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Chapter 13: Organization Culture and Design Interventions
Organization Culture Assessment and Change (1 of 7)
Language, metaphor, and jargon.
Communication (patterns and media).
Artifacts.
Stories, myths, and legends.
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Language, metaphor, and jargon: How organizational members speak to one another, using what terms. An example is whether organizational members are referred to as “associates” (some retail stores), “individual contributors” (some corporate environments), or “cast members” (such as at Disneyland). Organizational members develop specialized acronyms and terms that often only they understand.
Communication (patterns and media): Who communicates to whom, on what topics, using what media. In some large organizations, the highest leaders send e-mail to all employees, while in others in-person communication is preferred. These choices can be situation- or topic-dependent as well.
Artifacts: For example, pictures or posters on the wall, lobby decor, or dress style. Some organizations have explicit rules for who is permitted what size office, with what furniture style, or even what model of phone or cell phone calling plan is authorized.
Stories, myths, and legends: What stories from the past resonate with organizational members to recall lessons and learnings from positive or negative events. An organization that has undergone an especially traumatic event, such as a bankruptcy, is likely to have a set of stories and assumptions that are repeated to guide new decisions in order to avoid repeating historical mistakes.
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Organization Culture Assessment and Change (2 of 7)
Ceremonies, rites, and rituals.
Values, ethics, and moral codes.
Decision-making style.
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Ceremonies, rites, and rituals: These are formal and informal gatherings or recurring events in which a standard “script” seems to be followed. Examples include a corporate picnic or holiday party, initiation rites such as those in a fraternity or sorority, or even repetitive events such as annual sales conferences, staff meetings, or performance appraisals.
Values, ethics, and moral codes: Doing what is “right” may mean doing it quickly in one organization or doing an exhaustive study of all possible options in another organization. Organizations have espoused values, those that they explicitly articulate, and hidden underlying values, those that guide decision making but about which organizational members are usually less conscious.
Decision-making style: Including what information is needed before a decision is made, who is consulted, whether opinions are freely offered, who makes the final decision, and how it is communicated.
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Organization Culture Assessment and Change (3 of 7)
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Figure 13.1: Organizational Culture.
Elements of culture can be visible, such as styles of dress, office spaces, and language choices, and they can also be invisible or hidden, such as the organization’s values, ethical beliefs, and preferences.
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Organization Culture Assessment and Change (4 of 7)
Schein’s culture assessment.
Organizational Culture Assessment Instrument.
Clan.
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Schein’s culture assessment: It involves focus groups because groups and teams create culture; so he argues that the data used to understand the culture should also come from groups, not individual surveys. Schein’s assessment of culture is qualitative, which has been the dominant way of studying culture.
Organizational Culture Assessment Instrument: It is a quantitative methodology where organizational members complete individual surveys to give change agents insight into the culture. By comparing organizations on dimensions such as internal versus external focus and preferences for flexibility or control, the “competing values framework."
Clan: People strongly identify with the group, as in a family, placing a strong emphasis on the team and teamwork. Organizational members are loyal and friendly.
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Organization Culture Assessment and Change (5 of 7)
Adhocracy.
Hierarchy.
Market.
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Adhocracy: Innovation is prized, with organizational members having a large amount of independence and autonomy. The organization emphasizes developing cutting-edge products and services and leading the market.
Hierarchy: Tradition and formality are dominant values. The emphasis is on stability, rules, and efficient processes.
Market: Organizational members are competitive, hardworking, and demanding. Productivity and beating the competition are emphasized.
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Organization Culture Assessment and Change (6 of 7)
Different quadrants have different mind-set.
Culture and organizations.
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Different quadrants have different mind-set:
In the hierarchy quadrant, for example, change is generally approached incrementally, as might happen if the wording on a contract were changed to reflect a new legal phrase.
In the adhocracy quadrant, change is likely to be transformational, reengineering the organization’s entire approach to contracting.
The market quadrant emphasizes changes that are fast to respond to competitive threats, and the clan quadrant seeks change that is long term, involving employees and reaching consensus to ensure that changes stick.
Culture and organizations: Organizations rarely fit one of these categories precisely; instead, they have elements of each cultural type to a greater or lesser degree.
Culture may be a problem or need to be considered for change if elements of the culture or the environment are incongruent with one another.
