Organizational Change & Traffic Management & Flow

June 8, 2011

Managing change – the hidden factors of flow

traffic-flow-change-controlRecently while thinking about how change is implemented and impacts organizations, I can across an interesting article on traffic flow.

In the UK on our motorways we now have “active traffic management” systems where lanes are closed & opened by control staff, and often used in conjunction with variable speed limits. Most drivers hate these as they usually slow the traffic up by 10 mph. Does this really work to manage traffic jams? and more importantly can we learn anything from this approach to help us manage change more effectively?

The article shows clearly how “fluid dynamics” can help to explain traffic jams and flow – and using the traffic metaphor and applying it to change I think we can better understand organizational change too.

Below is a summary of the article (use with permission):

The Physics Behind Traffic Jams

by William Beaty

Have you ever been driving on a highway/ motorway when traffic suddenly slows to a crawl? You inch along for many minutes while waiting to see the accident which must have caused the jam. At the same time you also curse the “rubberneckers” who are causing the whole problem. But then all the cars ahead of you take off at high speed.

The jam is over, but no accident, no police cars, nothing. WHAT THE HECK WAS THAT!

A traffic jam with no cause? In the rear-view mirror you see all the poor saps behind you still stuck in the jam. But why? If all those people could just speed up at the same time, the whole traffic jam would evaporate. Why don’t they ever do that? What caused the mysterious slowdown in the first place?

After experiencing many of these “invisible accidents”, I came up with the following explanation. To best understand this, imagine that you look down on traffic from an aerial view point. Pretend you’re in a Traffic Reporter’s helicopter looking downwards.

Fig 1: Cars lining up behind an accident
Fig 1: Cars lining up behind an accident

Above in fig. 1 I’ve drawn a one-lane road, an accident, and a row of cars stuck behind the wreck. Other cars are approaching from the left and stopping too. Suppose that the “wrecked” car (the red one) has simply become temporarily stuck. Maybe it spun out on ice. What will happen when the red car moves and unplugs the flow?

Fig 2: A wave of 'condensed' traffic creeps backwards
Fig 2: A wave of ‘condensed’ traffic creeps backwards

In the top row (fig. 2A) the flow is suddenly unplugged. But not all the cars can move, since most cars are stuck behind drivers who are stopped.

Figure 2B shows the traffic a few moments later, and figure 2C shows it a few moments after that. Notice the orange car in 2A, and see how it eventually becomes unjammed in 2D and begins moving. At the same time the red car in 2A approaches the jam and is swallowed up.

A MOVING WAVE OF “JAM”

After the wreck is removed, there seems to be no reason for the traffic jam to persist. Yet it does. The reason for this is sensible: if I am stuck behind a car that is stopped, then I have to stop too, and so does the car behind me. All the cars in the jam are in this situation. Even though the wreck is gone, they remain locked at standstill because if they want to move, they ALL have to move at once. They never do, because each driver is waiting for the car ahead to move. If I am in the traffic jam, I’m not going to move forward because I have no room to do so. I’d bump the car ahead of me. We all think like this, so none of us can move.

When the car in front of me leaves, I still cannot accelerate instantly, so I will remain stopped for a moment. I must delay leaving for a moment. If I started up instantly, I’d stay too close to the car ahead of me, and that would not be safe. Each departing car must delay in the same way, and this causes the jam to “evaporate” starting from the forward downstream end. It evaporates in a wave which begins at the forward end of the jam, (near the wreck/ incident). The wave eats into the jam from right to left.

Starting at figure 2A, the cars depart from the jam in sequence. In 2B the wave of “evaporation” has moved away from the wreck site, and in 2C and 2D it is far from the wreck. But notice an interesting thing: even though the CARS THEMSELVES are moving from left to right, the “wave of evaporation” moves in the opposite direction. It moves leftwards as it eats into the traffic jam.

There is a second important thing to notice. While some cars are still jammed, more cars are piling up behind them at the trailing end of the jam. Even after the wreck is removed, more cars are still “condensing” onto the back of the jam. The traffic jam is like a solid object whose front end is evaporating and whose back end is growing like a crystal. Cars move left to right, yet watch the group of stopped cars. The stoppage is creeping slowly upstream, in the opposite direction to the moving cars. The accident is gone, but a moving wave of stopped cars remains behind. It’s not a traffic jam, it’s a shock wave which propagates through the “automotive material”. It’s a traveling wave of traffic-condensation.

NOT CAUSED BY ACCIDENTS

These sorts of traveling waves are common during heavy traffic conditions. An accident isn’t needed to create them, sometimes they are caused by near-misses, by people cutting each other off, by merging lanes at a construction site, or simply by extra cars entering from an on-ramp. In traffic engineering lingo, they can be caused by “incidents” on the highway. A single “rubbernecker” could cause one by momentarily stopping to look at something interesting. Whenever you slow way down in order to merge across a lane to get to your upcoming exit, YOU could create one.

Sometimes they have no cause at all. They are like sand ripples and sand dunes, and they just appear for no clear reason. They are like ocean waves caused by the steady breeze, or like the waves which move along a flapping flag. They just “emerge” spontaneously from the writhing lines of traffic. In the science of Nonlinear Dynamics this is called an “EMERGENT PHENOMENON.”

How long will the “traffic wave” last after the accident is cleared? Its lifetime depends upon the amount of traffic, and on the number of cars trapped in the jam, but sometimes these things can persist for many hours. When traffic is slight, the traffic jam might shrink rapidly to nothing. But if traffic remains heavy, then there’s no reason for the traveling wave to ever dissipate at all. Also, if the conditions are just right (if the “condensation” happens faster than the “evaporation”,) then even a tiny wave could grow large and larger. Sort of like dropping a tiny seed crystal into a supersaturated solution. When traffic is heavy and unstable, a single driver can cause the traffic to freeze into a gigantic crystal.

So, next time you are commuting and you approach a stoppage, don’t think of it as a stupid f@#$% traffic jam. Think of it as a pressure wave which has approached your car and engulfed it. Think of it as a simple living thing which is made of cars rather than molecules. Stay hopeful that the crystalline amoeba poops your car out soon. Take an aerial viewpoint, and visualize the wave which is moving backwards as you move forwards.

—————————————-END——————————————-

Is this not like how change is experienced in organizations? With the “cars” at the front of the queue like senior leaders & those towards the back operational staff?

The accident or incident being a change requirement in or to an organization.

So the next time you are managing change – or driving in heavy traffic… be aware your behaviour will impact those around you more than you may first realise!



Organizational Diagnostic Reviews

June 7, 2010

What is a Diagnostic Review?

Holding Steth - diagnosticBefore exploring the function and content of a Diagnostic Review lets understand what we mean.

Diagnostic – Refers to something that is used to determine the cause or disorder in a function/ organization.

Review – A commentary, often with criticism or correction. Also a report providing a critical consideration of a work or activity.
A diagnostic review examines an organizations management and financial systems and practices. Diagnostic reviews are generally at a strategic level and not audits and do not track individual items of expenditure or process actions. Nor do they provide a pass or fail assessment of an organizations management system. Rather, they provide leaders and stakeholders with information to act upon.

The review process should consist of a measurable assessment of key elements of your organization. It uses proven criteria for assessment and a full report that highlights current situation, progress to date, improvement opportunities and proposed action plans.

A holistic Diagnostic Review will cover all of the PRIMO-F areas of your organization or business, including the systems and controls in each.

The Diagnostic Review process should involve four groups of people:

  • Board or Owners
  • Managers
  • Staff
  • Other strategic stakeholders

In addition it should include information from two external groups:

  • Customers
  • Suppliers

The objective being to establish a 360 view of the current status at a given point (snapshot) in time.  Many diagnostic reviews fail as they neglect to capture wide enough perceptions on what is occurring withing an organization.

Know where you are before taking your first step

Vision-structure-primo-f Organizational diagnostic review modelWhen beginning any Organizational Development (OD) or change process it is vital to know where you are, before embarking on a journey to your destination.

If you plan to go to New Zealand or Australia, your first step will be very different if starting from the UK or the US. While this analogy may seem obvious when in the context of travel, it is less so in the context of organizational change. But the situation is the same. Your route to your destination , vision or goal, will vary Dependant on your current position, from a skill and a cultural point of view.

Every organizational change intervention has improvement as it’s ambition some where along the line. We know from research that change is best perceived as something that people have already achieved, and that they have learned from their experiences. By positioning change as the norm rather than a feared future uncertainty, we can help people prepare for ‘the stability of continuous change’.

Using organizational diagnostic reviews as a tool for identifying “where are we now” can enable us to identify strengths and weaknesses that need to be addressed as part of our change journey.

Get Specific

One of the reasons that change and improvement initiatives fail is that the aims and objectives are either too vague or poorly communicated. Having definitions for all the elements we are looking to address is critical. These may be scores or indicators as part of a commercial organizational diagnostic review tool, or they may be KPIs or CSFs

The Business Improvement Review is a holistic diagnostic review tool which takes into account the vision/ mission, measure the culture and explores the strengths & weaknesses of the management and systems in which the business operates. the BIR is like a GPS for your organization. It will tell you where you are now, and with the right implementation strategy it can help you plot a route to your desired destination.

  • The strengths and weaknesses of its People
  • The strengths and weaknesses of its Resources
  • The strengths and weaknesses of its Innovation
  •  The strengths and weaknesses of its Marketing & Sales
  • The strengths and weaknesses of its Operations (Products & Processes)
  • The strengths and weaknesses of its Finance systems and cash-flow

 

A Diagnostic Review Case Study

Case Study Ltd is based in Feltham, the company designs, manufactures and supplies XXXXXX and associated equipment. It operates in a niche, yet growing market. Clients are first-class names, principally major corporate’s and international organizations.

Business is competitive. Larger rivals are often able to compete successfully in terms of price through their associations with raw material suppliers.

The company experienced losses five years ago as a result of losing a significant contract. Sales have subsequently been rebuilt from £1.2m to £2.5m for the year ended March 19xx. T/o fye March 19xx is projected at £2.8m.

There are fifty five staff at Feltham, led by Managing Director and supported by company accountant. The remaining management team comprises the chief engineer, quality and purchasing managers, the production planner and shop-floor supervisor.

