Cutting-Edge Organization Development:

Emerging Practices in Leading Organization Change

William J. Rothwell

Part I:

Introduction

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.

Workshop Objective OOn 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.

Workshop Organization

P art IV :Conclusion

P art III:What Key Trends and Issues Have Been Affecting OD

in the Last Ten Years, and What Does the Future Hold in Store?

P art II:What Is OD?

(A Brief R eview)

P art I:Introduction

Part II:

What Is OD?(A Brief Review)

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.

How Does OD Differ from Other Change Management Approaches?

CoercivePersuasiveLeadership changeLegalistic/policyDialecticEducation/changed norms

(OD)

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.

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.

What Model Guides OD?

1. Recognize an organizational problem

2. Hire a consultant

3. Investigate the organization

4. Collect information about the problem

5. Feed back information about the problem

6. Get agreement on the problem

7. Collect information about a solution

13. Implement the action plan

12. Get agreement on the action plan

11. Feed back information

10. Collect information on an action plan

9. Get agreement on the solution8. Feed back information about a solution

14. Evaluate results

15. Ensure acceptance

16. Have consultant depart

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

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.

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.

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.

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.

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

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.

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.

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.

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.)

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.

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.

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.

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.

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.

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

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.

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.

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.

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.

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.

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

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

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

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.

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

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.

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.

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.

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.

Part III:What Key Trends and Issues Have Been

Affecting OD in the Last Ten Years,and What Does the Future Hold in

Store?

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.

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.

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.

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

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

Overview of Key Themes in OD Over the Last Ten Years

OD

Cynicism

Spirituality

ReadinessFor Change

Values

Chaos Theory

ResistanceTo Change

Change Models

Communication Trust

Stress

Too MuchChange

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.

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.

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.

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.

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

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).

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.

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.

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.

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.

Techniques for Assessing Readiness for Change

Issues to consider when examining an organization’s 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.

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.

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.

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.

Models for Navigating Change EffortsAnother 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.

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.

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.

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.

Managing Cynicism About Change Recent research has also

focused around cynicism about change efforts in organizations.

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, andToward human nature in general.Source: Wanous, J. (2000). Cynicism about organizational change. Group & Organization Management, 25(2), 132-153.

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.

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.

Managing Cynicism About ChangeManage 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.

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.

The Importance of Communication During the Change ProcessFor communication to be successful, it must

be: Frequent Specific Open Credible Provided in many ways

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.

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

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

Handling Too Much Change Emotional factors in change should

be managed as much as the objective [management] issues.

Two authors have indicated that today’s 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.)

Summary

OD

Cynicism

Spirituality

ReadinessFor Change

Values

Chaos Theory

ResistanceTo Change

Change Models

CommunicationTrust

Stress

Too MuchChange

Your Thoughts

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