Module Sixteen Organizational Change, Development, and Learning

1. Module Sixteen Organizational Change, Development, and Learning

2. A POINT OF DEPARTURE • At the most basic level, an organization is viewed as a social entity created within a cultural context for the purpose of accomplishing tasks that individuals can not accomplish alone. • As such an organization relies on coordinated activities, arrangements and grouping of tasks and people. • Planned change involves a deliberate, purposeful and explicit managerial decision to engage in a program of change • Planned change involves a complex process that must be designed and managed

3. THE MULTIDISCIPLINARY NATURE OF THE FIELD • People in the field are drawn from a variety of disciplines (i.e., sociology, social psychology, anthropology, economics, biology, physics, engineering,…) • Rich diversity of theories about change • The richness of the disciplines can be seen in the wide array of definitions of the field

4. Burke’s Definition of OD OD is a planned process of change in an organization’s culture through the utilization of behavioral science technology, research, and theory.

5. French’s Definition of OD OD refers to a long-range effort to improve an organization’s problem-solving capabilities and its ability to cope with changes in its external environment with the help of external or internal behavioral-scientist consultants.

6. Beckhard’s Definition of OD OD is an effort (1) planned, (2) organization-wide, and (3) managed from the top, to (4) increase organization effectiveness and health through (5) planned interventions in the organization’s “processes,” using behavioral science knowledge.

7. Beer’s Definition of OD OD is a system-wide process of data collection, diagnosis, action planning, intervention, and evaluation aimed at: (1) enhancing congruence between organizational structure, process, strategy, people, and culture; (2) developing new and creative organizational solutions; and (3) developing the organization’s self-renewing capacity. It occurs through collaboration of organizational members working with a change agent using behavioral science theory, research, and technology.

8. Five Stems of OD Practice Laboratory Training Action Research/Survey Feedback Participative Management Current Practice Quality of Work Life Strategic Change 1950 1960 1970 1980 1990 2000

9. Stages of GE’s Culture Change Culture Change Speed Simplicity Self confidence High Key Strategic Initiatives: QMI, NPI, OTR, SM, Productivity, Globalization Change Process: increase success and accelerate change Process Improvement: continuous improvement, re-engineering Intensity Productivity/Best Practices: looking outside GE Work-out/Town Meetings: Action Work-outs empowerment, bureaucracy busting, action Low Time

10. Stages of GE’s Culture Change Workout GE in 80’s and 90’s GE Crotonville Vision Values Processes 80’s # 1 or # 2 Reality Manpower Review or Candor Crotonville Fix, Close or Sell Lean/Agile Corp. Exec. Council Hard Headed/ Soft Hearted (Structural Revolution/Cultural Change) Vision Values Processes # 1 or # 2 Self-confidence Workout 90’s + (Internally & Externally) “Boundary-less Simplicity (Internally & Externally) Speed (Cultural Revolution)

11. Workout: Finding a Better Way... Every Day An Evolutionary Process Phase III - Culture Become the most productive company on earth Phase II - Processes Build sense of contribution through speed and simplicity and improve business results Change Phase I - Activity Eliminate work; build confidence Time Getting started Gaining momentum Becoming part Self-sustaining spontaneity "Quick Hits" Cross functional issues of the culture Part of the process

12. Managing Organizational Change and Development General Electric Work-Out: A Comparative Summary GE Businesses Gas Engine Turbines Albany, New York • Implementation • Process • Standard Work- • Out • Delayering • Employee • decision-making • initiative • Self-directed • work teams • Cultural • Context • Structured • assembly • line • atmosphere • High level • of union • influence • Distinctive • hierarchy • Road • Blocks • Union • influence: • festered a • skeptical • environment • among • line workers • Reported • Outcomes • 80% decrease in • production time • to build gas • engine turbines

