EVERYBODY BELONGS TO an organization of some sort. Those who work within these organizations are responsible for making sure these organizations run smoothly and achieve their goals. The efforts of groups, however, frequently fall far short of expectations. Even in the best of circumstances when group members are full of goodwill and best intentions, results do not always turn out as hoped.
Groups often are weighed down by ambiguous objectives, poor communications, internal dissention, suspect decision-making procedures, and subpar execution. Slowly, group members’ enthusiasm dissolves into frustration, fatigue, and despair. The embattled casualties of ruinous group dynamics either drop out or become discouraged, aloof observers. All but the mightiest and most resilient remain actively engaged and soldier on.
These tragically familiar outcomes of group processes are unfortunate because overcoming challenges and succeeding as a team can be an exhilarating experience. Exceptional group results do not arise easily, but they do occur. They occur in the arts, in sports, in charitable organizations, and in businesses. They should occur more frequently. The purpose of this book is to ensure that they do occur … in your organization.
Our way forward relies on a compilation of concepts, tools, and techniques that together comprise organization development (OD). OD is a summary term that includes both the approach to, and realization of, organizational improvements. Think of it this way: say you want to remodel your kitchen. The contractor you hire for the work will begin with an idea of what makes kitchens practical, functional, and aesthetically pleasing. They will start their work with an overall conception of design that includes an understanding of kitchen layouts and materials, and how foundational elements such as structural supports, electrical wiring, gas lines, and plumbing influence the configuration of the space and eventual build-out. Equipped with the appropriate diagnostic gear and tools, carpenters, electricians, and plumbers implement the design according to the detailed blueprints and project plan. OD encompasses each of these phases from concept design, through the procedures followed, to the instrumentation and tools required to transform ideas into reality. It is a big undertaking that applies to organizations as large as multinational companies and as small as work groups.
This book offers a practical guide to what you can do to make the organization in which you work or consult more successful. Our focus is on action: on helping you as an organizational educator, adviser, team member, or leader realize the potential of the group. We will not encumber you with theory or esoteric distinctions among concepts argued over by academics. Rather, we will stick to the main path and provide you with what you need to make the changes you want. In the process, we will take a few illustrious excursions to highlight our points through exhibits, historical references, and case studies.
What Is Organization Development?
The OD label stretches back to the mid- to late 1950s; however, the inception of OD predates that period by about twenty-five years. For aficionados of history, the OD term has been traced to work on group processes at Esso’s Bayway Refinery and to culture change at General Mills under the direction of OD pioneers Herbert Shepard, Robert Blake, Douglas McGregor, and Richard Beckhard.1 Nevertheless, once a name was affixed to the compendium of practices that became known as organization development, academics and practitioners tried to squeeze out the essence of OD by offering an assortment of definitions, despite the problems of shoehorning an immense field into a few words.
Not everyone completely agrees on the contours of OD. When you read the definitions in box 1.1, however, you can see that there are commonalities among them.2 Despite variations in emphases, then, these snippets provide a good feel of what OD is all about. We have extracted a few of the key concepts and offer these as the basic tenants of OD, without asserting that we have at long last settled all differences of opinion. We have highlighted words from our summation that serve as the headings to the ensuing sections where we say more about each. This is not a survey chapter. Those of you who are conversant in the field will have to have faith that the people and topics that you might have expected to encounter in an opening chapter will appear elsewhere in this book.
Box 1.1
Sample Definitions of Organization Development
OD is …
… a planned, organization-wide intervention managed from the top and designed to increase an organization’s effectiveness and health.
R. Beckhard
… a complex educational strategy intended to change beliefs, attitudes, values and structures of organizations so that they can better adapt to new technologies, markets, and challenges …
W. Bennis
… a process of fundamental change in an organization’s culture.
W. W. Burke
… a systematic process for applying behavioral science principles and practices in organizations to increase individual and organization performance.
W. French and C. Bell
… a body of concepts, tools, and techniques used in improving organizational effectiveness and ability to cope with change.
N. Margulies and A. P. Raia
… about building and maintaining the health of the organization as a total system.
E. Schein
OD is:
• a planned,
• collaborative method of
• organization change that is
• designed to enhance the health of the organization
• through the application of behavioral principles.
Importantly, OD is a theory-governed, evidenced-based discipline. OD is the distillation of science into practical organizational actions involving the agreeable merger between town and gown.
Before we dissect our definition further, one matter demands some clarification. The tidiness of our description does not convey the true messiness of change. Plans and projections always look lovely on paper where progress marches uninterruptedly onward from the starting line to the goal. Substantive organizational improvements never work like that. People who you thought would support change, do not, and vice versa. Ideas you thought would work, do not; ideas that you thought would not work, do. And so on. In any creative endeavor you will feel, on occasion, like you are going in circles like those loop de loops shown in figure 1.1. The process can be extremely frustrating to those unacquainted with weighty change initiatives that seem like they are going nowhere. The practitioner’s responsibility is to sensitize participants to the inevitable doubts that arise during a change effort and to ensure that temporary setbacks are natural parts of the process. Indeed, occasional setbacks and encounters with obstacles are the sine qua nons for innovation and progress.
Figure 1.1 The ups and downs of change: two steps forward, one step back.
Planned
In a sense, all change is planned in that it is goal-directed and intentional. Planned, in the hands of an OD practitioner, means having a holistic conception of a problem and an associated approach to change. “Planned” does not imply that all contingencies can be known in advance nor does it annul the fact that important changes can spontaneously arise from the shop floor. Rather, planned means that when OD is called upon to intervene, it enters with a particular value orientation, understandings (e.g., of group processes), and perspective.