Thus, the OCAI can help change agents understand broad patterns of cultural values across the organization and open up conversations with organizational members about how the culture can be changed.
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Organization Culture Assessment and Change (7 of 7)
The competing values framework.
Cameron and Quinn Process.
Schein’s process.
Four quadrant competing values framework.
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The competing values framework: It can be used as a way of discussing and creating culture change. Where there is an imbalance from the culture today to the culture needed for the future, the CVF can help leaders and employees articulate what this shift means.
Cameron and Quinn Process: They offer a process for changing organizational culture, a process that can usefully accompany an organization design transition:
Use the competing values framework to identify the current culture profile.
Next, the group should identify the organization’s future or preferred culture profile.
The group should discuss what any changes mean and do not mean.
The group should create an action plan, identifying areas of strength to build on in the existing organization.
There should be a discussion of supporting mechanisms for the change such as leadership development, rewards and metrics, and communications throughout the organization.
Schein’s process: Subteams, often from different parts of the organization, are asked to do the following:
Describe the organization’s existing culture, including specific examples of artifacts, rituals, and language.
Define the organization’s explicitly articulated values.
Analyze whether the values fully explain the existence of the artifacts or whether there are underlying assumptions that amount to additional hidden cultural values.
Describe how the explicit or hidden values inhibit or strengthen how the organization achieves its goals.
Share any subcultural differences among the teams.
Discuss and come to agreement on action plans to change the negative cultural values.
Four quadrant competing values framework: Cameron, Quinn, DeGraff, and Thakor describe an individual leadership assessment, using the four quadrant competing values framework, to measure leadership competencies required for each quadrant.
The assessment presents a leader with feedback on the following competencies:
Clan: leading through teamwork, leading through interpersonal relationships, leading the development of human capital, leading through cooperation and community, leading through compassion and caring.
Adhocracy: leading through innovation and entrepreneurship, leading the future, leading through improvement and change, leading through creativity, leading through flexibility and agility.
Market: leading through competitiveness, leading through customer relationships, leading through speed, leading with intensity, leading for results.
Hierarchy: leading through rational analysis, leading through information clarity, leading through high reliability, leading through processes, leading through measurement.
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Organization Design (1 of 11)
Structural changes.
Purpose of a design effort.
Leadership competency.
Structure and Design.
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Structural changes:
They often fail to achieve their desired outcomes, which frequently occur when organizations approach design activity as a knee-jerk reaction to other problems or alter the organizational structure without considering larger implications.
The organization may be a new division or may have grown substantially.
The organization may have outgrown its previous model due to size or complexity, or a change in strategy or major acquisition prompts the company to rethink an outdated model.
Purpose of a design effort:
According to Jay Galbraith, the purpose of a design effort is to develop consistency between the organization’s strategy, goals, and structure.
Organization design is conceived to be a decision process to bring about a coherence between the goals or purposes for which the organization exists, the patterns of division of labor and interunit coordination and the people who will do the work.
This implies that the organization must be clear about its strategy, customers, and the processes by which the organization delivers value to customers.
Galbraith, Downey, and Kates recommend that “the design process always begins with reviewing the strategy."
Leadership competency: Kesler and Kates refer to organization design as a leadership competency, but they note that while many leaders focus attention and receive development in the areas of strategy and talent management, organization design receives considerably less attention, though it has a significant impact on the achievement of the strategy.
Structure and Design: The terms structure and design are often used synonymously, but they are not the same.
An organization’s structure tends to refer to the ways in which boxes are drawn on organizational charts, whereas design refers not only to the structure but also other elements that support the structure.
Design has several components, all of which must be in alignment and must support one another to produce a capable, effective organization.
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Organization Design (2 of 11)
Galbraith’s Star Model.
McKinsey 7S framework.
Five-phase process for an organization design change.
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Galbraith describes five components of an organization’s design that he terms the star model:
Strategy: The organization’s direction and long-term vision.
Structure: Roles, responsibilities, and relationships among functions.
Processes and lateral capability: Decision-making processes, integrative roles, and cross-functional collaboration mechanisms.
Reward systems: Compensation and recognition, goals and measurement systems.
People practices: Hiring, performance reviews, and training and development.
When any aspect of the star model is out of alignment with the rest of the model, the organization’s performance suffers.