13. Managing Organizational Change and Development General Electric Work-Out: A Comparative Summary GE Businesses Lightening Arresters Puerto Rica (products protect power lines from surges) • Implementation • Process • Flattened • organization • Worker • participation in • decisions • GE offered employee • additional money • in exchange for • participation in • Work-Out • GE offered extra • money to employees • who earned degrees • (focused on English • and business • degree) • Production control • by employees-they • are the experts • Cultural • Context • Spanish- • speaking • environment • Low level • of employee • education • New plant • facility • Road • Blocks • Workers • did not • anticipate • roles as • decision • makers • Initial • language • barrier • Reported • Outcomes • Increased worker • participation • Higher employee • morale • Expected 8% • increase in output • per employee per • year • 50% of all • employees in • specialized positions • have since earned • degrees • Advances as • workplace led to • model GE plant • abroad

14. Managing Organizational Change and Development General Electric Work-Out: A Comparative Summary GE Businesses Aircraft Engines, Lynn, Mass. • Implementation • Process • General Work- • Out session • Employee • empowerment • Problems with raw • materials from • supplier-bad • screw bit heads • Cultural • Context • Standard • assembly line • atmosphere • Apathetic • management • skeptical • employees • Managers • committed to • philosophy of • Work-Out • (management • buy-in) • Road • Blocks • Management • nervous • about • spending • money to • solve • problems • “Walking • the Talk” • requires full • commitment • Reported • Outcomes • Middle manager • and line worker • chartered plane to • headquarters of the • supplier • Raw materials • (screws) now • conform 100% to • specifications • Employee • empowerment • Additional employee • participation has led • to other production • highs-jet engine • produced in 4 • weeks as opposed • to 30 weeks

15. Managing OrganizationalChange and Development General Electric Work-Out: A Comparative Summary GE Businesses Aerospace Syracuse, New York • Implementation • Process • General Work- • Out session • Employee • participation in • enhancing • production process • Production control • by employees-they • are the experts • Cultural • Context • Skepticism by • employees-just • another band- • aid • Skepticism • by middle • management • Road • Blocks • Employee • attitudes • Management’s • initial • resistance • Reported • Outcomes • 100% compliance to pollution • regulations • Production of • hazardous waste • materials fell from • 759 ton in 1990 to • 375 tons in 1991 • Team: committed to getting the word • out on the • importance of • pollution control

16. THEORY ORIENTATION IN OD&C • THE LITERATURE MAKES DISTINCTION BETWEEN TWO TYPES OF CHANGE: 1ST ORDER AND 2ND ORDER • FIRST-ORDER CHANGE CONSISTS OF MINOR IMPROVEMENTS AND ADJUSTMENTS THAT DO NOT CHANGE THE SYSTEM CORE • SECOND-ORDER CHANGE (TRANSFORMATIONAL) IS DEFINED AS CHANGE IN CORE ORGANIZATION PROCESSES (I.E., ORG STRUCTURE, IMPLEMENTING NEW IT SYSTEM,..), IN MISSION & PURPOSE AND, IN CULTURE.

17. THREE PERSPECTIVES ON CHANGE (Ackerman, 2001) • I. DEVELOPMENTAL CHANGE – IMPROVEMENT OF WHAT IS. • II. TRANSITIONAL CHANGE – IMPLEMENTATION OF A KNOWN NEW STATE. MANAGEMENT OF THE INTERIM TRANSITION STATE, OVER A CONTROLLED PERIOD OF TIME. • III. TRANSFORMATIONAL CHANGE – EMERGENCE OF A NEW STATE, UNKNOWN UNTIL IT TAKES SHAPE, OUT OF THE REMAINS OF THE CHAOTIC DEATH OF THE OLD STATE. TIME PERIOD NOT EASILY CONTROLLED.