H. L. Mencken is said to have remarked that for every complex problem there is a solution that is quick, simple, and wrong. This adage is true because the right solution is seldom the one right next to the problem or because the solution creates new, unexpected problems. For example, societies may decide to reduce drug usage by effectively controlling the inflow of drugs into their countries; a successful program may reduce drug usage but the higher priced drugs resulting from scarcity may drive up users’ need for cash and, consequently, crime rates. Incentivizing the recycling of plastics lowers costs, which in turn generates more plastics. Similarly, a pay-for-performance program may increase the desired productivity but also reduce quality and adherence to safety protocols given people’s quest to hit quantitative goals. These results occur because most everything is connected to something else and disturbances in one place have effects in another. For example, when two power lines failed in Oregon, eleven U.S. states and two Canadian providences—and seven million customers—subsequently lost electricity for sixteen hours.3 If everything was simple, we would have found solutions to everything by now.
To plan interventions, an OD practitioner needs the equivalent of a global positioning satellite for guidance. In the case of organizations, the map used to navigate through problems to a resolution is a little fuzzy because it is ever changing: not so much in flux that the way forward is unrecognizable, but enough to remind us that we are not dealing with a static system. And “system” is the operative word. In contrast to mechanistic views of organizations in which pulling a problem-lever invariably, in gear-like fashion, leads straight to a solution-solved response, OD consultants’ plans and approaches are based on the well-founded premise that organizations are complex systems.
A system is an interconnected set of elements that sensibly combine to perform a function or fulfill a purpose. Box 1.2 provides the kinds of questions that systems’ thinking invites.4 Look around and you will see systems everywhere. A city is a system with transit, residences, parks, businesses, schools, and arts centers organized to make it an attractive place to work, live, and play. The local football team is a system with people organized in a way to maximize its own team’s points and minimize the points of an opponent. Organizations are systems in which structures, such as functional units, are linked together through internal processes. Our bodies, too, are systems.
Box 1.2
Questions to Ask for Systems Thinking
1. What external forces affect the system of interest?
2. What does the system require to remain vital and operationally effective?
3. How are inflows into the system controlled?
4. What feedback mechanisms are in place to let you know if, for example, you are moving too fast (slow) or producing too much (little)?
5. Are the people and technologies well aligned?
6. Are internal connections among different parts of the organization weak or strong?
7. Is the way you are operating having any unexpected or unintended consequences?
8. How do you exchange materials, information, and goods with other systems?
9. What are the system’s key outputs?
10. What aspects of the system are most vulnerable to breakdown, failure, and disruption?
A system is a set of connected parts working together to form a complex whole. For most systems to function properly, its interdependent mechanisms must be able to adjust to changes in the environment that envelops the system.
Our bodies are composed of many components, or elements, each performing a unique function that, taken together, make us the living creatures that we are. The system falters when a part goes bad because of its intimate ties to other parts. The human body is a perfect example of a highly connected system because we have few internal parts that we can do without. For example, removing a problematic heart without a replacement is not a good option. Moreover, fixing a part may not be the solution because the real problem may lie elsewhere in the system. For example, an organization may attribute unusually high turnover rates to compensation that is too low but find that increased wages do not thwart turnover because the real causes have more to do with management styles and poor opportunities for employee growth.
We have provided a prototypical depiction of a system in figure 1.2. The illustration shows that systems have interconnected parts that are embedded in environments from which the system gives and takes. These exchanges with the external world may be things such as information, raw materials, and manufactured goods. We will explore several aspects of systems throughout the book, but the following principles are worthy of early mention.
Figure 1.2 Basic elements of a system. Gap analyses often produce misleading information because they focus on a part of the system to the exclusion of the whole.
• The whole is greater than the sum of the parts: This axiom means that something qualitatively different emerges when all the parts are combined. The whole behaves nothing like the individual parts themselves. Therefore, it is difficult to infer the essence of the whole by examining individual parts. We can liken this property of systems to the tale of the six blind men who are asked to describe an elephant only by touching one of its parts (e.g., tusk, trunk, leg). Naturally, the blind men disagree on what the elephant looks like. OD consultants, therefore, contemplate the whole of an entity and recognize that its effective operation depends on organizational parts, such as functions or departments, performing in a coordinated manner.
• Systems can be open or closed: An open system relates to its environment. It takes in information, energy, and materials and then transforms these inputs and returns them to the environment (usually to customers in the case of organizations) as useful outputs. Systems that are open change their behavior to regulate the balance between inflows and outflows based on the all-important guidance of feedback, as shown in figure 1.3. In contrast, closed systems are not affected by influences outside of themselves. The system is relatively unresponsive to the environment because of the lack of communication. An uncommunicative system that is insensitive to changes in the environment cannot survive unless an external source, such as a benevolent government agency or good-hearted donor, are true believers in lost causes. The distinction between open and closed systems has been likened to throwing a lump of coal versus a live bird, even if the latter had identical chemistry and weight as the former. The trajectory of the coal is determined by its initial conditions, whereas the bird has an internal apparatus that will respond to external conditions once in flight.5 Most organizations (systems) are never completely open or closed although, as Alan Turing observed a half century ago, new complex behavioral patterns will emerge only in systems that are knocked out of their equilibrium (i.e., are open).6 Indeed, organizations will only be able to chart new directions when they have due appreciation of external realities and are aware of the necessities of change.
• System solutions are indeterminate: The general systems’ literature calls this aspect of systems “equifinality.” It means that there is more than one way to skin a cat and many roads that lead to Rome. More directly, complex problems have many possible solutions, several of which could reasonably qualify as “correct.” The sorts of problems that have multiple, viable pathways to their resolution are called “wicked.”
Figure 1.3 Simple model of system flows. Water levels in the tank are regulated by expanding or compressing inflows, or by expanding or compressing outflows based on feedback on water levels in the tank and barrel.