1.     Business Issues arising from the Diagnostic Review

The following key business issues have been established through the process of questionnaires and interviews:

  • The company overall has a sound level of knowledge of the industry. It believes it has good products, a customer focused outlook and good relations with suppliers and key existing clients.
  • The three-year decline in gross profit margin (a key financial measure) has been arrested, albeit that it remains at a low level of 15%. The lack of profitability inhibits future options available to the Managing Director without the continued support of the parent company.
  • Financial controls are in place and costs are controlled. Cash-flow issues dictate that there is a reliance of support from the parent company.
  • There is no expressed long-term vision to guide the company  -  “why are we doing this……what are we in business for ?”
  • The company is reactive. Business and marketing strategies are neither clear or cohesive among the management team. There needs to be detailed plans and priorities for achievement of the company’s broad aim of expansion.
  • At times, communication is inconsistent, both at a management and operational level. The full team has few meetings and, as a result, lacks cohesion. There are contrasting views within the team that need to be reconciled   – see the range of views presented in Chart A.
  • Management’s view of their management style is not shared by staff. There are significant gaps in opinions on involvement of staff, recognition and praise, leadership of people, openness, levels of teamwork and respect for people.
  • Overall, this appears to indicate that collective leadership is not as effective as perceived by the management team. Do staff really understand what is expected of them? Is this symptomatic of an overall communication issue?
  • Senior management perceive a level of freedom and involvement in decision-making that is not shared by the remaining team. This is not totally surprising, given the lack of accountability evidenced by the absence of performance management i.e. employees do not appear to be set measurable goals, performance standards, or receive regular feedback of performance.
  • This, in turn, makes it difficult to evaluate individual performance and identify areas where performance and efficiency can be improved. A formal appraisal process may be beneficial, with an emphasis on how their performance impacts upon, for example, bottom line, company goals, customer service.
  • There is general concern that the manufacturing process needs to be improved. There appears to be consistent  -  and persistent  -  problems across the production operation. These include:
    • Limited space resulting in poor production flow
    • Lack of coherent planning and scheduling
    • Inadequate stock planning and control
    • The company struggles to turn around work quickly enough; deliveries frequently fail to meet deadlines; and there is a lack of knowledge generally about the proposed new  information system. On this latter point, collective ownership of the system would be appropriate to obtain “buy-in”, rather than impose by edict.
  • It is apparent that there is no one single individual within the company with direct responsibility for co-ordinating the manufacturing process.
People Resources Innovation Marketing Operations Finance
Communications poor.

Every effort is made but it does not have the desired effect.

Some weaknesses in specific management techniques.

Poor in some areas due to lack of training.

Motivation seems to mean more hours spent at work.

Fairly motivated workforce…..show commitment to the company.

Casual approach; a Monday morning works meeting.

Resistance  by individuals in certain departments.

Too much fire-fighting; not enough time or co-ordination.

Premises too small.

Shortage of space, no room for expansion.

The staff are good; premises, equipment, IT and funding are a problem.

More modern plant, machinery and tooling is required if production is to increase.

Respond well to customer-led demand but are not innovating ahead of the game.

The team needs training in modern company techniques.

The ideas are there but resources and time stop it happening.

Ideas are translated quickly.

R&D constrained by need to monitor overheads.

Long term plans not known.

Could be better.

Efforts from MD and one other, but lacking a sales force…… only one salesman plus agents.

Good relationships with key clients.

Reliant on existing contacts.

Unable to penetrate new markets.

Slow in all areas.

Need to speed up the flow of production from design to delivery.

Information flow at all stages of production needs to improve.

Lead times too short; never enough time from the customer.

Deliveries are consistently late.

R&D ad-hoc.

No planning; lack of co-ordination; fire-fighting.

Not enough stock is carried.

Too many variations on small batches.

Management info system being developed.

Turnover growing.

Cash-flow issues.

Weak balance sheet.

Management accounts good.

Appears to be o.k., but no in-depth knowledge of performance.

Not aware of the finances.

Not aware unless sales target not met.

To complete a Diagnostic Review on your organization (large or small) look at http://rapidbi.com/bir/ and buy the BIR diagnostic tool or contact a certified consultant user.

 

 


Organizational Development & Organizational Effectiveness

May 25, 2010

OD Culture and needs assessment

What is Organizational Development?

Organization Development (OD) is a complex strategy intended to change the beliefs, attitudes, values, culture and structure of organizations so that they can better adapt to new technologies, markets, and challenges. Organizational Development methods are employed to improve Organizational Effectiveness (OE).

Performance improvement is a key reason for implementing organizational development tools and methods.

Or in simple terms a systematic approach which enables a company to implement improvements in a consistent way.

The key to an effective implementation to to know where you are before you start – that is what the RapidBI Business Improvement Review (BIR) is there to do.

What is Organization Development?

The are many definitions for organizational development or organizational effectiveness. To set the scene here are a few well know definitions:
From Wikipedia:
Organization development is a system-wide application of behavioural science knowledge to the planned development and reinforcement of organizational strategies, structures, and processes for improving an organization’s effectiveness. (Cummings and Worley, “Organization Development and Change”, Sixth Edition, South-Western Publishing, 1997, p.2.)

Organization development, according to Richard Beckhard, is defined as:

1. A planned effort…
2. organization-wide…
3. managed from the top…
4. to increase organization effectiveness and health…
5. through planned interventions in the organization’s ‘processes’, using behavioural science knowledge.

According to Warren Bennis, organization development (OD) is a complex strategy intended to change the beliefs, attitudes, values, and structure of organizations so that they can better adapt to new technologies, markets, and challenges.

Warner Burke emphasizes that OD is not just “anything done to better an organization”; it is a particular kind of change process designed to bring about a particular kind of end result. OD involves organizational reflection, system improvement, planning, and self-analysis.

In other words is it is the planned change to a company to enable growth (or change) in an effective way
Relative to consulting. Human Resources, OD & Training means:

  • Consulting with businesses or departments to improve effectiveness; specifically, assessing exact needs, developing and implementing strategic planned change efforts to link goals, skills and processes to the overall mission, vision and strategy
  • The client and consultant (internal or external) work together to gather data (via structured methods), define issues and determine a suitable course of action. The business (or department) is assessed to create an understanding of the current situation and to identify opportunities for change that will meet business objectives
  • OD differs from traditional consulting because client involvement is encouraged throughout the entire process. The ways in which people communicate and work together are addressed in addition to technical or procedural issues that need resolution
  • Empowering individuals and teams by using valid and reliable research to create, manage and embrace efficient and effective change
  • Developing managers and staff to create the desired culture across all levels of the organisation

 

Is OD/ OE the same as training?

No, the two fields compliment each other. OD/ OE involves analyzing 3 areas of an organization: its people, its processes, and its planning. Training on the other hand, typically only involves the people component. Training people will not solve every issue. Sometimes the issue requires a change in the process, and/or further strategic planning efforts.

Business Improvement Review (BIR)

Using the Business Improvement Review or any holistic OD diagnostic can help consultants (internal or external) make diagnoses that will help clients in their planning and decision making.
RapidBI Products and services help you and your managers (or clients) direct organizational change by identifying:

  • The strengths and weaknesses (SWOT) of the organization as a whole
  • The future needs of the organization
  • The gap between the two and the required action plan
  • The culture of the organization (current and required)

And

  • The strengths and weaknesses in the current competencies of the key people in your organization,
  • The future competencies needed by the organization, and
  • The gap between the two.

Once you’ve identified specific gaps, you can design special programs to meet your needs. These needs must be identified in the context of the current organizational culture and the culture desired in the future. Failure to take account of culture is often the cause of failure in organizational change.

What makes a good Organizational Development (OD) diagnostic tool?

Many OD tools focus on the people and the roles they undertake. This is ok but limits the success of the project. With any successful OD project we must look not only at the people but at the systems and culture within they operate. This means understanding at some level:

  • The mission/ goals of the organization
  • The value of the organization
  • The current management style
  • Current and desired organizational culture

 

Diagnosing Organizational Development Needs:

The process that we advocate is based upon over eight years of field research.
1. Plan to plan
2. Decide on the need
3. Agree goals & brief
4. Gather senior mgt data
5. Gather staff data
6. Collate
7. Feedback set priorities
8. Action plan
9. Implement & review

This is the process which surrounds the Business Improvement Review (BIR) when implemented fully.

The main data collection process we use is the PRIMO-F model. This collects hard and soft data against:

People
Resources
Innovation & Ideas
Marketing
Operations
Finance

Our research has found that looking at people, their roles and skills without taking into account the culture, management style and objectives of the organization leads to solutions which are seldom fully implemented and rarely add value. Using the holistic approach of the PRIMO-F model has demonstrated added value and successful change time and time again.

One added advantage we have found when used by HR consultants (internal or external) is that because the process is strategically driven with out bias for change to people, structure or process (at the outset) that the HR functions enjoys the association with a strategic change process because it links to all parts of the organization at a high level.

Within the BIR we also use SWOT, Training Needs analyses and a range of other proven methods.

Keywords

Organizational development, organizational change, OD tools, Organizational Effectiveness, OE


New Science as a Model for Organizational Development – Walonick

March 24, 2010

New Science as a Model for Organizational Development

David S. Walonick, Ph.D.

The world is changing. The deterioration of structure is apparent where ever we look. The old ways of doing things no longer works. Rapidly expanding technology has irreversibly altered the world in ways which we are still tying to understood. We have entered a new era characterized by the proliferation of information.

New scientific discoveries are forcing us to re-examine many of our basic assumptions about society and organizations. We are beginning to appreciate the complex dynamics involved in the process of organizational stability and change. This paper will examine some of the scientific discoveries that have altered our view of the world. Examples will be drawn from systems theory, quantum physics, dissipative structures, and chaos theory.

Relationships

At the heart of quantum mechanics (and general systems theory) is the idea that things exist through their relationships. Bob Toben (1975) quotes from an ancient proverb, “If you cut a blade of grass, you shake the universe.” (p. 33) Everything is connected. Every component of a system has the potential to affect all the other components. Some relationships are easily understood; others seem incomprehensible.

Margraret Wheatley (1992) writes that “In the quantum world, relationships are not just interesting; to many physicists, they are all there is to reality.” (p. 32) All components of a system interact with each other to form patterns, and the system itself is defined by these patterns. The extension to organizations is that “we will need to stop describing tasks and instead facilitate process. We will need to become savvy about how to build relationships, how to nurture growing, evolving things.” (p. 38)

In contrast to the traditional social research model, Einstein’s theory of relativity states that the researcher is not a passive observer of a phenomena. On the contrary, the observer is an intregral part of the process. “You cannot move without infuencing everything in your universe. You cannot even observe anything without changing the object and even yourself” (Toben, 1975, p. 36). The well-known Hawthorne effect is created by the act of observing workers. It is a classic example of how a researcher can influence those being studied. Pascale (1990) called it a “parable about researchers (and managers) manipulating and ‘playing tricks’ on employees.” (p. 103) More correctly, the Hawthorne effect is an example of the observer participating is the constuction of reality. The act of observing, by itself, is sufficient to change reality. The implication for managers of organizations is that focused attention (or intent) can inititiate change.

Field Theory

Fields permeate the universe. Although they are invisible, we become aware of them through their interactions with other fields. A field is like the ripples created by a stone thrown into a pond. As a field moves away from its origin, it interacts with other fields creating nodes at the intersecting points. The nodes form definable and stable patterns–provided that the source maintains a constant frequency. However, if the source changes frequency, nodal patterns bend and curve in relation to the changes in frequency. If the source changes frequency too often, the patterns disappear and are replaced by seemingly random fluctuations.