18. CHANGE PROGRAMS CAN BE EXAMINED BY ADDRESSING THREE BASIC QUESTIONS: • WHY – THE DRIVEN FORCES OF THIS TYPE OF CHANGE • HOW – THE PHASES/STAGES AND PROCESS CHARACTERISTICS OF THE CHANGE • WHAT – THE CONTENT OF THE CHANGE

19. CLUSTERING OF PLANNED CHANGE PROGRAMS: HOLISTIC, FOCUS AND LIMITED (Mitki, Shani & Stjernberg, 1999)

21. Planned Change Models

22. Lewin’s Change Model Unfreezing Movement Refreezing

23. Context & Purpose • Diagnosing • Evaluating Planning • Action Action • Taking • Action • The Action Research Cycle (Modified from Coghlan & Brannick, 2005)

25. INTERVENTIONS

26. Definition of Interventions • To intervene is to enter into an ongoing system of relationships, to come between or among persons, groups, or objects for the purpose of helping them. • An OD intervention refers to the range of planned, programmatic activities intended to help the organization increase its effectiveness. • Interventions purposely disrupt the status quo.

27. OD&C INTERVENTIONS • AT THE CORE OF MOST OD&C INTERVENTIONS ONE CAN FIND TWO COMPONENTS: • ACTION RESEARCH • ORGANIZATIONAL LEARNING

28. Action Research • Action Research - one of the many streams of Collaborative Research - is an emergent and systematic inquiry process, embedded in a true partnership between researchers and members of a living system, in which behavioral, social, organizational and management scientific knowledge is integrated with exiting organizational knowledge for the purpose of generating actionable knowledge.

29. Action Research • At the most basic level, Action Research is viewed as: • A partnership among a variety of individuals forming a “community of inquiry” • An emergent inquiry process that differs from the notion of scientific research as a closed, linear, and planned activity

30. ACTION RESEARCH: SOME KEY FEATURES AND COMMON DENOMINATORS • AR occurs in natural setting, focus on specific issues • AR involves ‘research’ and ‘action’ partnership between researchers and practitioners • AR involves the action researcher/s first hand • AR involves mutual education • AR involves the creation of a learning mechanism • AR develops self-help competencies • AR strives for systems development • AR lays the foundation of a learning community • AR generates valid and actionable knowledge

31. ORGANIZATIONAL LEARNING • Organizational learning is a system of principles, activities, processes, and structures that enable an organization to realize the potential inherent in the knowledge and experience of its human capital. • Organizational learning incorporates all the activities and processes taking place on the individual, team, and organizational levels. • Schein argues that at least three distinctly different types of learning exist: knowledge acquisition and insights (cognitive learning), habit and skill learning, and emotional conditioning and learning anxiety. • The concept of a learning organization, then, appears to focus more on the “what,” while the concept of organizational learning concentrates on the “how.”

32. LEARNING MECHANISMS • During the 1990s the focus on Learning Organization, Organization Learning and Learning Capability seems to have taken a center stage in the MGT literature • Recent lit review reveals over 1500 citations • The literature is inconclusive in terms of definitions and findings

33. LEARNING MECHANISMS (2) • Learning Mechanisms are defined as the conscious, planned proactive features that enable and encourage organizational learning. • As such, LM are vied as the formalized strategies (policies, structures, procedures, rules, processes, methods, and tools) that are created within the firm for the purpose of enhancing learning. • The literature of LM identifies three focuses: Cognitive, Structural and Procedural.

34. LEARNING MECHANISMS (3) • Cognitive or cultural mechanisms (CMs) are the bearers of language, concepts, symbols, theories, frameworks, and values for thinking, reasoning, and understanding with the new capabilities. • CMs are management’s main means for creating an understanding among all employees on the character, need, and priority. • CMs include company values and mission statements, strategy documents, policies and plans, management-union or company-partner joint agreements.

35. LEARNING MECHANISMS (4) • Structural mechanisms (SMs) are organizational, physical, technical and work system infrastructures that encourage practice-based learning. • SMs house and enable the collaboration and discourse required for collective learning of new practice. • SMs may include the following: • communication channels; • the establishments of lateral structures to enable learning of new practice across various core organizational units; • changes to the work organization; • formal and informal for joint exploration and debates; • learning specific structures such a parallel learning structures, bench-learning structures and process improvement teams.

