Cutting-Edge Organization Development: Emerging Practices in Leading Organization Change

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Cutting-Edge Organization DevelopmentEmerging
Practices in Leading Organization Change

• William J. Rothwell

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Part IIntroduction
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Purpose of the Workshop

• Organization development (OD) has been widely
  practiced in organizations since at least the
  1960s. This workshop will provide an overview of
  the most cutting-edge OD applications, explaining
  what they are, why they are used, and how they
  are used.

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Workshop Objective

• On completing this session, participants will
  be able to...
• Summarize key trends and issues affecting
  organization development (OD) in the last ten
  years and what the future holds in store.

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Workshop Organization
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Part IIWhat Is OD?(A Brief Review)
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What Is OD? A Definition

• Organization development (OD) is all about
  changing groups of people through humanistic
  means. It is a complex approach to change that
  seeks to unleash group potential and creativity.

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How Does OD Differ from Other Change Management
Approaches?

• Coercive
• Persuasive
• Leadership change
• Legalistic/policy
• Dialectic
• Education/changed norms (OD)

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Key Points About OD

• OD is long-range in perspective.
• OD should be supported by top managers.
• OD effects change chiefly, though not
  exclusively, through education.
• OD expands people's ideas, beliefs, and behaviors
  so they can apply new approaches to old problems.

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Key Points About OD

• OD emphasizes participation in diagnosing
  problems, considering possible solutions,
  selecting a solution, identifying change
  objectives for solving problems, implementing
  planned change, and evaluating results.

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What Model Guides OD?
16. Have consultant depart
1. Recognize an organizational problem
15. Ensure acceptance
2. Hire a consultant
14. Evaluate results
3. Investigate the organization
13. Implement the action plan
4. Collect information about the problem
12. Get agreement on the action plan
5. Feed back information about the problem
11. Feed back information
6. Get agreement on the problem
10. Collect information on an action plan
7. Collect information about a solution
9. Get agreement on the solution
8. Feed back information about a solution
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Step 1 Recognize an Organizational Problem

• To use OD, someone must...
• Recognize that a problem exists
• Have sufficient authority to be able to take
  corrective action
• Realize that the problem lends itself to a
  solution that is appropriate for OD

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Step 1 Recognize an Organizational Problem

• The first step in the Action Research Model (ARM)
  is to recognize an organizational problem.
• No change can occur until someone--a CEO, a
  senior manager, or someone else--recognizes that
  a change is necessary.
• The manager who asks for help from a consultant
  is called the sponsor.
• The group that benefits from a change effort is
  called the client.

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Step 1 Recognize an Organizational Problem A
Simple Example

• Take the case of XYZ company. The Vice President
  of Human Resources knew that the company was
  plagued by too much turnover. Employees would not
  stay in the company. So, she became a sponsor for
  an OD effort.

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Step 2 Hire a Consultant

• OD is usually facilitated by an external
  consultant, someone from outside the group that
  has the problem or the need.
• OD consultants focus on group process, not on the
  task or the problem itself.

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Step 2 Hire a Consultant A Simple Example

• In the example, XYZ company's Vice President of
  Human Resources hired an OD consultant to examine
  company turnover using the Action Research Model.

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Step 3 Investigate the Organization

• Since the OD consultant comes from outside the
  organization, he or she must investigate the...
• Organization
• People in it
• Work environment

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Step 3 Investigate the Organization A Simple
Example

• In the example, the OD consultant hired by XYZ
  company began by requesting information about the
  company even while the consultant was on the
  phone with the Vice President of Human Resources.
  She asked to see the organization chart, the
  company's annual report, any employee exit
  interview information, and the exact turnover
  statistics for the company and its industry. She
  received those to review before arriving at XYZ
  company.

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Step 4 Collect Information About the Problem

• The fourth step of the Action Research Model is
  to have the consultant collect information about
  the problem from the stakeholders.
• Unlike the earlier step in which the consultant
  collects information about the organization, the
  consultant in this step focuses on gathering the
  perceptions of key managers, workers, and perhaps
  even customers, suppliers or distributors about
  the problem.
• It is important that the information is gathered
  from individuals rather than from many people at
  once.

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Step 4 Collect Information About the Problem A
Simple Example

• In the example, consultant Joan Smith arrived at
  XYZ company and began interviewing many people.
  She talked to the Vice President of Human
  Resources, the Vice President for Manufacturing,
  and also supervisors and workers in the company.
• She asked the same questions in all
  interviews so that she could compare the results.