In the 1960s, following NASA’s technical triumph of landing an astronaut on the moon, the University of California–Berkeley sponsored a seminar series that explored whether technology could be transferred and applied to resolve social issues such as the major urban disturbances that were occurring at the time. One professor, Horst Rittel, explained that certain kinds of problems are altogether different and unrelatable. Some, like a moon shot, follow a direct, predictable path to a destination that one could conclude is right or wrong or true or false: Did the astronauts land on the moon? In contrast, many large social problems, such as alleviating civil unrest, have no clear problem formulation without considerable deliberation and agreement, are open to several feasible routes of execution, and have no standard for right or wrong answers (just good or bad, better or worse). Additionally, solutions to these wicked problems typically create new problems: in fact, some systems’ experts would argue that every problem is the result of a solution.7 The automobile helped to solve our need for accessible transportation at the turn of the twentieth century, but the decision to use gas versus alternative fuel sources (e.g., steam) contributed to the deleterious buildup of greenhouse gases in our atmosphere—a problem we were smart enough to create but have not been smart enough to fix. Most problems in organizations are wicked problems, and OD practitioners are looking for ways to make systems better rather than futilely searching for the one perfect mixture of a system’s chemistry that will yield the optimal system-level results, now and for always.
• Systems will not grow indefinitely: Managers in organizations, analysts, and pundits speak about organizations as if they will go on forever, but systems reach capacities or limits beyond which the system becomes fallible (unless checked by a self-correcting mechanism as when we sweat to cool down when our bodies get too hot). Take a city, for example. If the most desirable city in the world attracted an unprecedented number of people, the beguiling elements of that system would start to lose their value because the increases in population may, for example, overload services, such as public transportation, and create new unforeseen problems, such as frustratingly scarce tickets at local attractions and events. Systems create their own limits if growth is unrestrained. Similar results occur in the natural ecosystem when, for example, the Canadian Lynx decimate the snowshoe hare population and then starve (the hares then return, and the cycle continues). Organizations, therefore, will sometimes set their own limits as W. L. Gore, a global manufacturer of polymer-based products, does; they believe that businesses become unduly bureaucratic when they reach a certain size and, therefore, break up units that become too large. Indeed, some think that unduly large organizations are fertile grounds for toxic bosses, personal indignities, internecine warfare, operational complacency, and strategic dogma. Therefore, growth can seed companies’ decline.8 Miller likens the dangers confronted by onetime high-flying companies to the fall of Icarus whose cleverly crafted wax and feather wings were both his salvation (from being imprisoned) and his demise when he flew too close to the sun and the wax on his wings melted. (This decline following a rise to preeminence is called the Icarus paradox.)
• Systems exist within systems within systems: The graphic in figure 1.3 omits an important feature of systems. Systems are nested within other systems. People are systems who belong to families; these families live in neighborhoods, towns, states, countries, and so on to the ends of the universe. There is no limit to how small or how large systems can be. You have to draw the line and establish a boundary somewhere, however, for your intervention. The nature of the issue and associated change effort likely will dictate the logical contours of the problem.
Organizations also have systems that overlay one another. Just as the human body has multiple systems (e.g., circulatory, endocrine), organizations have multiple systems as well. OD is concerned specifically with two major systems: the social and technical systems of organizations.9 The social system consists of the people of the organization: what they know and can do, the relationships they have, and the culture they work within. The technical system is made up of those features of the organization that are associated with flows involving the tools, techniques, technologies, and processes that are used to store and transport goods and information.
The ideas behind sociotechnical systems, the combination of the two systems, had their origin in the coal mines of the United Kingdom. New automation involving longwall methods of mining (blocks of coal are cut and put on conveyor belts) were introduced that allowed work to be disaggregated and reconfigured. This automation provided researchers (Eric Trist and others) a chance to experiment with work arrangements that were more consistent with the new processes being introduced.10
Traditionally, work in the mines was highly specialized with each miner performing a certain task. Trist reorganized the work in a manner that we would describe today as autonomous work teams. This involved transferring decision-making authority for tasks, assignments, and schedules to newly formed units that became responsible for meeting production quotas. The central aim was to structure the work in a way that was responsive to the underlying technology and afforded miners the discretion to organize work and the flexibility to adjust routines and team roles in the manner they thought best.
The experiment was a success. Results showed increases in both productivity and worker satisfaction. These outcomes were replicated two decades later at the Rushton coal mine, a small, privately held mine located in central Pennsylvania.11
A goal of OD is to ensure that the social and technical systems of an organization are jointly optimized: they mix in a manner that satisfies human needs and delivers the best, workable organizational results. An illustration of incongruence between the social and technical systems is nicely portrayed in the famous chocolate scene from I Love Lucy in which a conveyor belt of chocolates exceeds Lucy’s and Ethel’s ability to keep pace in wrapping the candies.12 The results would have been better—but less funny—if the plant had slowed the conveyor belt to levels that accommodated the number and skills of the people on the line. This scenario highlights another important point about systems. The best organizational results under given conditions are not necessarily achieved through the optimization of each individual system. Superior outcomes at the organization (system) level are products of the sober alignment of social and technical systems and not their separate and individual optimization.
Although the topic is outside the purview of this book, OD practitioners and policy makers increasingly will have to contend with the effects of automation on the labor force. Technology introduces new opportunities into the workplace, but it eliminates others. A recent analysis showed that of seven hundred jobs examined, almost half will be outdated within twenty years and be supplanted by automated systems.13 The atrophying of skills coupled with increased automation may partly be responsible for a dwindling eligible labor pool. Currently, 37 percent of people sixteen years old and older in the United States have exited the workforce and are not looking for work. This withdrawal has been most acute among prime work-age individuals, twenty-five to fifty-four, especially men without college educations. Indeed, the decline in workforce participation over the past twenty years has been the steepest in the United States when comparing all member countries of the Organization for Economic Cooperation and Development.14 Economists offer other reasons for the decline in addition to changes in automation, such as dramatically falling real wages and failing or unstable marriages that reduce familial incentives for work. Nevertheless, educational systems and organizations will need a cogent response to the persistent decrease of a skilled workforce.