Stability in organizations is manifest as a result of all components maintaining their own constant frequency. Each component has its own character, and a field is generated that permeates the entire organization, as well as the environment. The stability of the interactions of these fields is a reflection of the stability of the organization. If any component (even a minor one) begins to waiver, the effect is manifest throughout the entire organization and the environment. A new pattern of interactions reflects a changed organizational structure. Even though only one component may have actually initiated a change, the entire organization is affected.

Wheatley (1992) believes that field theory provides an explanation to many organizational mysteries. In one example, Wheatley describes how a “customer service” field might permeate a retail store to such a degree that “clarity about service filled every nook and cranny.” (p. 53) In another example, the traditional idea of “vision” as a destination, might be replaced with a field that permeates an organization. The role of management becomes one of propagating information. Each individual contributes to the formation of fields within an organization.

Resonance

The idea of resonance is a very old concept. When we pluck a tuning fork, and another nearby tuning fork begins to vibrate, it does so because the resonant frequencies of both tuning forks are the same. A voice can shatter a wine glass at it’s resonant frequency. There is a transfer of energy during resonance,

Entrainment, or mode-locking, is an important phenomena related to resonance. Dutch physicist Christian Huygens first documented entrainment when he noticed that several pendulum clocks in his laboratory were all operating in unison (Gleick, 1987, p. 292-293). The clocks had become synchronized with each other by sending and receiving minute vibrations through the walls and floor of the building. Not only was energy being transferred, but the individual clocks themselves altered their “behavior” in order to become synchronized with the other clocks. Equally noteworthy is that the fact that the slower clocks picked up their pace to become synchronized with the fastest (highest frequency) clock.

Its as if “nature feels that it is more economical if two or any number of oscillators that vibrate at frequencies close enough to each other work together rather than insist on keeping their small differences” (Bentov, 1977, p. 38).

The concepts of resonance and entrainment have important implications in the study of organizations. Suppose we think of each individual as an energy/information transceiver, capable of sending and receiving energy. At any given time, each person has their own resonant frequency. When the resonant frequencies are far away from each other, the result is disharmony and a lack of coordination. However, when the resonant frequencies are fairly close, the mode-locking phenomena causes everyone in the organization to resonate in unison. There is a maximum transfer of energy/information between individuals, which results in a coordination of effort. It is important to note that everyone does not need to be resonant at exactly the same frequency. Because of entrainment, they just need to be close.

In any stable organization, the resonant frequency of the individuals must be similar. When theorists speak of a vision, they often refer to a statement of purpose handed down by the top-level management. It should be no surprise that individuals often fail to resonate with a vision, since resonance only occurs when the vision is sufficiently close to one shared by the individuals. The goal of management is not to develop a vision, but rather, to find a common vision that will create resonance in individuals. The individuals that make up the organization already have many personal visions. The task of management is to discover the similarities in order to find a vision that is shared by the individuals in the organization.

How can management discover what visions will create maximum resonance in an organization? The implication of entrainment is to remove all constraints and let the organization seek its own resonant frequency. By allowing maximum freedom in all individuals, the organization will seek out its own resonant frequency that provides the maximum transfer of energy/information. The individual with the highest frequency (within the mode-locking range) will provide the synchronization pulse for the other members of the organization.

Non-local Connections

One of the most puzzling and counter-intuitive aspects of quantum physics is the idea of non-local connections. In 1964, John Bell developed a mathematical proof to demonstrate that instantaneous action-at-a-distance was not only possible, but in fact, was predicted by quantum theory. However, it was not until 1982 that the technology existed to actually test Bell’s theorem. Alain Aspect was able to actually measure the polarizations of photon pairs after they traveled apart from each other. He found that the act of measuring a photon forced the instantaneous polarization of its pair, even though they were separated by several meters. While some physicists have suggested faster-than-light communications as a possible explanation, most have accepted the idea that non-local connections exist.

According to chaos theory, non-local connections in organizational development demonstrate the uncertainty of the future, and therefore, forecasting needs to be short-term and incremental. Chaos management theory acknowledges the idea of non-local connections, however, it does not emphasize the necessity of prior contact. The photon pairs in Aspect’s experiment were initially in contact with each other, and then separated. Yet, they continued to remain in communication with each other. The act of measuring one photon, resulted in the instantaneous communication of polarity information to the other photon. Non-local phenomena might best be viewed as “communication-at-a-distance”.

The members of an organization come in contact with each other (and the environment), and then separate to their independent departments and the community. Quantum physics would suggest that communication could continue even though time and distance has passed. However, it is doubtful that we would be able to recognize a non-local connection. Non-local events appear as random events. The link between cause and effect is so obscure that it is essentially masked from our perception. However, knowing about the possibility of non-local connections suggests that members of organizations should maximize contacts with other people, both within and outside of the organization. By establishing “prior contact”, non-local connections become possible.

Feedback and Control

Traditionally, organizations have focused on the desire to maintain structure and stability. Negative feedback loops are established in order to correct deviations in the organization. Managers have seen feedback loops as a way of maintaining a system within some established limits of normality. The goal has been to maintain the integrity of the system. Negative feedback loops are often called “self-correcting”, because they dampen changes in the system. Positive feedback, on the other hand, amplifies changes in a system. Small deviations build on each other and become large. Positive feedback drives a system away from the current equilibrium.

As the system becomes increasingly unstable, the bifurcation point is reached. At this juncture, the system is in a maximum state of instability. Its future is indeterminate and cannot be predicted. The system is free to find its own solution to the variety of possible futures.

Wheatley (1992) believes that imposing control on an organization will inevitably lead to its downfall. “If organizations are process structures, then seeking to impose control through permanent structure is suicide. If we believe that acting responsibly means exerting control by having our hands into everything, then we cannot hope for anything except what we already have–a treadmill of effort and life-destroying stress.” (p. 23) Williams and Huber (1986) point out that controls often “reflect a basic distrust of and lack of consideration for people.” (p. 309)

Attempts to control open systems can sometimes have catastrophic results. Each time a control is imposed on an open system, it forces the system further away from equilibrium. The system can no longer seek its own best structure. The stability of the system becomes increasingly tenuous. Even small perturbations become threatening to the structure. Inevitably, one of these fluctuations will result in an avalanche of change, as the controls are overpowered by a system seeking to correct a state of imbalance. It is easy to imagine that the decine of many of our organizations is a result of authority and control.

Equilibrium

Prigogine’s (1977) work with dissipative structures has demonstrated that disequilibrium is a necessary condition for the growth of a system. While a system is in equilibrium, it does not grow. We have been taught that growth is good. It is part of our current paradigm. Organizations measure their strength through their growth. Companies attract investors through their growth or growth potential. The paradox is that companies strive for simultaneous growth and stability.

We might ask why growth is important? Can an organization maintain a state of equilibrium indefinitely? System theory teaches us that stability can be maintained when the environment is stable; however, environmental stability is rare. Modern organizations operate in an world of rapid and profound change. The environment is in a constant state of flux. Stability in a dynamic environment can be accomplished only through the continual expenditure of energy and resources. An organization can maintain stability as long as it has the resources to counteract the effects of the environment. Increasing amounts of resources are required as the environment moves further from one that supports the current level of organizational stability. At some point, the demands on organizational resources reach a critical level. The entire resources of the organization are being consumed to maintain a structure that is incompatible with the current environment. Finally, organizational resources are exhausted. The organization either decays, bifurcates, or experiences a rebirth in a new form which is compatible with the current environment.

Self-reference

Mandelbrot’s fractals have shown that many things in nature occur simultaneously on multiple scales. Systems contain similarity on multiple levels. Similar patterns of stability can exist before and after the growth process.

Wheatley (1992) believes that self-reference is a fundamental principle of systems in the process of transformation. “In response to environmental disturbances that signal the need for change, the system changes in a way that remains consistent with itself in that environment.” (p. 94) Systems change, but only within the limits of its established identity. The past history and current state of a system provide the latitudes of possible change. A system can be transformed only in ways which are consistent with its history. Wheatley writes that “self-reference is what facilitates orderly change in turbulent environments. In human organizations, a clear sense of identity–of the values, traditions, aspirations, competencies, and culture that guide the operation–is the real source of independence from the environment.” (p.94)

Nonlinearity

One characteristic of many systems is the concept of nonlinearity. Small changes in one or more variables can have enormous impact on others. The lure for management is that a small (but well-placed) jolt can catalyze a system into a higher order. Management theorists see this as a tool for organizational self-renewal. The issue becomes how to apply this knowledge.

Chaos theory is beginning to teach us much about the nature of change in our organizations and social institutions. Nonlinear relationships among system components is a pathway to the introduction of institutional change. The challenge comes in the discovery of those relationships and the understanding of the dynamics of these systems. The planning of change involves the application of this knowledge.

Quantum change

In 1900, Max Planck discovered that objects heated to very high temperatures did not emit radiation in a linear fashion. He observed that as the objects grew hotter, they emitted radiation in discrete spurts, jumping from one energy level to another (Talbot, 1986). Planck called these packets of energy “quanta”. Five years later, while studying the photoelectric effect, Einstein proposed that light itself was composed of quanta, which he called photons.

The idea of discrete energy states defies our linear view of the world. As we add more energy to a system, we naturally expect it to respond in a linear fashion. However, empirical evidence demonstrates otherwise. When we add energy to a system, nothing might happen. As we add more and more energy, the system suddenly jumps to a new state, without displaying any characteristics of an intermediary state. The system has jumped to a new quantum level.

Miller and Friesen (1984) conducted a longitudinal study of twenty-six companies to examine how organizations change. They presented compelling evidence that change occurred in discontinuous jumps, instead of small increments. They conclude that significant change occurs in revolutionary ways, similar to Kuhn’s (1974) notion of paradigm shifts.

There are many examples in organizational theory that illustrate quantum-like jumps. A small manufacturing company lands a large production contract, and is suddenly forced to operate at a new level, without experiencing an incremental growth in production. A middle manager is promoted to an executive position, and immediately must exhibit the attributes and accept the responsibilites of the new position. The entrance of a new competitor in the market causes a sudden drop in sales. A new scientific discovery brings immediate financial success. In each case, a change in one variable forced a quantum-like jump in another variable. Dichotomous organizational decisions often involve quantum-like change.

Self-Organization

Prigogine’s (1977) research on chemical systems demonstrated that some systems have the ability to self-organize into increasingly complex structures. With each new level of complexity, a system becomes more unstable and requires more energy to maintain its structure. A slight perturbation can force the system into greater levels of complexity, which are even more sensitive to perturbations. At each higher level of complexity, there is greater potential for new structure and change.