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Step 5 Feed Back Information About the Problem

• The fifth step in the Action Research Model is to
  feed back information about the problem to the
  stakeholders.
• The consultant thus summarizes what he or she has
  learned and presents it to those who provided
  information. That includes not just managers but
  also workers who supplied information.
• One typical result of this step is that people
  react with shock. (It is an example of what
  psychologists call cognitive dissonance.)

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Step 5 Feed Back Information About the Problem

• The managers and workers are surprised by how
  much difference of opinion exists about the
  problem.
• These differences of opinion are a driver for
  change, since they shock managers into realizing
  how much opinions vary on the subject.

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Step 5 Feed Back Information About the Problem
A Simple Example

• In the example, consultant Joan Smith compiled
  the information she had received during the
  interviews
• She heard that XYZ's company turnover was a
  problem.
• She also heard from the managers and workers a
  range of causes for it--including low salaries
  and authoritarian management practices.

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Step 5 Feed Back Information About the Problem
A Simple Example

• She then briefed the Vice President of Human
  Resources about what she had learned from the
  interviews, though Joan Smith was careful not to
  name specific people she had interviewed.
• She then scheduled a meeting with all the
  people she interviewed and other interested
  people. She provided the group with a complete
  report on what she had found out, and she asked
  them to vote about the most important causes of
  the turnover.
• As expected, they were surprised about the
  many differences of opinion about the causes of
  the problem.

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Step 6 Get Agreement on the Problem

• In this step, the OD consultant works with all
  the stakeholders to focus on gaining agreement
  about...
• What the problem is,
• What causes it,
• How important it is, and
• What will happen if the problem is left unsolved.

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Step 6 Get Agreement on the Problem A Simple
Example

• In the example, Joan Smith worked with the group
  she briefed to get agreement on the nature of the
  problem, its cause, and its priority to the
  organization.
• By the time she left the meeting with the
  group, she had a clear sense of the problem as
  the group saw it.

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Step 7 Collect Information About the Solution

• In the seventh step, the OD consultant...
• Collects information about the solution from the
  stakeholders
• Gathers the perceptions of key managers, workers,
  and perhaps even customers, suppliers, or
  distributors about ways to solve the problem

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Step 7 Collect Information About the Solution A
Simple Example

• In the example, consultant Joan Smith interviewed
  the stakeholders again, following the same
  procedures as when she interviewed people about
  the problem, but this time she focused on finding
  the most appropriate solutions to the problem.
• As before, she asked the same questions in
  all interviews so that she could compare the
  results.

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Step 8 Feed Back Information About the Solution

• In the eighth step in the Action Research
  Model, the OD consultant...
• Feeds back information about the solution to the
  stakeholders.
• Summarizes what he or she has learned and
  presents it to those who provided information.
  That includes not just managers but also workers
  who supplied information.
• One typical result of this step is that people
  again react with shock. They are surprised about
  how much difference of opinion exists about the
  solution.

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Step 8 Feed Back Information About the Solution
A Simple Example

• In the example, consultant Joan Smith compiled
  the information she had received during the
  interviews. She heard that the company should
  authorize a salary study, examine recruitment and
  selection practices, provide supervisory and
  management training to improve leadership quality
  in the organization, and many other possible
  solutions.
• As before, she briefed the Vice President of
  Human Resources about what she had learned from
  the interviews.

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Step 8 Feed Back Information About the Solution
A Simple Example

• She then scheduled a meeting with all the people
  she interviewed and other interested people and
  provided the group with a complete report on what
  she had found out.

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Step 9 Get Agreement on the Solution

• In the ninth step, the OD consultant works
  with all the stakeholders to gain agreement
  about...
• What the solution to the problem should be,
• Why it addresses the cause of the problem, and
• Why one solution is better than others.