It is impossible to trace the beginning of OD to a single person, place, or time. (Although, we have included an overview of key people and their associated works during the early days of OD in box 1.3). Rather, OD was a gradual outgrowth of working conditions during the period of industrialization from the latter part of the nineteenth century to the Second World War. The conditions were harsh, job security unstable, the wages low, and the hours long. Most of the larger factories at the turn of the century were in forbidding, highly physical industries, such as meat packing, railroad construction, and iron and steel. Today, we forget that the celebrated monuments of industrialization, such as the Hoover Dam (1931–1935), were sites to many work-related fatalities (ninety-six people died building the Hoover Dam) and considerable employer–employee strife.
Box 1.3
Selected Works in the Formative Years of OD
| 1933 |
Elton Mayo |
|
| The Human Problems of an Industrial Civilization |
| 1938 |
Chester Bernard |
| The Functions of the Executive |
| 1939 |
Fritz Roethlisberger (with W. J. Dickson) |
| Management and the Worker |
| 1947 |
Kurt Lewin |
| Frontiers in Group Dynamics |
| 1951 |
Elliot Jacques |
| The Changing Culture of a Factory |
| 1957 |
Alfred Marrow |
| Making Management Human |
| 1958 |
Ronald Lippitt (with J. Watson) |
| The Dynamics of Planned Change |
| 1959 |
Frederick Hertzberg (with B. Mausner and B. Snyderman) |
| The Motivation to Work |
| 1960 |
Douglas McGregor |
| The Human Side of Enterprise |
| 1961 |
Rensis Likert |
| New Patterns of Management |
| 1961 |
Wilfred Bion |
| Experiences in Groups and Other Papers |
| 1962 |
Chris Argyris |
| Interpersonal Competence and Organizational Effectiveness |
| 1963 |
Eric Trist (with G. W. Higgin, H. Murray, and A. B. Pollock) |
| Organizational Choice |
| 1964 |
Robert Blake, Jane Mouton, and Herbert A. Shepard |
| Managing Intergroup Conflict in Industry |
| 1969 |
Richard Beckhard |
| Organizational Development: Strategies and Models |
|
As the need for labor reforms mounted and public opinion changed, organizations began to jettison the mind-numbing practices of scientific management pioneered by Frederick Taylor at Bethlehem Steel. Much of Taylor’s projects involved the installation of piece-rate work and the maximization of output through the harmonization of movements between man and machine.15 Inspired by the magnificent internal choreography of well-crafted machines, such as clocks, it was easy to envision a world of perfectly synchronized motions with employees playing the unflattering role of internal parts. The factory proved to be the ideal testing ground for the Clockwork Universe of René Descartes, Gottfied Leibniz, and others.
Proponents of scientific management sought to take much of the ferocity out of management–employee relations by appealing to objective, unbiased principles of science to guide and regulate the activities of the workforce, as opposed to relying on the more customary means of threats, coercion, and brute force. Because the application of the scientific principles and establishment of work standards really were under the control of management, the new methods of management remained solely production focused and failed to rescue managers and workers from their grim and unfriendly bonds. Productivity, in many factories, continued to languish.
By the early 1920s, major employers shifted their attention to how the work environment and quality of conditions affected employees’ productivity. Consequently, organizations began to investigate ideal conditions in the workplace. The most famous of these studies began in 1924 at the Western Electric Hawthorne Plant in Cicero, Illinois—the makers of telephone system components for American Telephone and Telegraph.
Most people know of these studies through their legacy in textbooks, discussed as the Hawthorne effect. This effect is a reference to experimental artifacts that unintentionally influence results. Researchers at Hawthorne manipulated lighting conditions—and, subsequently, rest intervals, lunchtimes, refreshments, payment methods, and more—and found that productivity within both the experimental (treated) and control (untreated) groups improved regardless of what was done with working conditions. Although quite a bit has been written about these studies and what really happened, researchers seemed to have had ongoing dialogue with employees and the act of including employees in the change process may have been sufficient to increase productivity regardless of the modifications made in the workplace.16
A new, inclusive workplace blossomed between 1929 and 1932 when Elton Mayo, teaching at the Harvard Business School, convinced Western Electric’s leadership to engage in a bold experiment in which he and many trained researchers would interview employees about their likes and dislikes of the workplace. They would use a nondirective questioning procedure—then being pioneered by Jean Piaget, Carl Rogers, and others—and deploy a new technology to capture employees’ comments: audio recording. The information gleaned would be used to make changes in the workplace and to develop materials for supervisory training.17
This clinical approach used to probe employees’ inner lives was directly related to the new human relations movement that valued the inherent worth of people, their capacity for personal growth, and their desire to be authors of their own lives. This was a significant change in the industrial mindset as workers no longer were conceived as simpleton members of the species homo sapiens or as malleable, instrumental components of the industrial apparatus, but rather were viewed as people with interests, needs, and capabilities who could—and should—have a voice in their organizational station.
Eventually the values of the human relations movement were assimilated into the OD framework.18 Ever since, the practice of OD has been predicated on open, honest communications among all parties involved in the change effort and has remained faithful to a process in which members of the group participate in shaping the solutions that will affect them. More generally, OD adopted humanism’s unwavering regard for human dignity, developmental objective of fulfilling human potential, and the belief in individuals’ ability to diagnose their own problems, provide input into material matters, and aspire to a future of their creation.