36. LEARNING MECHANISMS (5) • Procedural Mechanisms (PMs) concern the rules, routines, methods and tools that can be institutionalized in the organization to promote and support learning. • PMs include: • Tests and assessment tools and methods • Standard operating procedures • Methods for specific types of collective learning, such as action learning or de-briefing routines • PMs may be within or cross organizational (such as ‘start conferences’, democratic dialogues, work-based dialogue, de-briefing procedures) allow participants to systematically learn from each other’s experience through reflection and encoding of new knowledge in new practices..

37. Typology of OD Interventions Based on Target Groups Interventions designed to improve the effectiveness of individuals • Life-and career-planning activities • Coaching and counseling • T-group (sensitivity training) • Education and training to increase skills, knowledge in the areas of technical task needs, relationship skills, process skills, decision making, problem solving, planning, goal setting skills • Grid OD phase 1 • Work redesign • Gestalt OD • Behavior modeling Source: W. L. French and G. H. Bell, Jr., Organizational Development, 5/E, 1995, p. 165. Reprinted by permission of Prentice-Hall, Inc., Englewood Cliffs, New Jersey.

38. Typology of OD Interventions Based on Target Groups Interventions designed to improve the effectiveness of dyads / triads • Process consultation • Third-party peacemaking • Role negotiation technique • Gestalt ODD Interventions designed to improve the effectiveness of teams and groups • Team building • - Task directed • - Process-directed • Gestalt OD • Grid OD phase 2 • Interdependency exercise • Appreciative inquiry • Responsibility charting • Process consultation • Role negotiation • Role analysis technique

39. Typology of OD Interventions Based on Target Groups Interventions designed to improve the effectiveness of teams and groups • “Startup” team building activities • Education in decision making, problem solving, planning, goal setting in group settings. • Team MBO • Appreciations and concerns exercise • Sociotechnical systems (STS) • Visioning • Quality of work life (QWL) programs • Quality circles • Force-field analysis • Self-managed teams

40. Typology of OD Interventions Based on Target Groups Interventions designed to improve the effectiveness of intergroup relationships • Intergroup activities - • - Process directed • - Task-directed • Organizational mirroring • Partnering • Process consultation • Third-party peacemaking at group level • Grid OD phase 3 • Survey feedback Interventions designed to improve the effectiveness of the total organization • Sociotechnical systems (STS) • Parallel learning structures • MBO (participating forms) • Cultural analysis • Confrontation meetings • Visioning

41. Typology of OD Interventions Based on Target Groups Interventions designed to improve the effectiveness of the total organization • Strategic planning / strategic management activities • Grid OD phases 4, 5, 6 • Interdependency exercise • Survey feedback • Appreciative inquiry • Future search conferences • Quality of work life (QWL) programs • Total quality management (TQM) • Physical settings • Large-scale systems change Source: W. L. French and G. H. Bell, Jr., Organizational Development, 5/E, 1995, p. 165. Reprinted by permission of Prentice-Hall, Inc., Englewood Cliffs, New Jersey.

42. The STS Planned Channel Process: A Flow Chart Entry, scanning, and contracting Formation of steering committee Analysis of business strategy, situation, and results Strategy formulation and vision statement Formation of the action research system Analysis Analysis Analysis of Analysis of of technical of social environmental organization subsystem subsystem subsystem subsystem Identification of potential changes towards joint optimization Assessment of proposed potential changes Recommendation for joint optimization Planning and execution of experimental implementation Assessment of implementation Planning and managing systemwide redesign

43. PARTIAL COMPARISON BETWEEN TQM, STS, AND BPR (1) TQM STS Reengineering Dimension I. Theoretical Roots II. Founders Statistical theory (SPC), system theory Deming, Crosby, Juran, Imai, Shewhart, Taguchi, Tshikawa Organization theory, applied social and behavioral sciences, system theory, production engineering Cherns, Cummings, Davis, Emery, Pasmore, Taylor, Thorsrud, Thrist Concurrent engineering, production engineering, practice-driven, system theory Champy, Davenport, Hummer