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Step 10 Collect Information About the Action Plan

• In this step, the OD consultant...
• Collects information from stakeholders about what
  they believe the action plan to implement the
  solution should be
• Works with stakeholders to establish metrics by
  which to measure success

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Step 11 Feed Back Information About the Action
Plan

• In this step ,the OD consultant simply feeds
  back information to the stakeholders about...
• What the action plan should be
• How success can be measured during and after the
  intervention

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Step 12 Get Agreement on the Action Plan

• In the twelfth step, the OD consultant works
  with stakeholders to get agreement on...
• The action plan
• Metrics and change objectives

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Step 13 Implement the Action Plan

• During the thirteenth step, the action plan is
  implemented.
• This step, like all the others, remains the
  responsibility of the client--that is, the
  stakeholders who will benefit from the change
  effort--and not the consultant.
• The consultant's role is to help the client group
  members work together effectively to solve the
  problem that the stakeholders identified using
  the solution and action plan identified by the
  client group.

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Step 14 Evaluate Results

• In the fourteenth step, the OD consultant...
• Helps the stakeholders track the results of their
  solution and action plan
• Focuses attention on getting results
• Draws the attention of the stakeholder group when
  the action plan is forgotten or when the problem
  is not being solved

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Step 15 Ensure Acceptance

• One proof of an effective OD consultant is that
  the change effort continues after the consultant
  leaves.
• One way OD consultants can ensure that happens is
  by training a replacement to take their places
  when they leave the organization.

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Step 16 Have the Consultant Depart

• The OD consultant has helped the stakeholders
  solve their problem by using their own action
  plan. It is appropriate at this point for the
  consultant to leave.

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Summary of the Example The Last Few Steps

• In the example, Joan Smith worked with the group
  she briefed to get agreement on the solution, the
  action plan, and ways of measuring results.
• In this case, the company agreed to do a
  salary study and offer supervisory training to
  improve the quality of supervision in the
  organization.

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Summary of the Example The Last Few Steps

• Joan Smith trained a person to act in her role
  after she left, thereby setting the stage for
  company acceptance of the change effort.
• The result of the OD intervention was that
  the turnover at XYZ company declined over the
  following months.

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Part IIIWhat Key Trends and Issues Have Been
Affecting OD in the Last Ten Years,and What Does
the Future Hold in Store?
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A Demonstration of the Action Research Model

• Get a piece of paper.
• Working by yourself, spend about five minutes to
  make a list of as many workplace or workforce
  trends or issues as you can think of that have
  become important in the last ten years.
• Feel free to be creative.
• When you are finished, hand in your paper.
• Do not talk with others.

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The Results of the Activity

• First, lets list the trends that you identified.
• Then, lets brainstorm on what those trends or
  issues mean for OD.

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Activity on Planning to Address the Trends/Issues

• Form groups of 3-5 people each.
• Appoint a spokesperson for your team.
• Spend about 20 minutes to reflect about ways that
  workplace issues/trends have affected OD.
• More specifically, for each trend that you
  identify, generate a list of the special
  competencies that will be necessary in the future
  for OD practitioners to address these issues.

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Other Thoughts on Trends/Issues Affecting OD

• An examination of the literature over the
  last five years reveals that OD practitioners are
  talking about...
• Applications of chaos theory to organizations
• The stress produced by change
• Values
• Spirituality as a change effort
• Techniques for assessing readiness for change

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Other Thoughts on Trends/Issues Affecting OD

• Models for navigating change efforts, including
  case studies
• Strategies for overcoming resistance to change
• Managing cynicism about change
• The importance of the communication process
  during change efforts
• Building trust
• Handling too much change

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Overview of Key Themes in OD Over the Last Ten
Years
Spirituality
Values
Stress
Readiness For Change
Chaos Theory
OD
Too Much Change
Change Models
Resistance To Change
Cynicism
Trust
Communication
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Applications of Chaos Theory to Change

• The future is often viewed as an extension of the
  past.
• Todays business forecasting methods assume that
  , if we know the starting point, we can predict
  events in a straight line.
• The discovery of nonlinear, dynamic systems and
  chaos theory by Edward Lorenz of MIT in the 1960s
  changed the view of the future as an extension of
  the past in fundamental ways. Only recently,
  however, has this theory been applied to
  organizations.

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Applications of Chaos Theory to Change

• Chaos theory suggests that chance, changing
  conditions, and creativity can enter a complex
  system at any point and shift its course.
• The goal of chaos theory is to revel in
  improvisation.
• Jazz music represents order within disorder.
• Adaptation to unfolding events is the secret of
  chaos theory.

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Applications of Chaos Theory to Change

• To apply chaos theory, give people guidelines but
  let them innovate and improvise around them.
• Complex adaptive systems (CAS) represent examples
  of models for organizations.
• Rather than stifling chaos, managers should allow
  it to flourish by ensuring the environment
  encourages interaction and creativity.

