Organization Development Professor Alexandre Ardichvili Module 3

Topics and Activities for Session 3 Definition of Organization Development (OD) OD and planned change models vs. other forms of organization change Roots of OD Introduction to the planned change model (action research model) Types of OD interventions Case study Video cases 1-2

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. Cummings & Worley 9e, (c) 2008 South- Western/Cengage Learning 1-3

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. Cummings & Worley 9e, (c) 2008 South- Western/Cengage Learning 1-4

Discuss: What is OD? Provide your definition Is OD practiced in Brazilian organizations? Can you share any examples?

Organization Development is defined as the system-wide application and transfer of behavioral science knowledge to the planned development, improvement, and change of strategies, structures, and processes that lead to organizational effectiveness (Cummings & Worley, 2009)

Cummings & Worley 9e, (c) 2008 South- Western/Cengage Learning 1-7 Human Process Interventions Interpersonal & Group Process Approaches Organization Process Approaches Human Process Interventions Interpersonal & Group Process Approaches Organization Process Approaches Techno- structural Interventions Restructuring Organizations Employee Involvement Work Design Techno- structural Interventions Restructuring Organizations Employee Involvement Work Design Human Resources Management Interventions Performance Management Developing Talent Managing Work- force Diversity & Wellness Human Resources Management Interventions Performance Management Developing Talent Managing Work- force Diversity & Wellness Strategic Interventions Transformational Change Continuous Change Transorganization- al Change Strategic Interventions Transformational Change Continuous Change Transorganization- al Change Special Topics in Organization Development Organization Development OD in Nonindustrial Future Directions in Global Settings Settingsin OD

Models of Planned Change Lewin’s Model (Unfreeze, Move, Refreeze) Positive Model Action Research Model

Lewin’s Change Model Cummings & Worley,9e (c) 2008 South- Western/Cengage Learning 2-9 Unfreezing Movement Refreezing

Action Research Model Cummings & Worley,9e (c) 2008 South- Western/Cengage Learning 2-10 Feedback to Client Data gathering after action Problem Identification Joint action planning Consultation with a behavioral scientist Data gathering & preliminary diagnosis Joint diagnosis Action

Cummings & Worley,9e (c) 2008 South- Western/Cengage Learning 2-11 Initiate the Inquiry Inquire into Best Practices Discover Themes Envision a Preferred Future Design and Deliver Ways to Create the Future Positive Model

Cummings & Worley,9e (c) 2008 South- Western/Cengage Learning 2-12 General Model of Planned Change Evaluating and Institutionalizing Change Planning and Implementing Change Diagnosing Entering and Contracting

McGregor’s Theory X & Theory Y Theory X: Managers assume that people: Have a genuine distaste for work; Therefore: Must be prodded, coerced or threatened into work Prefer to be closely supervised; Avoid as much responsibility as they can Have little ambition; Value security above all else Theory Y: Leaders assume that people: Want to work Will exercise self-control if they are committed to the results Will be motivated to achieve goals if they value the outcomes to be achieved Have imagination & creativity (these are not traits reserved for those in leadership positions) Are capable of realizing more potential than are typically given

The Organization Development Practitioner Internal and External Consultants Professionals from other disciplines who apply OD practices (e.g., TQM managers, IT/IS managers, compensation and benefits managers) Managers and Administrators who apply OD from their line or staff positions Cummings & Worley, 9e (c) 2008 South-Western Cengage Learning 3-14

Competencies of an OD Practitioner Intrapersonal skills – Self-awareness Interpersonal skills – Ability to work with others and groups General consultation skills – Ability to manage consulting process Organization development theory – Knowledge of change processes Business knowledge Research methods Cummings & Worley, 9e (c) 2008 South-Western Cengage Learning 3-15

Flawless Consulting (Peter Block) Partnering with clients Developing commitment for change Acting authentically Trusting yourself and your experience

Action Research Model Entry Start-up Assessment and Feedback Action Planning and Change Management Intervention Evaluation Adoption Separation

Entry Take 3 minutes to write down answers to these questions: What are the important activities on the entry stage? What are some important issues to be mindful of at this stage? Share your thoughts with the large group.