Modern organizations can be viewed as open systems exchanging energy with the environment. Fluctuations can be created by a small group of people, and these in turn have the potential to change the organization as a whole. If the perturbations exceed an organization’s ability to “dampen” the fluctuations, then a new structure can evolve. As an organization becomes increasingly complex, it also becomes increasingly unstable. It becomes more likely that small perturbations will lead to even higher orders of complexity. The implication is that organizational change (i.e., evolution) happens at an ever increasing pace.

Self-organizing systems share two characteristics. The first is that the system is exchanging energy with the environment. The second is that the system is far from equilibrium. Some organizational development theorists hypothesize that these conditions can be utilized to create organizational growth. They may be right, but there is a third (rarely mentioned) consideration implicit in their thinking–you have to know where to place the jolt. Just any jolt won’t due. It has to be a jolt in the right place with the right intensity. Since the idea is to foster change, maximum disequiibrium can be created by “jolting” the system component(s) that have the greatest number of links with other members of the organization or environment. In a hierarchical organization, “jolting” (or replacing) top management would create disequilibrium throughout the organization. In a matrix organization, both management and the functionality department, would be appropriate “leverage points.” A jolt can carry an organization into disequilibrium, however, the result of the jolt is filled with uncertainty, as the organization seeks its own new equilibrium.

In keeping with Prigogine’s theory of dissipative structures, Wheatley (1992) argues that a small group of creative individuals can have enormous impact on organizations. She writes that “revolutionaries cannot be isolated from one another. They must keep a firm grasp on their intentions and not let them be diffused into the larger system too early. And they must have links to other parts of the system.” (p. 96) However, Wheatley does not discuss the possibility that organizational instability can also result in detrimental change. It is equally plausible that a small group of “bad apples” in an organization can also have enormous impact. Instability opens a variety of possible futures–some more desireable than others.

Some theorists argue that self-regulating systems not only change themselves, but also change their environment. Dissipative structures are involved in the continual exchange of energy with their environment, and thereby information is flowing in both directions. This theory is known as co-evolution, where “organizations and their environments are evolving simultaneously toward better fitness for each other” (Starbuck, 1976, p. 1056).

An organization is an open system that exchanges energy with its environment. Higher levels of organizational complexity place greater energy demands on the environment. With each evolutionary change, an organization must draw more energy from the environment to maintain its new structure. At some point, the environment reaches its maximum ability to supply the organization with energy. This is the upper asymptopic limit of the S-curve. The organization is characterized by instability and chaos. It lacks the environmental resources to achieve higher levels of complexity. Peturbations in the organization or environment can no longer create growth-enhancing changes. Reorganization can occur, but it cannot happen at a higher level of complexity.

Many articles have been written to propose ways of reviving a stagnating organization. Prigogine’s (1977) research suggests that the best solution might be to find ways that increase the amount of energy available to the system. Many writers have described the diversification of large companys as a way of minimizing risk. Another way to look at this is that these companies diversified in search of new energy sources in order to maintain growth. They successfully tapped new markets, creating even greater levels of organizational complexity.

In many ways, the ability of the environment to maintain organizational growth has been exhaused. During the 1970′s and 1980s, theorists talked about “sustainable growth”. Many have now dropped the word “growth”, and instead talk about “sustainable futures”.

Information and Communication

Traditionally, information has been viewed as a “thing”. A “piece of information” is something that could be disseminated. Galbraith (1973) proposed that the acquisition and processing of information is one of the key issues in designing an appropriate organizational structure. Structures should be designed to maximize information flow between organization components and their environments. Information flow (i.e., communication) becomes a source for nonlinear change. “The ability of men and women to tell each other what they have learned or discovered and to leaverage off the knowing” (Lynch and Kordis, 1988, p. 77).

Wheatley looks at information as key ingredient of structure. “It is information that gives order, that prompts growth, that defines what is alive. It is both the underlying structure and the dynamic process that ensure life.” (p. 102) She proposes that information itself structures matter. In the absence of information, life ceases. Closed systems wind down and decay. “The fuel of life is new information–novelty–ordered into new structures.” (p. 105) The history of management is one of controlling and limiting information.

Information is not useful unless it can be communicated. One of Prigogine’s most surprising discoveries was that certain chemical reactions showed that communication was occurring in nonliving systems. He observed that some chemical reactions would pulsate in unison, demonstrating that there was a form of communication going on between the individual molecules. Wheatley (1992) argues that these chemical reactions are “conscious” because they show the ability to communicate.

If the capacity to deal with information, to communicate, defines a system as conscious, then the world is rich in consciousness, extending to include those things we have classified as inanimate. Consciousness occurs in systems that do not even have an identifiable brain. (p. 106)

By this definition, organizations are clearly conscious. Wheatley (1992) goes on to say that information and communication are the lifeblood of organizations. She points out that “poor communications” is frequently cited as a problem in ailing organizations. Kantler (1983) argues that “open communications” is at the heart of innovation. Organizations need to bring people together in new ways because this makes it possible to create new information, and it sets the stage for innovation. Organizations should encourage, and actively seek out conflict and contradictions to provide an environment where creativity can flourish.

Quantitative analysis of organizations has focused on measurement of discrete system components. The rationale has been that once we understand the individual components, we would understand the system. New science has taught us that we need to be viewing systems from a perspective of holism, where the relationships between the components are what is important, not the components themselves.

Wheatley (1992) believes that one of the most powerful forces in organizations is the individual’s search for meaning. When faced with an uncertain future, meaning is a sustaining force that gives workers a purpose. She views meaning as the strange attractor that draws an organization to a common purpose, and self-reference as the force that guides us to higher levels of organization.

Chaos

Chaos science is the study of complex dynamic systems. Most of the concepts discussed in this paper are embraced by chaos theory. Self-organizing systems are learning systems that seek increasing levels of complexity and structure. Transformation and growth is preceeded by chaos. Each new level of stability is the result of turbulence in the system.

Chaos researchers have observed that open systems typically follow an evolutionary path. The first phase is characterized by increased complexity, increased dependence on environmental resources (energy), and increased sensitivity to random fluctuations. During the next phase, positive amplifying feedback increases disorder in the system. The system becomes unstable and seeks an equilibrium. There are several routes available for the system to achieve equilibrium. 1) If sufficient environmental resources are available, the system can jump to a higher level of organization, with even greater sensitivity to turbulence. 2) When insufficient environmental resources are available to support a higher level of organization, the system can bifurcate and split into two or more seemingly independent systems, each with its own evolutionary potential. 3) The system can self-organize into coherence and synchronicity with other chaotic systems. 4) The system can disintegrate and disappear.

Chaos theory recognizes that systems are very sensitive to initial conditions, and that seemingly minor system parameters can strongly influence long-term future development. This “butterfly effect” has led most theorists to think of chaotic systems as unpredictable. Chaos theory provides a new model for organizational forecasting. Instead of predicting what the future will be, organizations must acknowledge the uncertainties and forecast what the future could be. Organizational planning and forecasting is constantly and incrementally updated (Joseph, 1993).

Chaos science has offered new insights into our understanding of organizations. The application of chaos theory to organizations forces management to focus on the processes of adaptation, change, and transformation. In Thriving on Chaos (HarperPerennial, 1987), Tom Petersarpelld main hypothesis is that all institutions are operating in a chaotic environment, and that “no firm can take anything in its market for granted.” (p.13) Because of the interactions of many economic forces and the rapidity of change, institutions must constantly reassess their vision and adapt to abrupt changes in the environment.

Organizations and social systems operating within a chaotic environment are being continually challenged to maintain their purpose and structure. The paradox, however, is that larger and more established structures are usually less able to change. The inertia resulting from their size (i.e., number of people) makes it difficult to introduce planned organizational or social change. Large institutions generally encompass well-established patterns. The stability of these structures makes them less able to adapt to environmental and internal system changes. All other things being equal, small structures can adapt to change more efficiently than larger ones.

Chaotic systems have boundaries, as revealed by poincaire maps. Strange attractors somehow define the limits of chaotic systems. While it may not be possible to predict future values of the system parameters, we can accurately define values that are not within the system boundaries. Chaos theory implies that we can better forecast what the future will not be, than what it will be.

The hidden pattern in chaos is defined by strange attractors. In organizations, strange attractors are “behavioral magnets” that “create patterns for organizing firms and societies” (Lynch and Kordis, 1988, p. 175). When management attempts to implement organizational change, it is often unsuccessful because the organization moves to correct or counteract the imbalance. A better approach might be for management to modify the strange attractors, and let the organization find its new boundaries on its own. Strange attractors in organizations embody vision, mission, and ethics.

The New Organization

Many theorists have discussed the emergence of a new organizational form. It has been called by many names: the network, the circle, the shamrock, and the learning organization. Each of these refer to a flexible, interdependent, and customer-based organization.

Sanford and Mang (1992) refer to a holographic approach to work, where each decision encompasses the total perspective of the organization. Unlike the democratic model, decisions do not involve polling or require that everyone be present, because the shared vision is common to all members of the organization and is reflected in all decisions.

Osterberg (1987) describes our current economic system as a “consuming system.” He argues that it takes more from society than it gives. It is based on fear, profit, and the struggle for power. People and resources are exploited. Osterberg’s vision of the new organization is one where companies will exist “primarily as structures with which people come together to create cooperatively.” (p. 69) At the heart of this theory is the idea that each person has untapped knowledge and creative potential. The purpose of an organization is to provide an environment where personal development can occur.

Fritjof Capra (1990) believes that our current problems are a crisis of perception, where an outdated world view is no longer adequate for dealing with an interconnected world. For several hundred years, political and corporate leaders have been operating from a Newtonian mechanistic perspective. The new paradigm “looks at the world in terms of relationships and integration. Systems are integrated wholes whose properties cannot be reduced to those of smaller units.” (p. 233) Systems cannot be studied by dissecting the individual parts. Instead, focus is placed on the basic principles of organization.

Capra (1990) argues that the only viable solutions to our problems are those that are sustainable. Economic growth is a key element of the current paradigm, yet we are forced to ask “growth of what, for whom, and at what cost?”. In other words, economic growth needs to be defined in terms of human welfare (i.e., quality) instead of quantity. Capra believes that this will involve “a shift in social organization from hierarchies to networks.” (p. 236)

Robert Haas (1990) describes the corporation of the future as one without boundaries. According to Haas, technology (especially the computer) has created the potential for rapid proliferation of information. Globalization has been made possible through technology. “Telephones, fax machines, and electronic mail link the world. Business partners. . . expect you to respond quickly with decisions–if you don’t, someone else in the marketplace will.” (p. 103) Unfortunately, Haas does not seem to realize that there is also a negative side to instant communications. Decisions made rapidly often demonstrate a lack of thought. Managers, under pressure for immediate response, often spend too little time evaluating situations. Creative solutions to problems diminish because people don’t have time for the incubation period.

Haas (1990) has pointed out that the demographics of the workforce is rapidly changing. By the end of this decade, women will represent two-thirds of the new entrants into the workforce. The proportion of minorities in the workforce will increase dramatically. There will be increases in the number of workers who are single-parent heads of households, and two-wage-earner families. Yet, “for the first time in our history, a majority of new jobs will require a post-secondary education” (Hass, 1990, p. 104).