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Applications of Chaos Theory to Change

• Chaos theory also recognizes the
  interconnectedness of chance events--the
  butterfly effect. (If a butterfly flaps its
  wings in South America, will that influence
  weather patterns in the U.S.A.?)
• Use visual thinking as an aid to see the
  interconnectedness of seemingly unrelated events.

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Stress Associated with Change

• Change has been increasing in both its rate
  (speed) and its magnitude (scope). As a
  consequence...
• It builds stress
• It is only intensified by new technology that
  builds uncertainty and breaks down barriers
  between personal time/space and work time/space
• Efforts to cope with stress and to balance work
  and personal life are topics of emerging
  importance that will only grow more important

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Values

• Values refer to beliefs about what is good or
  bad.
• Interest in values has stemmed from a recognition
  that organizations cannot and should not pursue
  results (performance) at the expense of morality
  (values).

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14 Values That Can Make Work a Source of
Satisfaction

• Inclusion
• Collaboration
• Teams
• Vision
• Diversity
• Awareness
• Communication
• Risk taking
• Problem solving
• Leading
• Personal growth
• Personal satisfaction
• Conflict as opportunity
• Embracing change

Source Cloke, K., Goldsmith, J. (1997). Thank
God it's Monday! 14 values we need to humanize
the way we work. Chicago Irwin.
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Spirituality as a Change Effort

• There is growing interest in spirituality, a
  feeling of meaning beyond the individual. One
  author argues that the soul can be present and
  useful in the workplace by focusing on the
  spiritual practices of...
• Attention,
• Openness, and
• Listening.
• Source Briskin, A. (1996). The stirring of
  soul in the workplace. San Francisco Jossey-Bass.

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Spirituality as a Change Effort

• Other authors claim that organization change can
  only occur when organizations find ways to
  integrate personal beliefs with organizational
  values so as to increase meaning and purpose in
  the workplace.
• Source Mitroff, I., Denton, E. (1999). A
  spiritual audit of corporate America A hard look
  at spirituality, religion, and values in the
  workplace. San Francisco Jossey-Bass.

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Techniques for Assessing Readiness for Change

• Several studies or articles over the last
  five years have looked at readiness for change.
  One study of manufacturing employees set out to
  determine what factors indicate a readiness for
  change and found that 3 predictive variables
  are...
• Employees with personal power,
• Employees in managerial positions, and
• Employees new to the company.

Source Hanpachern, C., Morgan, G., Griego, O.
(1998). An extension of the theory of margin A
framework for assessing readiness for change.
Human Resource Development Quarterly, 9(4),
339-350.
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Techniques for Assessing Readiness for Change

• Issues to consider when examining an
  organizations readiness for change include the
  following
• Sponsorship
• Leadership
• Motivation
• Direction
• Measurements
• Organizational context
• Processes/functions
• Competitor benchmarking
• Customer focus

Source Stewart, T. (1994) Rate your readiness to
change. Fortune, 129(3), 106-110.
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Techniques for Assessing Readiness for Change

• Rewards
• Organizational structure
• Communication
• Organizational hierarchy
• Prior experience with change
• Morale
• Innovation
• Decision-making

Source Stewart, T. (1994) Rate your readiness to
change. Fortune, 129(3), 106-110.
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Techniques for Assessing Readiness for Change

• Other issues to consider when assessing
  readiness for change include the following
• Flexibility
• Learning mind-set
• Alignment of strategic actions

Source Moravec, M. (1995). Readiness to change.
Executive Excellence, 12(10), 16.
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Models for Navigating Change Efforts

• A focus on models for navigating change
  efforts in organizations is another theme that
  has emerged in OD in recent years. One such model
  consists of the following
• Communicate the vision.
• Help the members of a change effort understand
  their identity.
• Establish teams.
• Transform team conflict into team creativity.
• Determine the organization's purpose and meaning.

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Models for Navigating Change Efforts

• Another such model is based on the following
  tenets
• Establish a clear vision.
• Create a united senior team.
• Sustain effective communications.
• Use processes that avoid the "not invented here"
  syndrome.
• Use processes that do not raise unrealistic
  expectations.
• Use processes that encourage ownership.
• Use processes that encourage transparency.