Organization Change
The success of an OD consultant partly depends on his or her ability to transfer knowledge to organizational members to enhance the organization’s long-term self-sufficiency. It is the OD consultant’s task to plan for their own obsolescence by ensuring that the organization acquires the ability to continuously renew itself.
Although the consultant remains available when assistance is needed, one of the goals of OD is to build up the organization’s capacity to revitalize—that is, to initiate its own change. For fans of the Doctor Who series, we could call an organization’s ability to sustain itself through transformational change, regeneration: the sci-fi process allows a Time Lord who is old, wounded, or dying to acquire a new robust physical form and a slightly different character. Importantly, the new doctor does not become a younger, more vibrant version of him- or herself but a qualitatively different being who is more prepared to combat evil forces in the universe. In many instances, this form of transformation is the same kind of change organizations require.
The metamorphosis of an organization into a new competitive construction involves implementing what theorists have called double-loop learning. As shown in figure 1.4, the first loop is learning to fix problems according to standard goals and protocols. The second loop involves creating systems that permit organizations to reflect upon and question the purpose and efficacy of the first loop. Is the organization looking at issues or concerns in the right way, or does it need to reconceive how it thinks about the marketplace and its operations? This superordinate reflective capability is known as “metacognition,” or thinking about thinking. Overall, metacognition refers to the overarching processes an individual or organization uses to plan, monitor, and assess self-understanding and performance. It is a critical aspect of learning that enables problem-solvers to think through a problem, select appropriate strategies, and make decisions about a best course of action.
Figure 1.4 Single- and double-loop learning. If expected results are not achieved, double-loop learning suggests rethinking the entire problem rather than making additional attempts using similar approaches and expecting different results.
OD theorist Chris Argyris illustrates the difference between single- and double-loop learning using a thermostat: “A thermostat that automatically turns on the heat whenever the temperature in a room drops below 68°F is a good example of single-loop learning. A thermostat that could ask, ‘Why am I set to 68°F?’ and then explore whether or not some other temperature might more economically achieve the goal of heating the room to a comfortable temperature would be engaged in double-loop learning.”19 This latter mechanism of self-examination is a prerequisite for ongoing change; however, organizations still need to learn what to do and have the presence and fortitude to act.20
Writing within the OD tradition, Peter Senge reinvigorated and popularized the notion of a learning organization that he described as one that is able to take effective action and continually recreate its future.21 Learning organizations, for example, can avoid repeat mistakes and meet new challenges because of their capacity to acquire and apply new relevant information. A pedestrian example of this adaptiveness is learning what it feels like to be wet and grabbing an umbrella before going outside on a cloudy day. Similarly, organizations that learn more and more about their relationship to the world outside its walls are putting themselves in a position to adjust in response to, or in anticipation of, new conditions.
Many organizations serve as poster-organizations for adaptive successes and failures. One great success in the past twenty-five years has been the rebound of the faltering behemoth, IBM. Observers once believed this moribund bureaucracy was destined for the mainframe graveyard along with obsolete Digital Equipment Computers (DEC) and Control Data until Lou Gerstner, Jr. reignited IBM’s service culture and introduced new markets through technology solutions.
In contrast, during the 1960s, the anchor supermarket at our local strip mall belonged to the Great Atlantic and Pacific Tea Company (A&P). As teens, we would walk that strip mall and quench our thirst at the fountain counter inside Woolworth’s (later to become Footlocker). If Woolworth’s was busy, we would cross the street to S. S. Kresge’s (which became Kmart). We developed finger strength by producing school reports on a Remington typewriter, patched clothes on a Singer sewing machine, lifted jokes from grandma’s Reader’s Digest, developed pictures from Kodak film, captured moments with a Polaroid, and watched our three channels of programming on a Zenith television that was as big and heavy as a baby grand piano. Recently, it was revealed that future teenagers will never know the exhilaration of discovering discarded Playboy magazines in the neighbor’s trash (one man’s trash is a teenager’s treasure) as Playboy has become yet another casualty to the internet age. Many people living today have never heard of these companies. The people born today probably never will. Although it once took a company a lifetime or two to go poof, a company today can go from the apex of the market to the nadir within a decade (e.g., Netscape, Napster). Given the speed of market transitions and the rapidity of potential organizational decline, organizations no longer have much time to fiddle while they dwindle. OD is more important now than ever.
We all can think of organizations that aptly could be described as “smart” or “dumb”—the bright and profound versus the dull and shallow. Before we discuss how organizations become one or another (or one, and then the other) later in this book, we take up the leitmotif of a learned organization and what general capabilities intelligent companies seem to have that allow them to convert resources into usable outputs, that is, the capabilities that dumb companies do not possess.
Intelligence is believed to have at least two parts, metaphorically illustrated as the difference between five tall people and a championship basketball team. Intelligence is not simply a matter of having native abilities; a second mechanism that makes wise deployment and use of those talents is needed as well. In the same way, organizational intelligence is not scored by tabulating what individuals in the organization know. Until the organization can demonstrate that it is able to use what its employees know, it will remain an organization with smart people versus a smart organization. Therefore, having a thorough understanding of the business environment, the competition, industry trends, and unique technologies is critical but constitutes only half of smartness. The distinction between knowing and sound judgment and efficacious doing is captured by statements like, “For a smart guy, he sure is dumb.”