The Entry Process Clarifying the Organizational Issue – Presenting Problem – Symptoms Determining the Relevant Client – Working power and authority – Multiple clients – Specify the mission for the project Cummings & Worley, 9e (c) 2008 South- Western/Cengage Learning 4-19

Interpersonal Issues of Entry Client Issues – Exposed and Vulnerable – Inadequate – Fear of losing control OD Practitioner Issues – Empathy – Worthiness and Competency – Dependency – Over identification Cummings & Worley, 9e (c) 2008 South- Western/Cengage Learning 4-20

Types of Clients Contact clients: approach the consultant initially Intermediate clients: get involved in early meetings, provide some information Primary clients: own a problem for which they need help Ultimate clients: may or may not be directly involved with the consultant, but their welfare and interests must be considered in planning the interventions Shein (1988)

Proposal: Questions to Consider What is the organization after? How deep does the problem go? How many people & levels will be touched? What kind of organizational culture exists? Who are the decision makers? Are there differences of opinion in the firm? Has the firm used consultants in the past?

Starting an Action Research Project Begins when contract is signed Building working relationships Becoming oriented to client’s world Complete preliminary diagnostic scan Develop project plan

Information Gathering and Analysis Brainstorm a list of all things you need to know about the problem (Q: What information would you need to collect in the Falcon case?) Prioritize the list (Use the Pareto rule: 80/20) Think how you can collect data about the things you need to know (Falcon Case)

Information gathering: find the real problem and facts Literature search: published company and industry information; government sources Document review: – Internally generated: mission statements and related materials, financial statements, org. charts, operating plans, operating manuals and procedures books, job task analysis reports, safety procedures handbooks – Externally generated: banks, auditors, government offices (OSHA, EPA, etc.), but circulated within the company

Information gathering (cont.) Interviews: – internal personnel directly and indirectly related to project, – internal personnel unrelated to project, but who may have insights into it, – external stakeholders: customers, suppliers, investors Surveys: internal and/or external stakeholders; standardized or created by you Direct observation Other, non-related information

Analysis Qualitative and quantitative Qualitative--content analysis : - comparing individual answers to the same question - thematic analysis: identify common themes Quantitative: statistical analysis of survey results. Caution: are the “significant” topics really significant? Use the Pareto principle in your analysis Develop sketches, cause-effect diagrams, and flow charts to analyze the situation Ask: why? why? why? why? why?

Techniques for Analyzing Data Qualitative – Content Analysis – Force-Field Analysis Quantitative – Descriptive statistics – Correlations – Differences between groups

Cummings & Worley, 9e (c) 2008 South- Western/Cengage Learning 7-29 Competition from other groups Supervisor pressures Group performance norms Better raw materials New technology Well-learned skills Member complacency Fear of change Force-Field Analysis of Work Group Performance Forces for Change Forces for Status Quo Current Performance Desired Performance

Organizational Diagnosis Three levels: – organization-wide – group – individual job Using systems thinking – Inputs – Design Components (Process/Transformation) – Outputs

Organization Level Diagnosis Inputs – External environment – Industry Structure Design Component: Strategic Orientation – Strategy (Mission, Goals/Objectives, Intent/Policies) – Organization Design (Core Activities, Structure, Measurement, HR, Culture) Outputs – Org. Performance – Productivity – Stakeholder Satisfaction

Cummings & Worley, 9e (c) 2008 South- Western/Cengage Learning 5-32 Organization-Level Diagnostic Model Inputs Technology Strategy Structure HR Measurement Systems General Environment Industry Structure Design Components Culture Organization Effectiveness Outputs

Key Alignment Questions Do the Design Components fit with the Inputs? Are the Design Components internally consistent? Do they fit and mutually support each other? Cummings & Worley, 9e (c) 2008 South- Western/Cengage Learning 5-33

Organization Design Components Strategy – the way an organization uses its resources (human, economic, or technical) to gain and sustain a competitive advantage Technology – the way an organization converts inputs into products and services Structure – how attention and resources are focused on task accomplishment Cummings & Worley, 9e (c) 2008 South- Western/Cengage Learning 5-34