Paradox

The literal definition of “paradox” is an apparent contradiction. Drucker (1980) emphasized that turbulent times are associated with an increasing awareness of paradox. Quinn and Cameron (1988) pointed out that paradox is also associated with increasing information, complexity, and competition. Many industries have reported record profits, while laying off thousands of workers. Several researchers have reported that organizations simultaneously pursue paradoxical (and seemingly mutually exclusive) goals (Peters and Waterman, 1982; Quinn and Cameron, 1983; Quinn and Cameron, 1988; Rohrbaugh, 1981). Rohrbaugh (1981) argued that paradoxical characteristics were not only present in organizations, but that they were a central characteristic of effective performance. Peters and Waterman (1982) conclude that, “The excellent companies have learned how to manage paradox.” (p. 100)

Pascale (1990) points out that dealing with paradox is not the same as seeking a balance between two opposing theories or mindsets. The idea of balance means maintaining an equilibrium, “but our associations with the term balance evoke images of rest and stability, not tension and instability.” (p. 33) Pascale uses the phrases like “orchestrating tension” and “harnessing contending opposites” to stress the dynamic relationships between paradoxical views.

Lynch and Kordis (1988) believe that paradox is the driving force of innovation, and that we need to actively create paradox, by “doing the things we fear.” (p. 102) An example might be to advertise what you usually hide, and hide what you usually reveal. Paradox creates an imbalance that seeks a resolution, and thus becomes the source of change.

Metaphysical Approach

Gary Zukav (1992), author of The Dancing Wu Li Masters: An Overview of the New Physics (Bantam, 1979), believes that “humanity is now evolving through responsible choice with the assistance and guidance of nonphysical guides and Teachers.” (p.240) According to Zukav, humanity is evolving beyond our five senses and becoming multisensory. “In terms of commerce, this means that intuition will replace rationalization as the primary source of data in the development of long-term strategies, the means of implementing those strategies, and in the resolution of everyday challenges.” (p.241)

Zukav believes that the alignment between personality and the soul is the source of real power. He asserts that the current economy is based on scarcity–the underlying assumption being that there are not enough goods for everyone. Gain comes at the expense of other people, and the Earth itself. The desire for profit (i.e., surplus) creates competition among all those involved or invested in business, leaving the perception that power is the ability to manipulate, control, conquer, and dominate. Zukav believes that today’s institutions are experiencing the painful and destructive consequences of the past.

That mode of evolution has come to an end, and, therefore, so has the utility of economics of scarcity and exploitation. Further pursuit of external power in the field of economics, and every other area of human endeavor, now produces only violence and destruction. (p. 243)

According to Zukav, “ownership” is a way of exerting external power. He believes that as we evolve, “ownership will at first become confusing, then questionable, and finally meaningless.” (p. 243) Since contemporary business is based on ownership and control, Zukav concludes that traditional commerce will be subject to radical changes, and that “all relationships between businesses will be defined by the ability of each enterprise to contribute to Life, and to assist other enterprises to contribute to Life.” (p. 245) In other words, business activities will shift from goals of maximum extraction to maximum contribution. Zukav might be right. The confusion and chaos of modern organizations might only appear chaotic “because they are on the ‘lip’ of the bowl of a great attractor (Lynch and Kordis, 1988, p. 130). “Maximum contribution” might be the true purpose of all organizations.


© Dr. David Walonick – used with permission
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Quick and Painless interventions and solutions

February 18, 2010
Quick and Painless?

In our fast and busy lives we are often looking for that ‘quick fix’ the ‘painless solution’ – but are they? Does it work?

All too often on professional forums and networking groups I hear people asking for quick and painless solutions. Do they really exist in the worlds of business, Human Resources (HR) and Organizational Development (OD)?

Just because a solution is quick does not mean it will work in the medium or long term, nor does it necessarily mean it will support the culture and direction of the business.

Short term pain = long term gain?
What is pain in a professional context? Hassle? difficulty, effort? All of the above? Are many of us now so much under pressure that we ignore the real problem and are happy to stick on a sticking plaster to all problems we face? Do we care about the medium term consequences? – will we still be in the role in 12-24 months to care?

With the current economic climate I believe so – more and more of us will have to face the facts that the interventions we started just did not work – works in many situations they exasperated the problems. Time for us to start slowing down and doing an effective job.
 
Proof in the pudding

In the 2007 survey Develop the developers – the results highlighted that many in HR and OD are involved in evaluating activity and intervention, and that this trend was increasing, however less than 50% were actively involved in structured diagnosis before launching an intervention – and while there appeared to be intent to do more this will still mean that in 5 years time less people will be using diagnostic techniques than currently evaluate. And we and our clients often wonder why interventions do not add the value expected…


As the old saying goes – if you always do what you have always done – you will always get what you have always got. Or as I prefer – the real sign of madness – doing the same things time and time again and expecting different results!

For us as professionals to help our clients we must start to employ a robust diagnostic process on all our activity before committing to an intervention.

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Mike Morrison is director of RapidBI, an organizational effectiveness consultancy. He has been involved in HR, OD and strategic development for over 20 years. He can be contacted via www.rapidbi.com/

© This article is copyright RapidBI 2008 – it may be copied providing the authors are credited, and direct links maintained
http://www.rapidbi.com
This material may be put on your Blog or website – however please keep this copyright statement


Managing Change in Organizations

February 18, 2010

Welcome to our page on change management. For organizational development to be effective, change needs to be managed. Many organizational focus on the project management aspects of change. While this is an important factor – it is not the critical factor. People are.

Often when undertaking change processes in organizations we focus on the process, the project management. Often when change fails it fails because we have not taken into account the impact change has on the individuals concerned from a psychological perspective.

Not all people react in a negative way and change agents must take this into account when using any of the psychlogical based change models.

Some Change Models

personal change modelKubler Ross change curveChange Management iceberg model

Change management continuumManaging multiple change modelChange magnitude breadth model

Change equation beckertSchamner Change model - loopsChange Area model

Change quadrant Managing successful change modelChange curve - loops

Kubler-ross Change curve - loops

To see more of these models visit www.rapidbi.com/created/managementmodels.html

Habits and the impact on Change
As people we learn habits. Habits are formed when we do repetitive tasks, they are formed to help us cope with the wide variety of data (information) presented to us on a daily basis. It is too much to cope with at a conscious level. To cope with the variety over time we form habits. These habits may be simple routines like the order we get dressed in the mornings, the first few minutes in the work place – coffee, tea etc. It may even be the order in which we talk to people. When this structure or order is changed – it impacts us in many ways. It is often the simple changes to routines like this that cause individuals them most problems. It is not the fact that a desk may be now facing a different direction or on another floor in the building that is the issue – it is the break in the pattern that has been enforced on an individual. It is the little things that take time to resolve. As humans we can often deal with the big changes easily – it is the little things that cause us more difficulty! When change is ‘imposed’ on people, that is they feel they have little ownership in the decision, they often feel out of control. As organizational development or change agents we need to help this process.

Please note that as humans we all have a choice – we can engage with the change or we can leave. As Organisational Development professionals we need to recognize this as a legitimate strategy.

We cannot and should not force change on people, our role should be to enable change and to encourage people to mage a choice or decision.

The models shown on this page can help individuals recognize that what they are experiencing is ‘normal’ and that this is often a process that they need to go through. Some people will go through the process quickly – others more slowly.

Many Change Models There are many change models, the most common one is the Kubler Ross transition (grief) cycle. Originally titled ‘The 5 Stages of Receiving Catastrophic News’ these stages are:

  • Denial
  • Anger
  • Bargaining
  • Depression

AcceptanceAs an example, apply the 5 stages to a traumatic event most all of us have experienced:

The Dead Battery!

You’re going to be late to work so you rush out to your car, place the key in the ignition and turn it on. You hear nothing; the battery is dead.
Denial – What’s the first thing you do? You try to start it again! And again. You may check to make sure the radio, heater, lights, etc. are off and then…, try again.
Anger – !$%&*@~$! car!, I should have junked you years ago. Did you slam your hand on the steering wheel?
Bargaining – (realizing that you’re going to be late for work)…, Oh please car, if you will just start one more time I promise I’ll buy you a brand new battery, get a tune up, new tires, clean you, and keep you in perfect working condition.
Depression – Oh God, what am I going to do. I’m going to be late for work. I give up. My job is at risk and I don’t really care any more. What’s the use.
Acceptance – Ok. It’s dead. Guess I had better call the breakdown service or find another way to work. Time to get on with things; I’ll deal with this later.This is not a trivial example. In fact, we all go through this process numerous times a day. A dead battery, the loss of a parking space, a wrong number, the loss of a pet, a job, a move to another city, an overdrawn bank account, etc.Most write ups of this model in recent years has focused on grief, while this is great for doctors and councilors, it is not helpful in business.In business I have found that while this is a valuable model, staff and managers find it ‘difficult’ to understand, so I use a simplified version:

  • Denial
  • Resistance
  • Exploration
  • Acceptance/ Commitment

The graphical version is listed below. I occasionally change the last one from acceptance to commitment de

pending on the ‘depth’ of change. I let the ‘users’ of the model create their own words. When they own the model they are more likely to use it.

Personal Change Model
Encouraging people to create their own labels for each of the four stages helps them to own the model. If they own the model they are more likely to use it.Remind them that these types of reactions to change are common. In fact we all react like this to a greater or lesser extent. It is normal. Understanding the fact that they are/ might be having an emotional reaction to a logical proposal is a big step for many people. Some times we will go through the stages quickly, other times more slowly. Sometimes we may be going through several change processes at one time, so will be in different places on the curve depending on the change. Often at the same time!

Other change management models include:
The ADKAR model for individual change management was developed by Prosci. This model describes five required building blocks for change to be realized successfully on an individual level. The building blocks of the ADKAR Model include:

  • Awareness – of why the change is needed
  • Desire – to support and participate in the change
  • Knowledge – of how to change
  • Ability – to implement new skills and behaviors
  • Reinforcement – to sustain the change

John Kotter has set out an eight-step strategy:

  1. Establish a sense of urgency.
  2. Create the guiding coalition.
  3. Develop a vision and strategy.
  4. Communicate the change vision.
  5. Empower employees for broad-based action.
  6. Generate short-term wins.
  7. Consolidate gains and produce more change.
  8. Anchor new approaches in the culture.

If you would like any more information on the use of the model or how we have integrated it into our organizational and culture change products please contact us or visit our diagnostics page.

Other change models and adaptations
There are many ways of graphically representing a ‘change curve’. below are a few variations.
When working with individuals and teams undergoing change, it is not the actual model used that is important, but that the individuals see it is relevant to them. The best change facilitators use the one which best matches the culture of the organization they are working with.

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If you would like any more information on the use of the model or how we have integrated it into our organizational and culture change products please contact us or visit our diagnostics page.