The learning in organizations, then, generally has two phases. The first phase of leaning mainly pertains to an organization’s ability to gather, integrate, and distribute meaningful information, including the following:22
• Knowledge acquisition: A means of scanning for, appraising, and gathering vital and timely information
• Knowledge sharing: A means of processing and making reliable information readily accessible
• Knowledge synthesis: A means of integrating and interpreting the meaning of information
The second part of intelligence is akin to executive functioning that enables people and institutions to break free of entrenched and rote patterns of behaving by inhibiting impulsive actions, maintaining focus, monitoring and adding relevant information to one’s knowledge base, and flexibly reconceiving one’s notions in light of new facts. Executive functioning means developing a collective mindset that inhibits organizational tendencies to concentrate on irrelevant information and take automatic action when, instead, the situation calls for new outlooks and behavioral repertoires. This added cognitive sophistication is what allows people to set goals, make plans, and see their goals through to the end, altering course if necessary.23
Much of what organizations do is guided by hardwired, overpracticed, and overlearned actions that have been successful in the past. An extreme example of behaviors frozen in time is recounted in a time and motion study conducted on British artillery crews during the Second World War as reported in Alan Kantrow’s book, The Constraints of Corporate Tradition.24 In it, he recounts a story told by technology historian Elting Morison from the early days of the Second World War. Investigators were hopeful they could find ways to increase the speed of operation of cannon fire. Upon observing the five-person crews, the researchers noticed that as the gun was loaded, two men stood at attention for three seconds before returning to action in preparation for the next round. There was no immediate explanation for the seemingly useless three-second pause; the crews maintained that was what they were taught in gunnery school. The researchers showed pictures of these practices to a long-retired artillery officer who, after some puzzlement, realized that the two men were holding the horses: they were positioned precisely where the men once stood in the First World War to keep the horses still during canon fire.
When circumstances change, the organization must be able to modify its behavior and follow through on revised plans to achieve its goals. For that, the organization requires a well-developed frontal cortex that will save it from habitually flying into the proverbial flame. Specifically, organizations need well-developed and disciplined decision-making mechanisms to prudently guide them forward at critical choice points.
Health
The idea of wanting an organization that is “healthy” may seem odd because most organizations would be quite happy to grow profitably—verbum sap. Although the idea of market potency and financial success are increasingly in vogue as interventionists’ goals under the caption of “organizational effectiveness,” business outcomes alone miss the more encompassing, holistic perspective of OD. For OD practitioners, goals solely directed at conventional business outcomes are incomplete portrayals of an organization’s true state of well-being. For this reason, “health,” which denotes a broader conception of physical and mental welfare and a future orientation to remain fit, is preferred over the ersatz synonym, “effectiveness.” The American Psychological Association embraces this broader conception of health in describing the healthy workplace as one that supports health-promotion practices such as employee assistance programs, flexible benefits, and amenable working conditions and that underwrites programs dedicated to the development, safety, and emotional welfare of employees.25
The idea of a healthy organization seems to have its genesis in the work of M. B. Miles who conceived of health as durability: the ability of organizations to survive despite obstacles and setbacks.26 The concept of a healthy company became more expansive when a MacArthur Foundation–sponsored report itemized the dimensions of healthy companies in the late 1980s. These included such dimensions as open communications, employee involvement, learning and renewal, and economic security.27 Since then, many other taxonomies have been developed, but all embody a common theme: A healthy organization is one that is able to achieve positive economic growth while preserving the human-ness of the actors, the social purposes of the organization, and the ability of the institution to continuously renew itself. These many components, in addition to those financial results that are found on income statements and balance sheets, need to be attended to for a consultant’s work to fall within the bailiwick of OD.
That history notwithstanding, OD always has had a therapeutic, introspective dimension to it and never was singularly focused on organizations’ financial objectives. During the Second World War, Wilfred Bion and other members of the psychodynamically oriented Tavistock Institute in the United Kingdom created what might be loosely construed as the forerunners to Training Groups (T-groups) that formed in the United States under the auspices of the National Training Labs in Bethel, Maine.28 Both transatlantic institutions held that the healthy development of a group required an ability to look at itself, reflect on its effectiveness as an operating unit, and openly address difficult subjects. As with individuals, self-awareness and self-analysis were viewed as indispensable ingredients for organizational vitality and change.
Bion’s early work concerned group therapy with battle-fatigued soldiers. Bion thought that the progress of groups could be facilitated or forestalled by the degree to which members managed the underlying emotional dynamics of the groups. Until a group can recognize and remedy unhealthy tendencies and unresolved affective undercurrents among members, the group will never be able to move forward and engage in productive work.29
Those of us who have spent considerable time on teams probably have noticed that many teams operate as two groups in one. One group operates on the surface, diligently working on the task at hand. Another shadow group works beneath the surface at an emotional level, silently aggressing against or fleeing from the work to be done. Because members of a team can discuss a task rationally does not mean their attitudes are consistent with the interests of the group and that their behaviors will conform to their voiced commitments once the meeting is adjourned. The consultant’s job is to get the group to examine its internal machinations more closely and to identify how each of the members may be contributing to or interfering with the advancement of the team’s objectives. Thus, sound interpersonal relations and group dynamics are integral parts of healthy organizations: key developmental attributes that are best achieved in culturally rich environments of openness, trust, cooperation, common purpose, and personal security.
T-groups operated with the same core assumption as the Tavistock groups. By learning about the behavior patterns within the group, and especially about one’s own behavior, the group would be able to diagnose its problems and change itself for the better. Healthy organizations with the competence to improve, then, were predicated on perceptive, self-aware group members and internal relationships of quality and depth.