Organization Design Components Human Resource Systems – the mechanisms for selecting, developing, appraising, and rewarding organization members Measurement Systems – methods of gathering, assessing, and disseminating information on the activities of groups and individuals in organizations Cummings & Worley, 9e (c) 2008 South- Western/Cengage Learning 5-35

Outputs Organization Performance – e.g., profits, profitability, stock price Productivity – e.g., cost/employee, cost/unit, error rates, quality Stakeholder Satisfaction – market share, employee satisfaction, regulation compliance Cummings & Worley, 9e (c) 2008 South- Western/Cengage Learning 5-36

Alignment Diagnosis involves understanding each of the parts in the model and then assessing how the elements of the strategic orientation align with each other and with the inputs. Organization effectiveness is likely to be high when there is good alignment. Cummings & Worley, 9e (c) 2008 South- Western/Cengage Learning 5-37

Cummings & Worley, 9e (c) 2008 South- Western/Cengage Learning 6-38 Goal Clarity Task Group Structure Functioning Group Performance Composition Norms Group-Level Diagnostic Model InputsDesign ComponentsOutputs Organization Design Group Effectiveness

Group-level Diagnosis Inputs – Organization Design Design Components – Goal Clarity, Task Structure, Group Composition, Group Norms, Team Functioning Outputs – Team Effectiveness, as measured by: Quality decisions, productivity, team cohesiveness, etc.

Group-Level Design Components Goal Clarity – extent to which group understands its objectives Task Structure – the way the group’s work is designed Team Functioning – the quality of group dynamics among members Group Composition – the characteristics of group members Performance Norms – the unwritten rules that govern behavior Cummings & Worley, 9e (c) 2008 South- Western/Cengage Learning 6-40

Group-Level Outputs Product or Service Quality Productivity – e.g., cost/member, number of decisions Team Cohesiveness – e.g., commitment to group and organization Work Satisfaction Cummings & Worley, 9e (c) 2008 South- Western/Cengage Learning 6-41

Job-level Diagnosis Inputs – Org. Design, Group Design, Personal Characteristics Design Components – Skill variety, task identity, task significance, autonomy, feedback about results Outputs – Individual effectiveness, as measured by: performance, absenteeism, job satisfaction, personal development, etc.

Cummings & Worley, 9e (c) 2008 South- Western/Cengage Learning 6-43 Skill Variety Task Identity Autonomy Task Feedback Significance about Results Individual-Level Diagnostic Model InputsDesign ComponentsOutputs Organization Design Group Design Personal Traits Individual Effectiveness

Individual-Level Design Components Skill Variety – The range of activities and abilities required for task completion Task Identity – The ability to see a “whole” piece of work Task Significance – The impact of work on others Autonomy – The amount of freedom and discretion Feedback about Results – Knowledge of task performance outcomes Cummings & Worley, 9e (c) 2008 South- Western/Cengage Learning 6-44

Individual-Level Outputs Performance – e.g., cost/unit, service/product quality Absenteeism Job Satisfaction – e.g., internal motivation Personal Development – e.g., growth in skills, knowledge, and self Cummings & Worley, 9e (c) 2008 South- Western/Cengage Learning 6-45

Data Feedback Purpose of Feedback – create energy – direct energy – turn energy into action

Cummings & Worley, 9e (c) 2008 South- Western/Cengage Learning 8-47 Possible Effects of Feedback Feedback occurs What is the direction of the feedback? Is the energy created by the feedback? No Change Do structures and processes turn energy into action? Change Failure, frustration, no change Anxiety, resistance, no change Energy to use data to identify and solve problems Energy to deny or fight data NO YES NO YES

Determining the Content of Feedback Relevant Understandable Descriptive Verifiable Timely Limited Significant Comparative Unfinalized Cummings & Worley, 9e (c) 2008 South- Western/Cengage Learning 8-48

Kirkpatrick’s Levels of Evaluation 1.Reactions. (At point 3 mostly). "Reaction may best be defined as how well the trainees liked a particular training program." (Kirkpatrick, 1959) 2.Learning. (At points 1,2,3) "What principles, facts, and techniques were understood and absorbed by the conferees?“ (Kirkpatrick,1960)

Kirkpatrick’s Levels of Evaluation 3. Behavior. Changes in on-the-job behavior. (No formal definition). (At point 4). 4. Results. "Reduction of costs; reduction of turnover and absenteeism; reduction of grievances; increase in quality and quantity or production; or improved morale which, it is hoped, will lead to some of the previously stated results." (Kirkpatrick, 1959). (At point 4).