Please note the models here are provided for educational purposes only. No copyright is assumed. © Mike Morrison, RapidBI 2007 http://www.rapidbi.com


Creating an organisational wide innovation culture

February 18, 2010

Ever heard people say…

“What we need in this organisation is innovation”, “Creativity will give us the edge”.

Leaders often utter these words with little realisation of the difficulties of bringing about a fundamental shift in the behaviour necessary to create an innovation culture across the enterprise. “We can empower people to bring new ideas, we’ll run some workshops on creativity” if only it were that simple. But alas this Procrustean approach is unlikely to reap rich rewards.

You remember Procrustes of course, the famous innkeeper of greek mythology? According to legend he was single-minded in his approach to hospitality, he kept an inn on the road to Athens and what distinguished this inn from any other was that it had only one room containing only one bed. Procrustes believed that all travellers who stayed in his hostel should fit in the bed, and this is where he was single-minded, those who were too tall swiftly had their feet cut off whilst those too short were stretched to fit. An unfortunate side effect of this unwarranted attention to detail meant that by the time he had executed the necessary adjustments many of his guests were, well, dead!

A one size fits all approach denies the reality that people are different and in developing an approach towards encouraging innovation these differences need to be surfaced and reconciled.

One organisation has devised a more enlightened strategy. Recognising early on that building a culture of innovation requires some foresight and hard graft in building a critical mass of people who understand their own, and others innovation style they targeted successive intakes of graduates to build new ways of thinking and acting to realise their innovation potential.

Around 40 graduates a year participate in the graduate development programme, after successfully completing an assessment centre. Critical reasoning tests are part of the selection process but interestingly, so too is a creative thinking test that explores, fluency – the number of ideas generated, originality – how original are the ideas and lateral flexibility – how diverse these ideas are. Candidates are chosen according to their strengths either in critical reasoning or creativity – some even have strengths in both domains! Importantly, whatever their strengths each have a vital role in the innovation process.

At the very first module of their development programme they are introduced to two important topics – learning and innovation. Each individual learns about their own preferences for learning which involves a combination of thinking and action (after Kolb) and understand the strengths and limitations of each preference. Prior to the module they are asked to complete a Creatrix™ inventory and when attending are introduced to the underlying concepts that describe innovation capacity – creativity and risk taking. The blend of these constructs gives unique profiles that describe typical approaches and attitudes towards the behaviours associated with innovation. Through an understanding of their own approach and strengths towards innovation the groups develop awareness of the need to balance innovation teams, too many innovators and a surfeit of ideas but no action, too many sustainers and no ideas will see the light of day. Appreciating their own and others styles helps in several ways; they recognise their own unique contribution to the innovation process; they identify potential barriers and possible levers that can help navigate from ideas to action; they develop a language for describing and understanding innovation; they identify ways of making things happen by circumventing the organisational “permafrost” that kill possibilities prematurely; they develop individual action plans for switching on their own capacity for innovation; and build a network across the organisation to act on those thorny cross functional problems.

This fresh approach of seeding the organisation with new entrants untainted by the inevitable cynicism seasoned campaigners in the organisation is beginning to bear fruit. Hungry to make a mark many of the graduates are pushing new ideas and making a succession of small wins from streamlining processes to developing new products – and what’s more getting the support of the person at the top. As this population grows with each successive stream a critical mass of young innovators is being formed who want to push the boundaries even further.

For this group in the organisation, change and innovation is not a threat, they feel empowered to drive it and, for them, it is the opportunity for more learning.

With innovation, as in other aspects of life, diversity brings real advantages, a concept that was lost on poor Procrustes.

By Mike Morrison & Vince Whittle

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For more information on creating an innovative culture see: www.rapidbi.com/creatrix & www.rapidbi.com/bir

For more management articles see www.rapidbi.com/articles

© This article is copyright RapidBI 2006, 2008 – it may be copied providing the authors are credited, and links maintained


Develop the Developer – who is the typical developer?

February 18, 2010
Develop the Developer was a survey run in the summer of 2007.
Slowly we are unpacking the results. The summary is nearly complete but in the mean time as we discover key elements they will be posted here.
The typical developer in 2007 is:
  • Female, aged 36-56 (mostly 36-46), employed in a developer role, a member of the CIPD. They have been in a development role for five or more years and to date completed at least 30 days of CPD – many over 100.
For more information and background on Develop the developer visit the project site – www.developthedeveloper.com
Mike Morrison – January 2008

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Mike Morrison is director of RapidBI, an organisational effectiveness consultancy. He has been involved in HR, OD and strategic development for over 20 years. He can be contacted via www.rapidbi.com © This article is copyright RapidBI 2006, 2008 – it may be copied providing the authors are credited, and direct links maintained


Diagnosing Organizational Culture

February 18, 2010

Today I read a thread on Diagnosing Organizational Culture, where someone was asking for recommendations on tools to use to undertake this task.

If you are only looking for isolated culture tools then the following should be considered (in no particular order):

  • Diagnosing Organizational culture – Harrison
  • Denison Organizational Culture Survey – Denison
  • Corporate Culture Questionnaire – SHL
  • The Creatrix – Byrd (http://www.creatrix.com/ ) looks at the culture for innovation and effective leadership
  • Organizational Dynamics – Kotter (book with diagnostic)
  • Diagnosing & Changing Organizational Culture – Cameron, Quinn (book with diagnostic)
  • and many many more….

Many instruments will claim to be ‘normed’ – be careful of this – we know the difficulties in ‘norming’ personality psychometrics – well imaging that complication multiplied ten fold per person employed… each person acts and interacts with another in a different way – I would love to see the data to be verified for this – the psychometric publishers would love to have such technology!

Context based Cultural Review

There are many approaches to looking at culture and for each firm their will be an appropriate tool based upon:

  • Current culture (ironically)
  • Goals of undertaking the survey
  • Desired outputs

I have been part of a team looking at what makes an effective firm for over 10 years now and have used many, many instruments from around the world looking at organizational culture. To my mind they all have one fundamental flaw – they assume there is a right way to run a business.

While there may well be a preferred approach of empowerments, engagement etc, I have worked with many firms that use an autocratic style very effectively, and when changed often people feel less secure and over time those firms fail to perform to the level they once did.

Change the culture at your peril

Having worked with over 700 firms in the last 10+ years I have discovered that the best culture to have is the culture that best suits the owner/ CEO and their natural style, then it is about getting consistency across the organization.

To change the culture without the TOTAL commitment from the CEO (and the CEO having appropriate one-to-one support to change their own style first) is pure folly. Change of culture must be led from the top if it is to be sustained and add value to the organization.

It’s more than just culture change

In addition, looking at culture on its own is meaningless – the systems, structure and processes need to be congruent with the culture, and just looking at culture in isolation is folly for short term feel good but little long term added value.

Any diagnostic process as part of an organizational development intervention needs to be as holistic as practical to avoid duplication of effort at a slightly later stage (clients get diagnostic’ed out)

Going truly Holistic

Many OD practitioners talk about holistic reviews – but are they truly holistic? Do they look at the way Finance, Marketing and Operations are run in the organization? are these put in the context of the culture and the stated/ desired goals of stakeholders?

The BIR (Business Improvement Review) not only looks at culture, style and values but puts it in the context of operations and the goals of the organization. It does not assume there is a ‘right’ or a ‘wrong’ to run a firm, nor does it assume a single management model. The BIR provides the coach or consultant to start a meaningful discussion based upon a common understanding. This creates ownership in the key decision makers and as a result has a high proportion of participants take meaningful action post diagnostic. They own the results and the reason for change.

If you would like more information on the BIR please visit www.rapidbi.com/bir or email me for further details.

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Mike Morrison is director of RapidBI, an organizational effectiveness consultancy. He has been involved in HR, OD and strategic development for over 20 years. He can be contacted via www.rapidbi.com/

© This article is copyright RapidBI 2008 – it may be copied providing the authors are credited, and direct links maintained


Strategic Organizational Development

February 18, 2010

OD professionals are the CEOs allies in creating a top performance culture for the organization.

Organizational Development professionals are specialists in Change Management and Culture Development. However many find themselves in positions that make it difficult to get a straight line of communication to the CEO. Mainly because of the Organizational structure and the fact that OD-Organization Development is located under HR. Ideally the OD Head would have a position on the same level as the HR Head according to Dr. William Rothwell from Pennstate University who is an authority in HR. However reality is that most OD professionals still work under the more traditional structure.

Some years ago I held an OD role that reported directly into the CEO – HR did not!! – so to some extent this is down to the CEO and their experience of what an OD professional can and cannot deliver in relation to their needs and vision for the organization.

OD as a discipline is getting is only recently starting to grow an a standalone profession. More so with the pangs of growth that many of the new organizations are now facing. Talent acquisition, retention, organizational culture and people development are now starting to hinge more on the OD professional more than the HR. Recognizing this aspect, many organizations are allocating independent structures for the OD function. However, in cases where the OD has to work under HR, whether he/she can connect to the CEO solely depends on what he/she is capable of taking to the table. If a OD professional can sparkle with out-of-the-box ideas which can directly contribute to the growth of organization, the CEO cannot turn a blind eye.

Back in the 60′s and 70′s OD focused on people, behaviours and their actions and interactions with each other, in those days the majority of organizations did not know how to look after or engage with their people –

Things have now changed, much is different

CEO’s are having their valuable time ever squeezed and as such will only be able to have people reporting directly in that can add directly and measurably to their primary objectives. They have to focus on the big picture or strategic matters.

Unfortunately it is not very often that OD practitioner can demonstrate primary change. If we want to be engaged at this level we need to re-evaluate what we do and what is classed as OD activity. For example, traditionally when undertaking diagnostic processes we seem to focus on people and behaviours, or on the culture, now we need to be more integrated and holistic. This means starting to look at factors which traditionally have not been the domain of OD practitioner. If we are to truly facilitate change then our diagnostic process need to map the PRIMO-F model – that is to cover:

  • People,
  • Resources,
  • Innovation,
  • Marketing,
  • Operations and
  • Finance elements,

For it is how these factors interact that provide the organization with either an advantage or disadvantage in the market place. When undertaking a SWOT analysis for your organization do you cover all of these elements appropriately? Sure we may not be in a position to solve any issues raised here but as OD facilitators our role is to identify any blocks in the organization, then help to facilitate a solution.

So if we really want to get noticed we need to really get strategic and start looking at interactions with people and systems in all elements of our respective organizations.

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Mike Morrison is director of RapidBI, an organizational effectiveness consultancy. He has been involved in HR, OD and strategic development for over 20 years. He can be contacted via www.rapidbi.com/

© This article is copyright RapidBI 2006, 2008 – it may be copied providing the authors are credited, and direct links maintained


Organizational Development a true path to strategic development?

