While most leaders understand the internal and external realities that require change, some senior leaders disconnected from the market or their employees impose top-down change without input from stakeholders. In this scenario, leaders sense a performance gap, diagnose the problems, and impose changes with little-to-no participant involvement.
I see two basic problems with this approach. First, the proposed change (the “what”) may not be optimal for stakeholders or very costly to the organization. Second, the change process (the “how”) often leads to unintended consequences such as employee resistance, customer defection, or negative brand image outcomes. Quite often, individuals in positions of authority see themselves in relation to external sources of identity and power—job title, salary, associates, or number of direct reports—commonly referred to as the ego. When one’s emotional security comes from external sources rather than internal sources—integrity to core principles or values—dependency might influence decisions. Therefore, threats to the ego tend to result in angry reactions in defense of one’s self-concept and desired social image.
The Organizational Development Difference
I have witnessed or been part of many organizational changes that did not involve employees or customers at any stage of the change process. Organizational development (OD) includes the development and involvement of those affected by the change. OD practitioners see employees as human beings, not objects. Anytime management fails to see the four dimensions of employees (i.e., the spiritual, psychological, emotional, and physical) they reduce them to ‘things’ that must be managed. This is an issue because we lead people and manage things, not the other way around.
OD’s central purpose is to create effective organizations. Effectiveness means balancing desired results with the capacities and capabilities to produce those results. Human Resources Management (HRM) focuses on human capital strategy, practices, and systems. OD takes a more holistic approach by changing organizational design, human resource development, individual and group interventions, work design, and strategic alignment of the organization with its external environment. It can operate at all levels of the organization: organizational, group, and individual. OD programs are based upon a systematic analysis of problems and top management actively committed to the change effort. OD is a system-wide application of behavioral science knowledge to the planned development and reinforcement of organizational strategies, structures and processes in order to improve an organization’s effectiveness.
The Roots of OD: Five Major Stages of Development
Understanding the developmental roots of OD creates a helpful perspective for learners. OD research and practices have evolved over the past several decades. In fact, there are five major stages of development for OD.
Laboratory Training or T-groups
These are small, unstructured groups in which participants learn from their own interactions and evolving dynamics about such issues as interpersonal relations, personal growth, leadership, and group dynamics. Kurt Lewin and his staff began at the Research Centre for Group Dynamics at the Massachusetts Institute of Technology (MIT) in 1944. Lewin was a researcher, practitioner in interpersonal, group, intergroup, and community relationships laboratory Training. His training was known as Sensitivity Training or T-Groups.
Lewin’s Survey Feedback Process or Action Research
Kurt Lewin was also involved in the second movement that led to OD's emergence as a practical field of social[AS3] science. This second phase refers to the processes of action research and survey feedback. The action research contribution began in the 1940s with studies conducted by social scientists John Collier, Kurt Lewin, and William Whyte. They discovered that research needed to be closely linked to action if organization members were to use it to manage change.
Likert’s Participative Management Concepts
The intellectual and practical advances from the laboratory training and the action research/survey-feedback led to the belief that a human relations approach was the best approach to manage organizations. This belief was exemplified in research that associated Likert's Participative Management style with organizational effectiveness. This framework characterized organizations as having one of four types of management systems. Exploitative authoritative systems (system 1) exhibit an autocratic, top-down approach to leadership. Employee motivation is based on punishment and occasional rewards. Communication is primarily downward with little lateral interaction or teamwork. System 1 results in mediocre performance. Benevolent authoritative systems (System 2) are similar to System 1, except that management is more paternalistic. Consultative systems (System 3) increase employee interaction, communication, and decision-making. Although employees are consulted about problems and decisions, management still makes the final decisions. Participative group systems (System 4) are almost the opposite of System 1. Designed around group methods of decision-making and supervision, this system fosters high degrees of member involvement and participation. Work groups are highly involved in setting goals, making decisions, improving methods, and appraising results. Communication occurs both laterally and vertically.
Quality of Work Life
The contribution of the productivity and quality-of-work (QWL) background to OD can be described in two phases. The first phase, starting in 1950s, aimed at better integrating technology and people. These QWL programs involved joint participation by unions and management in the design of work and resulted in work designs giving employees high levels of discretion, task variety, and feedback about results. One characteristic of these QWL programs was the development of self-managing work groups as a new form of work design. A second definition of QWL defined it as an approach or method. People defined QWL in terms of specific techniques and approaches used for improving work. It was viewed as synonymous with methods such as job enrichment, self-managed teams, and labor-management committees. QWL programs expanded beyond their initial focus on work design to include other features of the workplace that can affect employee productivity and satisfaction, such as reward systems, workflows, management styles, and the physical work environment. Today, this second phase of QWL activity continues primarily under the banner of "employee involvement," (EI) rather than QWL.
The strategic change stage is a recent influence on OD's evolution. As organizations and their technological, political, and social environments have become more complex and more uncertain, the scale and intricacies of organizational change have increased. This trend has produced the need for a strategic perspective from OD and encouraged planned change process at the organization level Strategic change involves improving the alignment among an organization's environment, strategy, and organization design. The need for strategic change is usually triggered by some major such new regulatory requirements, a technological breakthrough, or modifications to the organization's core mission. Strategic change involves multiple levels of the organization and modification of its culture. The strategic change phase has significantly influenced OD practice, requiring OD practitioners to be familiar with competitive strategy, finance, and marketing, as well as team-building, action research, and survey feedback.
One very common mistake managers make regarding planned change initiatives is the top-down imposition of changes without any input from those affected; especially employees and customers. OD includes employees in the change process because of the valuable insights and perspectives they offer and as part of their professional development. Human resource development is an important dimension of OD; employees’ capacities, attitudes, capabilities, and motivation will ultimately determine the successful implementation of changes and sustaining those changes over time.
Organizational development, like human development, starts with courageous and honest self-examination. Coming to terms with one’s defense mechanisms, need for control, unmet needs, and buried emotions is a very difficult process. Many leaders take the easy road and seek to control their external world when they lack a feeling of control and integrity on the inside. Leaders must choose between conforming to cultural pressures and following the yearning of their true self that leads to abundance thinking. That inside-out private victory fosters a growth mindset and turns their focus toward followers’ intrinsic worth and development. When leaders discover their intrinsic worth that transcends performance, they see others as full human beings that need meaning, self-expression, learning (growth), and financial opportunities. They come to realize that authoritarianism provides a false sense of security and fosters dependency and anxiety as individuals become comfortable with compliance.
Changing business environments and disruptive competitors will require the collective intelligence and authentic relationships that challenge outdated assumptions and encourage conflicting views. When people become more important than things (i.e., money, ego protection) relationships built on trust and mutual concern will encourage creative ideas and synergy. Development and renewal of individuals, groups and entire organizations are essential to achieve desired goals at all levels.