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Models for Navigating Change Efforts

• According to a study of "highly successful"
  organizations in transition, conducted by Coopers
  Lybrand Consulting in conjunction with Opinion
  Research Corporation International of Princeton,
  five factors are the key drivers of success in
  organization change efforts
• Strong leadership
• Effective communication
• A tight alignment of people and organizational
  goals
• Adequate training and funding
• A clear definition of the compelling reasons to
  change

• Source Smith, D. (1998). Invigorating change
  initiatives. Management Review,
• 87(5), 45-48.

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Strategies for Overcoming Resistance to Change

• Other authors and researchers in recent years
  have directed their attention to dealing with
  resistance to change. One way to do that is to
  focus oninvolvement, motivation, and open
  discussion.

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Strategies for Overcoming Resistance to Change

• One study summarized research on how best to
  overcome employee resistance to change and
  concluded that the most effective techniques
  involve the following
• Employee interaction with executives or direct
  managers, followed by
• Electronic tools used for status reports or other
  similar purposes.

Source Frady, M. (1997). Get personal to
communicate coming change. Performance
Improvement, 36(7), 32-33.
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Managing Cynicism About Change

• Recent research has also focused around cynicism
  about change efforts in organizations.

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Managing Cynicism About Change

• A study by Andersson and Bateman examined
  cynicism as both a general and specific
  construct. They measured three types of
  cynicism
• Toward one's specific organization,
• Toward business executives, and
• Toward human nature in general.

Source Wanous, J. (2000). Cynicism about
organizational change. Group Organization
Management, 25(2), 132-153.
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Managing Cynicism About Change

• Researchers in one study conducted confidential
  interviews with 120 managers and employees in a
  large Midwestern plant.
• The interviews were designed to elicit employee
  perceptions of all relevant aspects of work at
  this plant in preparation for the development of
  a survey of organizational culture.

Source Reichers, A., Wanous, J., Austin, J.
(1997). Understanding and managing cynicism
about organizational change. Academy of
Management Executive, 11(1), 48-59.
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Managing Cynicism About Change

• Participants expressed polite disbelief that any
  initiatives the researchers were planning would
  result in successful change.
• Reason many employees and managers had
  experienced numerous failed change efforts in the
  past.
• At length and in great detail, respondents
  recounted a history of previous failures. These
  insights centered on management's lack of effort
  or ability.

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Managing Cynicism About Change

• Manage cynicism during organization change by...
• Providing timely, appropriate, credible
  information,
• Admitting mistakes when they occur,
• Apologizing when mistakes are made, and
• Quickly taking appropriate corrective action when
  necessary.

Source Reichers, A., Wanous, J., Austin, J.
(1997). Understanding and managing cynicism
about organizational change. Academy of
Management Executive, 11(1), 48-59.
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The Importance of Communication During the Change
Process

• One author found that an important part of
  change management is keeping employees informed
  during the change process.

• Source Arthur, J. (1999). No secrets. Human
  Resource Executive, 13(7), 34-36.

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The Importance of Communication During the Change
Process

• For communication to be successful, it must be
• Frequent
• Specific
• Open
• Credible
• Provided in many ways

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Building Trust

• The problem of lack of trust stems from
• A widening gap between "haves" and have nots,
• Diminished congruence between words and deeds,
  and
• A lack of openness.

Source Burke, W. (1997). The new agenda for
organization development. Organizational
Dynamics, 26(1), 6-20.
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Building Trust

• The prime behavioral precursor to trust is
  openness, and openness is one of the fundamental
  values guiding OD. To build trust...
• Push for openness
• Model what that means
• Coach and provide feedback for executives

Source Burke, W. (1997). The new agenda for
organization development. Organizational
Dynamics, 26(1), 6-20.
76
Handling Too Much Change

• Emotional factors in change should be managed as
  much as the objective management issues.
• Two authors have indicated that todays
  organizations are addicted to change for its own
  sake.
• (See Rieley, J., Rieley, M. (1999). Is your
  organization addicted to change? National
  Productivity Review, 18(3), 63-68.)

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Summary
Spirituality
Values
Stress
Readiness For Change
Chaos Theory
OD
Too Much Change
Change Models
Trust
Resistance To Change
Cynicism
Communication
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Your Thoughts

• What do you think these trends in OD might mean
  for practitioners? Others?

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Part IVConclusion