January 14, 2010

Organizational Development a true path to strategic development? – getting holistic

Traditionally Organizational Development (OD) was mainly concerned with the three S’s of an organisation:

  • Structures
  • Staff and
  • Skills

Specialists and consultants practising in Organizational Development would look at an organization and identify its stage of growth or maturity.  This would form the basis of a ‘diagnosis’ and an initial plan for change and developmental action. 

There are many variants of these models. Many of the growth or maturity models describe the organization in the way humans grow and develop. The assumption being that organizations are like humans.  That there is an organic order and structure to the way they grow, change and in their ‘developmental’ needs.  That is they pass through fixed stages, for example  – infant, toddler, child, teenager, youth, adult, midlife crisis and retirement….

These models (and there are many like it) are fine in simple single product or process organizations, however I have yet to find one that ‘holds water’ in an environment which has products at various stages of development or reflects the way that organizations have access to funding and expertise in the business world today. Change is occurring so fast that if these phases exist they are now fleeting rather than ‘landing stages’ or benchmarks in development. The age industrial age in which these models were developed has long gone. We need to stop looking at organizations in silos and look at them from a holistic position.

Once beyond the initial entrepreneurial or start-up phase, the pace of change in an organization is different and the pressures affecting each function and ‘product line’ vary considerably.  In the current stages of change within our business world we need to look at all of these stages within all organizations… as some die others are born… this is as much as the ‘circle of life’ as it is organizational maturity in the way the concept was initially conceived in the 60′s and 70′s.

Times as they say are a changing

The days of organizations operating with a single product or service for many years have, on the whole, long gone.  We are now in a time where many of the products and services we deliver now did not exist 5 years ago, and the likelihood is that in 5 years time the products and services we will be delivering to our customers would have changed several times.  The concept of the product life cycle while potentially valid, the reality is that by the time you can plot where a product is on a life cycle curve, often the product is out of production or at the end of its life.  We need to look for different ways of developing and managing our organisations.

A change of focus to holistic strategy

Rather than look at single elements of an organization, we need to start being more strategic and holistic.  And we are not just talking about looking at the people aspects.  As organisations become more fluid and adaptable, managers, teams and individuals need to develop stronger skills in developing others.  This means more than empowerment and devolvement.  It means a whole new way of working.  This is particularly true for HRD professionals.

Some organizations have started to explore matrix structures.  To survive in the rapidly changing time ahead we will all need to adapt to matrix structures.  Many organizations have explored matrix management (or multi disciplinary) teams for change processes and project management activities.. The challenge for the future is how to harness these structures and attitudes for front line staff.  One day working on product X, the next providing customer service on service Y.  Some of the organisations in the retail sector have embraced this way of working for some years.  The health-care sector have tinkered around the edges.

For HR and HRD this will mean working differently.  And I am not just talking a change of function name again!  For us to work and deliver strategic advantage, we need to start to look at the way we undertake OD activity in a truly holistic way.  

This means OD teams (not individuals) need to start looking beyond the traditional people and structures, into finance, marketing and operations of a business.  Recognising that there will be core and local cultures, processes and management styles.  Teams will be required, not because of the volume of work, but the sheer diversity of what we need to review.  There are few people that can keep up with current thinking in one area, let alone across the whole gambit of an organisations functions.

For OD to deliver strategic advantage we will need to embrace the following:

  • People
  • Resources
  • Innovation
  • Marketing
  • Operations
  • Finance

…within in context of management style and corporate values. This is known as the PRIMO-F model

In the past we have been strategically involved in the people aspects, and to a limited extent resources.  But to be truly strategic we need to encompass all of these areas and ensure that any change in one area does not have a negative impact on another.  The PRIMO-F model has been used by strategic Business Advisers for a number of years. Perhaps it is time for those of us in OD to start looking at it as a strategic advantage. Traditionally HR and HRD have been isolated from the strategic business advisers, often reporting to different parts of an organisation. Perhaps it is now time to look towards integration?

Holistic organisational reviews like this require different skills and often a small team with diverse experience and competence.  This in itself presents us with a challenge.  Will our directors recognise our contributions in the context of Finance, Marketing and Operations?  How can we build credibility? Is it time to move away from simple relationship building to the development of strategic alliances with our functional colleagues?  For they too will be feeling the pressure as the pace of change speeds up.

The change away from the ‘softer’ and the legal aspects that our managers have learnt to expect in a role that is at the heart of growing and developing our organizations will be an interesting journey.  That is not to say that what we have been doing is wrong.  There is still an ongoing need for this activity.  To be more strategic we need to take a radical approach.  Identifying who does what will be one of the first critical steps each of us makes, recognising that this ‘activity’ that we identify may well be different in the coming months – and so may the role that undertakes that activity.

Conclusions

For HR and HRD to become truly strategic we need to change our focus from people – to how people interact with systems and processes.  This is true Organisational Development, and I suspect the way forward for the (HRD) profession.  This means as professionals we need to move towards understanding business, finance and operations, in order that we can add real value.


Why Organisational Development often fails to deliver

January 29, 2009

organisation piecesOrganisational Development (OD) is the name or label given to many HR and training related strategies, but it is more than that.

Bennis in his early work “Organizational Development: nature, origins & prospects” defines OD as:

“a response to change, a complex educational strategy intended to change the beliefs, attitudes, values and structure of organizations so that they can better adapt to new technologies, markets and challenges”

This is just as true today as it was in 1969!

Research carried out within the Business Link organisation in the late 1990s and Warwick university looked at SME (Small and Medium sized Enterprises) (50-500 employees as an autonomous business unit or legal entity) with the view of identifying why management development strategies did not work.  In summary the conclusions were:

  1. Activity not linked to organisational objectives
  2. No overall strategy for corporate development
  3. Corporate culture not taken into account
  4. Purchasers not clear about what they are buying
  5. Suppliers finding solutions to problems they can solve
  6. Lack of evaluation
  7. Time pressures on managers
  8. Change process not managed
  9. Lack of (appropriate) ownership

These factors were found to be true for: training, organisational development, change and business support and improvement activity.

Starting out on the right foot

Some time ago I undertook a survey called “Developing the Developers” and one of the significant findings of this was the fact that the missing element in the majority of interventions was that of appropriate diagnosis. This is also true in organisational development at a holistic level. For any OD strategy to be effective we need to have a base of understanding of “where are we now”, we need to undertake a review of our business that can act as a benchmark measure. This will also enable evaluation of policy and strategy to be more effective. In other words before undertaking any OD activity we need to undertake some form of quantitative diagnostic process. This will then act as a reference point for all future development interventions and aid the evaluation of success (ROI etc).

Get the diagnostic process right and you have a great chance of success, miss it out or get it wrong and the chances of success are little to none.  As the saying goes “fail to plan… plan to fail” planning in an OD context is diagnosis AND prioritisation.

The Business Improvement Review was designed to provide a holistic overview of an organisation with the view of undertaking OD or business improvement activity.


New use of wordpress blog for management articles

January 5, 2009

For some time I have been looking at ways to include smaller articles on the RapidBI site.  Our main articles page www.rapidbi.com/articles/ works well but is not the place for small tips, thoughts and items.

My experience with WordPress has prompted me to put up a version of wordpress on my site for managing this ‘micro content’ and the blog software does this job well. you can read more at www.rapidbi.com/management/


History of the SWOT analysis

December 29, 2008

Over the past 12 months I have become rather obsessed with the history and origins of the SWOT, along with PESTLE & SMART.

As the months have gone on I have identified much of the history of SWOT analysis and found may sites which appear to have credible sources – however when one ‘delves deeper’ often the data is clouded, indeed whenever I read of a source I attempted to buy the original book – so have amassed a large collection of old management books.

For example, on the site www.provenmodels.com it is claimed that

“The SWOT framework was first described in detail in the late 1960′s by Edmund P. Learned, C. Roland Christiansen, Kenneth Andrews, and William D. Guth in Business Policy, Text and Cases (Irwin, 1969).”

However the book I have of the same name and authors – 1965 fourth printing 1967 does not list the term SWOT, although it does talk about a similar concept (but then most strategy based management books did) it says (p31):

“… Application to cases

As the student attempts to apply the concept of strategy to the analysis of cases he should try to keep in mind three questions:

  1. What is the strategy of the company?
  2. In the lights of (a) the characteristics and developments of its environment and (b) its own strengths and weaknesses, is the strategy sound?
  3. What recommendations for changed strategy might advantageously be made….”

In over 1000 pages of copy this is the nearest I can find as a reference to the SWOT analysis framework.

The real history of SWOT:
The origins of SWOT is believed to have started with the term SOFT, not SWOT.

SOFT (Satisfactory (good in the present), Opportunity (good in the future), Fault (bad in the present), Threat (bad in the future)).

This was the outcome from the research work on corporate planning conducted at Stanford Research Institute (SFI) from 1960-1970.

It is understood that the SOFT analysis was presented in a seminar at Zurich in 1964 and Urick and Orr changed the F to a W and called it the SWOT (Humphrey, 2005) analysis.  Here is was presented as a standalone tool rather than being part of a process.

Weihrich (1982) subsequently modified SWOT in the format of a matrix, matching the internal factors (i.e. the strengths and weaknesses) of an organization with its external factors (i.e. opportunities and threats) to systematically generate strategies that ought to be undertaken by the organization.  It is Weihrich who is credited with the four box matrix we now use.

Evidence

Evidence of this is best found in the SRI newsletter of December 2005 in which Albert Humphry himself states the origins of the model.

Tools like SWOT get into the consciousness due to a range of factors – Easy, practical, obvious….

They were the result of sound research but at the time not documented so as they were being used as a real tool, this is probably why it is so difficult to find much documented evidence of the origins.

Certainly from the 1980s onwards SWOT is prolific in journals and publications and yet no-one listed where they heard about the model.

One thing for sure – if used in isolation it does not work, used in context as Humphry and the team describe then it is a powerful tool.

Humphrey’s letter of explanation (Taken from SRI newsletter of December 2005 ):

SWOT Analysis for Management Consulting
by Albert S. Humphrey
Shortly before he died, Albert “Humph” Humphrey prepared a paper that describes the methodology that he learned at SRI in the 1960’s and used as a basis for a 35-yr career as an independent management consultant dba Business Planning & Development. Here is his paper, abridged with permission:

SWOT analysis came from the research conducted at SRI from 1960-1970. The research was funded by the Fortune 500 companies to find out what had gone wrong with corporate planning and to create a new system for managing change. Led by Robert Stewart, the Research Team also included Marion Dosher, Dr Otis Benepe, Birger Lie, and me.

Corporate Planning struck first at Du Pont in 1949, and by 1960 every Fortune 500 company had a Corporate Planner. But nearly all of these companies felt that Corporate Planning, aka Long Range Planning, was not working. They knew that managing change was difficult and often resulted in questionable compromises.

