the idea that clinical programs, (of every ilk: chiropractors, psychotherapists, naturopaths, nutritionists, etc.), don't train individuals to operate successful businesses. Further, many individuals in those areas are hesitant to take initiative. There is sometimes a tacit edict in health care that people be overly altruistic. Unless you're a physician, you're not expected to make money or be successful. After all, you just want to help people, don't you?
So, I worked some connections that I have and was hired on as a consultant for two local, small proprietors. My duties include everything top-down. For one particular client, she is the only person involved in her business and business affairs. Many of my duties are more business-consultant-ish, and non psychological. They focus on strategy, work flow, marketing, and more.
The other individual I'm working for is more interesting. She runs a clinic with a variety of disparate practitioners and is transitioning into a different small business model that exponentially expands her business. In this business there is much more focus on assessment; mentoring and professional development; compensation and strategic business planning; leadership, partner, and associate coaching; governance and management structure review; facilitating retreats; and more. My particular area of expertise is mentoring and mentoring relationships. This is where I've been able to make the greatest impacts, particularly because I'm working with female-run businesses, and women traditionally have far less access to mentorship than men.
Elliot Jacques and James Collins are two particular writers whose work have been very influential. There is another individual that I've apprenticed with, but he's my dissertation chair as well, and I don't want to name him as I wish - due largely to the nature of my profession - to remain as anonymous as possible on the internet.
Anyway, I've been excited about doing it. I have a good friend who's about to finish law school. His focus is on green businesses, and I'm hoping to get involved in doing consultation with him and law firms in the area. Like you, I'm not interested in mediation. I'm interested in helping ethical, good companies grow and increase employee satisfaction (and therefore retention).