44. PARTIAL COMPARISON BETWEEN TQM, STS, AND BPR (2) TQM STS Reengineering Dimension III. Motto IV. Some basic principles and assumptions A set of ideas about radical redesign and change in business processes to achieve breakthrough results (major gains in cost, service, or time) Quantum leap in performance by focusing on key processes that really matter, emphasizing strong leadership, technology, and radical change A group of ideas and techniques directed toward enhancing competitive performance through the quality of products and processes A. Organizational Goals: Serving customers’ needs to fullest extent possible by supplying goods and / or services of highest quality A set of design principles, ideas, and change processes that strive toward best match between organizational, technical, environmental, and social subsystems Joint optimization of social, technical, and environmental systems

45. PARTIAL COMPARISON BETWEEN TQM, STS, AND BPR (3) TQM STS Reengineering Dimension IV. Some basic principles and assumptions B. Time Orientation:Dynamic Philosophy of incremental and continuous improvement. Short and long term perspectives. C. Coordination and control: Coordination through process action groups (cross functional). Both control and coordination exercised by managers and employees. Dynamic Philosophy of innovation, organizational learning, and continuous improvement. Long term perspective. Coordination and control through self-managed groups (autonomous work groups). Both control and coordination exercised by managers and employees. Dynamic Philosophy of radical and rapid changes. Short term cycle to achieve desired results. Coordination and control by reengineering teams, process owner, and steering committee. Both control and coordination exercised mainly by managers.

46. PARTIAL COMPARISON BETWEEN TQM, STS, AND BPR (4) TQM STS Reengineering Dimension IV. Some basic principles and assumptions D. Work Design: System-based optimization guided by specific design principles. Formation of temporary process action teams. E. Technology Technology may be a key factor in quality improvement. System-based joint optimization guided by specific work design principles. Formation of functional organic teams. Technology is a fundamental factor in work design. System-based approach guided by key design processes. Formation of process teams. Processes’ customers are an integral part of the system.

47. PARTIAL COMPARISON BETWEEN TQM, STS, AND BPR (5) TQM STS Reengineering Dimension IV. Some basic principles and assumptions External customers and suppliers are important but are not part of the system. Individual- and team-based. Processes’ customers are an integral part of the system. Individual- and system-based. F. Customer and Suppliers Orientation Internal and external customers and suppliers are integral parts of the system. G. Rewards: Individual-, team-, and system-based.

48. PARTIAL COMPARISON BETWEEN TQM, STS, AND BPR (6) TQM STS Reengineering Dimension V. Management of Change A. Change Orientation: Led by management and/or Quality Council. The effort is mostly guided by ISO 9000 and/or some combination of specific guidelines provided by quality experts. Change process led by design team or parallel learning structure. The effort is guided by a modified action research philosophy. The change is led by top management and the steering committee. The effort is guided by the process owner and reengineering (processes design) teams.

49. PARTIAL COMPARISON BETWEEN TQM, STS, AND BPR (7) TQM STS Reengineering Dimension V. Management of Change B. Change Phases, Mechanisms, and Processes: Broadly defined deductive-based phases and basic activities. Team learning and system learning mechanisms. C. Methods and Tools: Quality planning (Hoshin planning). Identifying customers and suppliers (both internal and external) and determining needs. SPC. Clearly defined deductive-based phases, processes, and activities. Team and learning based mechanisms. Environmental, technical, and social analysis. Variance and deliberation analysis. Experimentation with alternate design configurations. Clearly defined inductive-based phases. Information technology is a key element in team process learning. Competitive and customers’ needs analysis. Identification of processes that require radical improvements based on specific criteria.

50. PARTIAL COMPARISON BETWEEN TQM, STS, AND BPR (8) TQM STS Reengineering Dimension V. Management of Change C. Methods and Tools: Develop a process that can produce the quality required. Quality based systemwide diffusion. Systemwide diffusion. Broad understanding of current processes. Radical systemwide or subsystem-based diffusion.