From 1960 through 1969, we interviewed some 1100 organisations. A 250-item questionnaire was designed and completed by over 5,000 executives. Seven key findings lead to the conclusion that the Chief Executive should be the Chief Planner and that his immediate functional directors should be the planning team.
The key research findings were never published as being too controversial. But this is what we found:
1) A business can be divided into two parts: The base business plus the development business. [This was re-discovered by Dr Peter Senge at MIT in 1998 and published in his book “The 5th Dimension”]. The development business turns over every 5 to 7 years.
This was a major surprise and urged the need for a better method for planning and managing change.
2) All people measure what they get from their work and divide it by what they give to the work and this reward/effort ratio is compared to others. If it
perceived as too low, the person slows down.
3) The introduction of a corporate planner upsets the sense of fair play at senior level, making the job of the corporate planner impossible.
4) The gap between what could be done by the organisation and what was actually done was about 35%.
5) The senior man will over-supervise the area he comes from.
6) There are 3 factors that separate excellence from mediocrity:
a. Overt attention to purchasing
b. Written departmental plans for short-term
improvement
c. Continued education of the Senior Executive.
7) Formal documentation is required for approval of development work. In short, we could not solve the
problem by stopping planning.

We started as the first step by asking, ”What’s good and bad about the operation?” Then we asked, “What is good and bad about the present and the future?” What is good in the present is Satisfactory, good in the future is an Opportunity; bad in the present is a Fault, and bad in the future is a Threat. Hence S-O-F-T. This was later changed to SWOT—don’t ask. (I’m told that Harvard and MIT have claimed credit for SWOT…not so!)
Following the analysis step, we sorted the issues into six programme-planning categories of:
Product– process– customer– distribution — finance– administration

By sorting the SWOT issues into the 6 planning categories one can delineate short- and long-term

priorities. This approach captures the collective agreement and commitment of those who will ultimately have to do the work of meeting the objectives.

The action plan then becomes “what shall the team do about the issues in each of these categories?” The planning process was developed into a 17-step process beginning with SWOT. This sorting step can be easily done since each issue is recorded separately on a single page called a planning issue. As Robert Stewart said at the time we developed it – “SWOT identifies all of the claims on management’s attention” The first prototype was tested and published in 1966; modifications were completed by 1973. The operational programme was first used to merge the CWS milling and baking operations with those of J.W. French Ltd. The process has been used successfully ever since.
By 2004 the system had been fully developed, and has proven to cope with today’s problems of setting realistic annual objectives without depending on outside consultants or expensive staff resources.

In conclusion, we boiled down the key advice to:
1) Give all members of staff the opportunity to submit their own personal views of what is Good and Bad/ Present and Future from their position in the business;

2) Urge staff to identify trivial issues, for that’s where the gold lies–not in the “Big Ideas”; and

3) Ask staff to write legibly and divide the ideas into the six classifications.
***********
In a final e-mail, Humph said:
“Yes, I am still consulting – rather coaching and a bit of mentoring. I will work in Monaco this coming week for Maia Institute to help them create a development plan to accelerate their research in a predictive model for trading foreign currency. “Then I will help Mortgage Plc create a development plan for competing with the high street mortgage lenders.
“In October I will give a seminar in Rumania for CODEC on “Team Action Management”–also a product of SRI”.
—Humph, 9/7/05

An alternative of this ‘letter’ is often quoted as (source unknown):

SWOT analysis came from the research conducted at Stanford Research Institute from 1960-1970. The background to SWOT stemmed from the need to find out why corporate planning failed. The research was funded by the fortune 500 companies to find out what could be done about this failure. The Research Team were Marion Dosher, Dr Otis Benepe, Albert Humphrey, Robert Stewart, Birger Lie.

It all began with the corporate planning trend, which seemed to appear first at Du Pont in 1949. By 1960 every Fortune 500 company had a ‘corporate planning manager’ (or equivalent) and ‘associations of long range corporate planners’ had sprung up in both the USA and the UK.

However a unanimous opinion developed in all of these companies that corporate planning in the shape of long range planning was not working, did not pay off, and was an expensive investment in futility.

It was widely held that managing change and setting realistic objectives which carry the conviction of those responsible was difficult and often resulted in questionable compromises.

The fact remained, despite the corporate and long range planners, that the one and only missing link was how to get the management team agreed and committed to a comprehensive set of action programmes.

To create this link, starting in 1960, Robert F Stewart at SRI in Menlo Park California lead a research team to discover what was going wrong with corporate planning, and then to find some sort of solution, or to create a system for enabling management teams agreed and committed to development work, which today we call ‘managing change’.

The research carried on from 1960 through 1969. 1100 companies and organizations were interviewed and a 250-item questionnaire was designed and completed by over 5,000 executives. Seven key findings lead to the conclusion that in corporations chief executive should be the chief planner and that his immediate functional directors should be the planning team. Dr Otis Benepe defined the ‘Chain of Logic’ which became the core of system designed to fix the link for obtaining agreement and commitment.

  1. Values
  2. Appraise
  3. Motivation
  4. Search
  5. Select
  6. Programme
  7. Act
  8. Monitor and repeat steps 1 2 and 3

We discovered that we could not change the values of the team nor set the objectives for the team so we started as the first step by asking the appraisal question ie what’s good and bad about the operation. We began the system by asking what is good and bad about the present and the future. What is good in the present is Satisfactory, good in the future is an Opportunity; bad in the present is a Fault and bad in the future is a Threat. This was called the SOFT analysis.

When this was presented to Urick and Orr in 1964 at the Seminar in Long Range Planning at the Dolder Grand in Zurich Switzerland they changed the F to a W and called it SWOT Analysis.

SWOT was then promoted in Britain by Urick and Orr as an exercise in and of itself. As such it has no benefit. What was necessary was the sorting of the issues into the programme planning categories of:

  1. Product (what are we selling?)
  2. Process (how are we selling it?)
  3. Customer (to whom are we selling it?)
  4. Distribution (how does it reach them?)
  5. Finance (what are the prices, costs and investments?)
  6. Administration (and how do we manage all this?)

The second step then becomes ‘what shall the team do’ about the issues in each of these categories. The planning process was then designed through trial and error and resulted finally in a 17 step process beginning with SOFT/SWOT with each issue recorded separately on a single page called a planning issue.

The first prototype was tested and published in 1966 based on the work done at ‘Erie Technological Corp’ in Erie Pa. In 1970 the prototype was brought to the UK, under the sponsorship of W H Smith & Sons plc, and completed by 1973. The operational programme was used to merge the CWS milling and baking operations with those of J W French Ltd.

The process has been used successfully ever since. By 2004, now, this system has been fully developed, and proven to cope with today’s problems of setting and agreeing realistic annual objectives without depending on outside consultants or expensive staff resources.

The seven key research findings

The key findings were never published because it was felt they were too controversial. This is what was found:

1) A business was divided into two parts. The base business plus the development business. This was re-discovered by Dr Peter Senge at MIT in 1998 and published in his book the 5th Dimension. The amount of development business which become operational is equal to or greater than that business on the books within a period of 5 to 7 years. This was a major surprise and urged the need for discovering a better method for planning and managing change.

2) Dr Hal Eyring published his findings on ‘Distributive Justice’ and pointed out that all people measure what they get from their work and divide it by what they give to the work and this ratio is compared to others. If it is not equal then the person first re-perceives and secondly slows down if added demands are not met.

3) The introduction of a corporate planner upset the sense of fair play at senior level, making the job of the corporate planner impossible.

4) The gap between what could be done by the organisation and what was actually done was about 35%.

5) The senior man will over-supervise the area he comes from. Finance- Finance, Engineering-Engineering etc.

6) There are 3 factors which separate excellence from mediocrity:

a. Overt attention to purchasing

b. Short-term written down departmental plans for improvement

c. Continued education of the Senior Executive

7) Some form of formal documentation is required to obtain approval for development work. In short we could not solve the problem by stopping planning.

In conclusion

By sorting the SWOT issues into the 6 planning categories one can obtain a system which presents a practical way of assimilating the internal and external information about the business unit, delineating short and long term priorities, and allowing an easy way to build the management team which can achieve the objectives of profit growth.

This approach captures the collective agreement and commitment of those who will ultimately have to do the work of meeting or exceeding the objectives finally set. It permits the team leader to define and develop co-ordinated, goal-directed actions, which underpin the overall agreed objectives between levels of the business hierarchy.

Albert S Humphrey
August 2004


Not what… why

December 2, 2008

When situations are difficult it is easy to remain task focused (what), but does this help us maintain a future resistant approach?

Schein in “organizational Culture and leadership”  says “what happens in organizations is fairly easy to observe, but in the effort to understand why such things happen, culture as a concept comes into its own”

If leadership is the key to the future success of our organisation then culture is the lock. In a world where we are very short term-ist (just look at the financial markets) we think that we understand the ‘what’ i.e. what needs to be done, but this will again only have a short term impact. The UK gov has seen this first hand with the bailout of the finance sector. We need to “get under the surface” and understand why and change the behaviours.

This is the important of the longer term and longer vision.

In this article there is a challenge to the paralysis by analysis that can catch people who are unaware:

ASK WHAT, NOT WHY

Reckoning with your mind in order to free up your capacity for wisdom is the ongoing battle of life. For some, the battle is constant; others are not as affected. Regardless of which category you fall into, this chapter will give you the first tool for accessing the wisdom that can change your life. It’s a tool you use every day: the ordinary, common question.

One of the most common questions we ask is “Why?” “Why” is the language of seeking to understand. When we were young children, we used this question to figure out how the world works: “Why is the sky blue?,” “Why did Sparky run away?” As we get older, we still use “why” to bring our circumstances into alignment with our ability to understand our world.

Unfortunately, “why” eventually loses its power to move us forward; instead, we get “stuck” by obsessing over questions like “Why did that happen?,” “Why am I this way?,” and “Why aren’t I better-thinner-smarter?” 

 Without Why we would not progress, we would not innovate, we would not learn – copy by rote yes.. learn.. no. Anyone that has had children know very well those years where almost every question was “why” – why is a wonderful learning based question – it gets knocked out of most children by the age of 7 – a shame.

In Organisational Development the why is not just an important tools – it is the ONLY real tool. Without understanding why making any change is dangerous. In her book “the innovation equation” Byrd outlines eight orientations of innovative behaviour, one of those is the “modifier” who makes incremental changes without understanding the culture or context. this can be a dangerous activity if unchecked.

WE need to ensure that before we undertake any organisational development activity that we understand the “why”… the culture… or context in which the decision needs to be made.

many managers and leaders can be successful in one organisation but not in another  this is all down to the extent to which they can change the culture or context to match their strengths.

Over the years i have worked with many business owners and entrepreneurs that wanted to change the culture of their business, but did not realise that they were the culture – when the culture was changed (at their request) from the bottom up, often they were very uncomfortable and did not adjust – one of three things happen – they revert to the old culture or they leave or the company goes bust.

We all need to ask Why a Little more often and learn to understand the culture before proposing changes – at any level in organisations.


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