Questions to Ask at Each of the Levels Level 1 (Reaction): Were the participants pleased? What do they plan to do with what they learned? Level 2 (Learning): What skills, knowledge, or attitudes have changed? By how much? Level 3 (Behavior): Did the participants change their behavior based on what was learned in the program? Level 4 (Results): Did the change in behavior positively affect the organization?

Organization Change

Learning Objectives To understand the elements of a successful change program To understand the role of an OD practitioner in a change program To understand the process of institutionalizing OD interventions and the factors that contribute to it

OD Practitioner’s Role Three minute paper Write down: What are some major change management activities? What can an OD practitioner do to help an organization implement a change initiative?

Motivating Change Creating Vision Developing Political Support Managing the Transition Sustaining Momentum Effective Change Management Change Management Activities

John Kotter, Harvard

Motivating Change Creating Readiness for Change – Sensitize the organization to pressures for change – Identify gaps between actual and desired states – Convey credible positive expectations for change Overcoming Resistance to Change – Provide empathy and support – Communicate – Involve members in planning and decision making

Creating a Vision Discover and Describe the Organization’s Core Ideology – What are the core values that inform members? – What is the organization’s core purpose or reason for being? Construct the Envisioned Future – What are the bold and valued outcomes? – What is the desired future state?

“The single greatest weakness among business leaders is…. identifying and articulating a compelling vision.” - Corporate Leadership Council

Developing Political Support Assess Change Agent Power Identify Key Stakeholders Influence Stakeholders

Managing the Transition Activity Planning – What’s the “roadmap” for change? Commitment Planning – Who’s support is needed, where do they stand, and how to influence their behavior? Change-Management Structures – What’s the appropriate arrangement of people and power to drive the change?

Change as a Transition State Current State Transition State Desired Future State

William Bridges: “Managing Transitions”

Sustaining Momentum Provide Resources for Change Build a Support System for Change Agents Develop New Competencies and Skills Reinforce New Behaviors Stay the Course

Institutionalization Processes Socialization Commitment Reward Allocation Diffusion Sensing and Calibration

Indicators of Institutionalization Knowledge Performance Preferences Normative Consensus Value Consensus

OD Practitioner’s Role in Change Process What roles can OD practitioners play in change management?

OD Practitioner’s Roles Strategy and implementation: Help the organization to manage the change process (using Kotter’s steps or other models) Human systems: Work with employees to change their attitude towards change, provide empathy, support

OD Practitioner’s role “What do I do? I turn people’s anxiety into fear” Harry Woodward, Woodward Learning International

Definition of Anxiety (Wikipedia) “Anxiety is a generalized mood condition that can often occur without an identifiable triggering stimulus.moodstimulus As such, it is distinguished from fear, which is an emotional response to a perceived threat.”fear

Why Do People Resist Change? Why do you resist change? What are some of the reasons others resist change? What are some of the signs of resistance to change?

Why Do People Resist Change? Fear of losing: The safety of the familiar. Control. Structure. Relationships. Turf. The future. Meaning and identity.

Perceptions of Change (H. Woodward) Common view: OLDNEW More realistic View of Change: Same Loss Gain LOSS – Something we used to do that we don’t do anymore. GAIN – Something we’re doing that we haven’t done before.

Context Meeting Present the Model List and Answer – What things are staying the same? – What things will we lose? – What things will we gain? Additional Questions: What do we need to invent? What are the “new rules?” From now on we need to … Given the change, we should consider … We can no longer assume …