T-groups (sometimes referenced as sensitivity groups) are leaderless, nondirective groups that instruct by providing little structure in a controlled (laboratory) setting, allowing members of the group to explore their own and one another’s behavior in an unconstrained social situation. Given that powerful social norms and task demands are absent, group members’ personalities—blemishes included—are prominently put on display, exposing the emotional underbelly of groups that frequently is hidden from view. (Encounter groups, spearheaded by Romanian psychologist Jacob Moreno, also were developing at the same time and held the same underlying principles as T-groups—that is, that freedom from social constraint allows for more honest and forthright exchanges among group members to take place and affords individuals a rare unadulterated glimpse at their own behavior.30)
Many groups believe they can think their way through any problem and resolve any issue not realizing the extent to which their solutions are influenced by unseen personal agendas, underlying emotions, and the divergent unexpressed preferences of members. No group regardless of size will be able to continually make good decisions or take prudent actions if the silent killers of group processes are left undisturbed to do their destructive business.
It is unfortunate that T-groups, once frequently used, fell into disrepute as an indicted management fad. This may have been due to the entry of untrained charlatans into the T-group frenzy as well as a propensity of legitimate practitioners to overgeneralize results too far beyond the work of the group to broader more complex issues to which teambuilding alone did not completely apply. Although T-groups may not have directly produced the systemic results organizations had hoped to see, they offered valuable insights to those who made the pilgrimage to the National Training Laboratory in Maine and returned to their workplaces with greater self-awareness.
Behavioral Principles
The formative years of OD occurred in the troubling times surrounding the Second World War, and OD partly was conceived by those such as Kurt Lewin, who had front row seats. Working as a professor at the University of Berlin, Lewin was particularly concerned about anti-Semitism and the plight of the disadvantaged—topics that were not high-priority issues within the burgeoning Nazi Party. With the proliferation of discrimination, intergroup conflicts, and the naming of Hitler as chancellor, Lewin emigrated to the United States in 1934 where he completed a highly influential academic career.
Lewin was one of the forerunners of a general methodology for change called action research that, in its original instantiation, might be thought of as a social movement.31 The aims of the original practitioners were to solve social and organizational problems using scientific methods and principles from diverse fields. Much of OD’s seminal work ambitiously concentrated on big societal concerns of social equality and justice.32 For example, in his relatively short research career, Lewin sought ways to end interpersonal and intergroup strife involving racism, discrimination, prejudice, destructive conflicts, war, and other issues of elevated importance. The field of OD aimed high.33
With action research, OD practitioners are not the white-labcoat types who are playing the role of inquisitive, impartial bystanders sterilely doing research on people at arm’s length. Rather, they are interested participants who are doing research with and for people and who have normative leanings toward social welfare and the common good. OD consultants have a point of view. Although job creation, increases in national productivity, and improvements in our living standards are laudable business goals, they would not be worthwhile pursuits if they could be attained only at the expense of employees, the communities that host organizations, or the broader ecosystems of which organizations are a part. For example, a change effort designed to increase corporate sales (“turbocharge”) of the highly addictive painkiller, oxycontin, without aggressive precautions against the potential abuse of the substance would be anathema to an OD practitioner.
Although the methods used in the course of change may vary, action research adheres to a uniform pattern. The research follows an evidence-based cyclical pattern of problem diagnosis and identification, planning, action, and evaluation and interpretation. The warehouse of knowledge generated by the research is used to refine plans and actions with organizational phenomena more precisely understood over time and more effectively addressed. Action research is a blend of the pragmatic with the theoretical in which action is informed by theory, and theory is advanced by action.
Several aspects related to action research highlight additional features of OD. Four features stand out:
• Based on evidence: From the very beginning, OD theorists have insisted upon solutions to social and organizational problems that were grounded in data. Theorists were duly aware that complete understanding of collective behavior was untenable but that research within the social sciences offered the best way forward and, with accumulated experience and findings, would progressively move us closer to the truth and a more congenial and tolerant society. Among some, OD has developed a reputation of being “soft”; this perception likely is due to exposure to practitioners who used the OD moniker without adhering to the discipline’s behavioral and evidence-based decrees.
• Reflects meaningful change: OD is not terribly concerned about helping people inside organizations check off boxes on their annual to-do lists. Fulfillment of certain goals may be nontrivial to those who are accountable; however, simply completing goals that do not have evident beneficial impact on the lives of people, the performance of an organizational unit, and, in some instances, the community at large does not constitute an OD intervention. Routine objectives insulated from the wider implications of the work are tasks to be accomplished, not to be associated with change efforts that are designed to improve a system’s functioning and make a difference in people’s lives. OD extends the customary ideas of organizational success to employee development and healthy group dynamics, sound decision making, and socially responsible action.
• Concerns culture change: OD invariably is about influencing collective action. The behaviors that organizations want to change are social in nature, and that type of change requires modifying the psyche or culture of the group. One aim of OD, therefore, is to affect the organization’s norms, beliefs, and values that, together, make up the organization’s culture. The change process involves a reset of behaviors by reinforcing new assumptions about what the organization stands for, how employees are to conduct themselves, and what the organization is committed to achieving. It is not unlike someone who moves to a foreign country and must unlearn some habits and internalize new values that are more congruent with the expectations of the citizenry—cultural expectations that the country deems essential to its survival and success. Usually, one immigrant can learn to fit in to a new society rather easily, but the difficulty of cultural change mounts when the numbers of people involved increase. In organizations, large numbers of people who are accustomed to doing things one way suddenly are asked to behave differently. Box 1.4 describes just how difficult culture change can be using the natural laboratory and thirty-year history of East and West Germany as an example.34
• Is a democratic process: Democratic processes were a preoccupation of Lewin’s. While democracy was culturally salient in the decade of Lewin’s most important work as a counterbalance to fascism, the study that put democratic practices into the workplace was conducted by Lewin and associates (Lippitt and White) with fifth and sixth graders at the Child Welfare Research Station at the University of Iowa (then, the State University of Iowa). Lewin and colleagues examined the effects of leadership styles on aggression and productivity in children who worked under the auspices of different kinds of leaders. They found that democratic management styles in which the children could make their own decisions yielded groups that were more cohesive, productive, and friendly than groups whose leaders used autocratic methods of management.35 These findings were effectively applied by Lewin and his students at the Harwood Manufacturing Corporation, a manufacturer of pajamas. When Lewin and others began their work, the company was experiencing high rates of absenteeism and turnover and was losing money. Their choice interventions of employee involvement and group problem-solving seem humdrum today, but they were revolutionary (and successful) then, beating the popular arrival of quality circles by thirty years. Even today the idea of employee participation remains a modestly foreign concept because our thoughts remain dominated by programmed thinking; organizations are engineered or re-engineered for maximum efficiency and the big goals issued from the top prescribe the internal motions of the organization as if a fine timepiece. Lofty, top-down edicts, however, rarely result in substantive change as the “parts” all await their instructions.
