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

1. Cutting-Edge Organization Development:Emerging Practices in Leading Organization Change William J. Rothwell

2. Part I:Introduction

3. 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.

4. 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.

5. Workshop Organization

6. Part II:What Is OD?(A Brief Review)

7. 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.

8. How Does OD Differ from Other Change Management Approaches? • Coercive • Persuasive • Leadership change • Legalistic/policy • Dialectic • Education/changed norms (OD)

9. 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.

10. 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.

11. 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

12. 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

13. 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.

14. 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.

15. 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.

16. 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.

17. 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

18. 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.

19. 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.

20. 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.

21. 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.)

22. 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.

23. 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.

24. 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.

25. 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.

26. 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.

27. 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

28. 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.

29. 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.

30. 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.

31. 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.

32. 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.

33. 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

34. 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

35. 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

36. 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.

37. 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

38. 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.

39. 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.

40. 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.

41. 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.

42. Part III:What Key Trends and Issues Have Been Affecting OD in the Last Ten Years,and What Does the Future Hold in Store?

43. 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.

44. The Results of the Activity • First, let’s list the trends that you identified. • Then, let’s brainstorm on what those trends or issues mean for OD.

45. 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.

46. 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

47. 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

48. 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

49. Applications of Chaos Theory to Change • The future is often viewed as an extension of the past. • Today’s 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.

50. 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.