Box 1.4
Cultural Paralysis in Germany: Politically Unified and Culturally Worlds Apart
The effusive celebrations marking the fall of the Berlin Wall on November 9, 1989, were premature and misleading manifestations of what really was to come. The promise of “flourishing landscapes” of German unification has not transpired after more than twenty-five years of trying. The cultural, social, and economic differences between two peoples are no longer abetted by a wall but by a “mauer im kopf,” or a “wall in the head.” The transformation of a culture based on egalitarian principles, hardily enforced through rabid government oversight, into one based on libertarian principles and free expression has been elusive. In many ways, the unification process provides a vivid case study on how not to conduct a merger. One party, the West, controlled the process, and many East Germans who had dutifully waited in line for advancement felt cheated when high ranking positions in government and business were taken by the West. But still, it has been more than twenty-five years and the cultural cleavages between the former GDR (East) and FRG (West) by most accounts remain glowingly large. There is Ossis and Wessis.
The successful record of democratic values in the workplace led later researchers to explore other, more-nuanced leadership styles that had thematic consistency with the energy-enhancing properties of participatory management and employee involvement. Douglas McGregor, for example, probed the cosmology of managers and the effects of managers’ worldviews on employees’ attitudes and work habits and found that managers who operate under the assumptions of theory Y versus theory X achieved superior results. Managers who oversee employees under the assumptions of theory Y optimistically see employees as seekers of challenge, responsibility, and accomplishment. Accordingly, these managers invite these creative, industrious types to actively participate in the decision-making process of the group and give them the room they need to work to their potential. In contrast, managers who hold a pessimistic theory X view of human nature regard people as inherently lazy, incapable of making genuine contributions, duplicitous and untrustworthy, and avoidant of real work.36 Consequently, managers believe that these employees need to be carefully watched and coerced into working. It should not be surprising that managers who expect little from people, get little in return.
Robert Blake and Jane Mouton also demonstrated that employee participation was an active ingredient to organizational success. Their well-known managerial grid is formed by the intersection of two core management dimensions: one is concern for production and the other is concern for people.37 Like other theorists working within the OD space, Blake and Mouton do not regard concern for people and concern for production to be an either-or choice. In fact, there is no contradiction at all in managers who are high on both (called 9,9 leaders to reflect the high-end anchors of the rating scales used) and have been found to achieve superior results by creating trusting, collaborative environments.
A recurring theme in both the leadership and family relations literatures is that a leader’s (parent’s) behavior can be summarized along two dimensions. Parallel to Blake and Mouton’s grid, the leadership literature often refers to these dimensions as “initiation of structure” and “consideration.”38 The family relations literature refers to the dimensions as “demandingness” and “responsiveness.”39 The respective interpretations are the same. Initiating structure means to have firm expectations and standards, to insist on mature ethical conduct, and to press for progressive achievements and independence. The consideration dimension is associated with warmth, noncoerciveness, bidirectional communication, and flexibility and responsiveness to the needs and interests of others; it is the emotional part of leadership that steps in to give support, guidance, and encouragement when the situation recommends it, while preserving an affective climate that is respectful of others’ intelligence and abilities. Thus, a management style that judiciously combines concern with limits elicits the greatest productivity.40 These managers collaboratively set goals, support communication flows up and down the hierarchy and across the organization, encourage teamwork, and promote employee empowerment and personal responsibility.
The Structure of the Book
We will be introducing many more principles and methods associated with OD throughout this book. Our approach, however, is atypical. Whereas most explanations of OD typically concentrate on the subject matter by type of intervention, we organize the discipline by what organizations need to do well to succeed. Thus, rather than discretely examine each of the major buckets of traditional OD interventions, we discuss their use in the broader context of what organizations need to do well to be profitably healthy organizations.
This approach fills a notable gap in the OD literature that has deterred the broader acceptance and greater utility of the practice. Specifically, one missing element of OD is that it never expressly states where practitioners should focus their efforts. Thus, our book is organized according to ten principles for healthy organizational growth based on the strongest, fundamental, evidence-based concepts from social and organizational psychology that are the most relevant and applicable to organization change and development. The order of the principles, too, is deliberate. Specifically, the principles move from the general to the particular, covering the spectrum of levels of organizational life—organizational and interorganizational, group and intergroup, interpersonal and individual. Furthermore, we view the ordered set of principles as building blocks based on the likely scale of effects on the organization’s success or demise. The first collection of principles include the establishment of a cooperative enterprise that can anticipate the future and change as necessary: a company will not achieve greatness in their absence (chapters 2–4). The next few principles that include flexibility, diversity, and the work environment are conceived as preventatives: their presence buffers organizations from catastrophic failures or systematic breakdowns (chapters 5–7). And, finally, the last cluster of principles are associated with increasing the capabilities of the organization mainly achieved through individual actors and their interactions (chapters 8–11).