If reward systems do not explicitly articulate tangible and intangible recognition in support of the goals and objectives, the organization may be rewarding the wrong activities.
In Search of Excellence: A second model of organization design appeared in Peters and Waterman’s book In Search of Excellence, in which they explain that organizations are more than their structures alone. The framework became known as the McKinsey 7S framework after the authors’ consulting work at the well-known company. Similar to the star model above, the 7S framework acknowledges the interconnection of multiple issues in an organization’s design beyond strategy and structure.
Stanford suggests a five-phase process for an organization design change:
Preparing for change: This includes assessing the current organizational structure, assessing the organization’s strategy, and outlining objectives for a new design.
Choosing to redesign: An organization design change can be highly disruptive. Once word leaks that a new structure is imminent, employees may begin to feel anxiety over the transition to a new team, new manager, or new job. Gaining feedback from a large group of stakeholders on the criteria for a new design can help to assess the prospects for a successful transition.
Creating the high-level design: Developing alternative scenarios and evaluating them against tests such as those described below. This includes considering not only alternative structures, but how the structure will affect processes, rewards systems, metrics, people selection, and skill development.
Handling the transition: This involves communicating plans to employees and helping them through the transition.
Reviewing the design: Components of this review include evaluating the results of the new structure, measuring outcomes, and making adaptations or any new changes.
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Organization Design (3 of 11)
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Figure 13.4: Star Model.
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Organization Design (4 of 11)
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Figure 13.5: McKinsey 7S Framework.
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Organization Design (5 of 11)
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Galbraith et al. offer an instructive diagnostic chart to help identify areas of misalignment in the organization’s design.
Figure 13.6: Unaligned Organization Design
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Organization Design (6 of 11)
Common Organizational Structures
Functional structure.
Unit structure.
Matrix structure.
Network structure.
Boundaryless and process structure.
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Functional Structure:
Divisions are organized by the type of work they do, so that divisions of marketing, finance, sales, manufacturing, product development, and so on are led by a single executive who reports to a chief executive officer.
Disadvantages of the functional structure include interdepartmental coordination and complexity.
When the organization becomes more complex, with multiple products, services, and markets, the demands placed on the functional structure can exceed the capacity of the system to cope with the decisions and information needed.
Thus, the functional structure is best for smaller companies with fewer product lines that have a long life cycle.
Unit Structure:
A unit structure divides responsibilities by the market, product, service, or geography that the unit serves.
When implemented at its fullest, in a unit structure each unit has its own human resources, information technology, finance, sales, and marketing departments.
With a product structure, coordination and focus within a single unit are clear, since in the auto loan department there are specialists who work solely on auto loans, and attention is not diverted to the special and distinct challenges of mortgage loans.
Decisions can sometimes be made more rapidly because each department controls the resources needed for rapid implementation.
In a geographic version of a unit structure, resources can be placed physically closest to where the work happens, and the structure offers the advantage of local customization and knowledge of regional customer needs.
Matrix Structure:
A matrix form, the specialist functions and unit functions both exist, in some respects. Imagine a technology company that manufactures personal computers, printers, software, and handheld devices.
Each of those latter functional groups would have a leader to oversee the company’s overall strategy for that division.
Matrix organizations work especially well under three conditions:
First, they work well when there exist pressures for multiple areas of focus, such as when a group needs to focus on both technical expertise in a certain field and unique customer requirements of a given market.
Second, matrix organizations work well when the work is especially complex or interdependent and additional coordination is required. When people are interdependent in multiple ways, a matrix may help to improve communication patterns.
Finally, a matrix is appropriate when resources need to be shared for maximum efficiency.
Network Structure:
It reduces the organization’s functions down to its central competencies, and a network of suppliers and partners provides services that the organization does not consider central.
They may work with local distributors or third-party providers who may sell directly to customers on behalf of the company, but these distributors are independent entities, not in-house sales agents.
In some networked organizations, the “external” suppliers may be so tightly integrated with the organization’s people, processes, and technology that the line between being internal and external to the organization is blurred.
The organization therefore becomes a “broker” of services among the various players.
Network organizations can be cost-effective and flexible, and they can focus the organization on its central purpose.
They can also cause problems when the organization must rely on the performance of an external company over which it may have little control.
Boundaryless and Process Structure:
This design emerged primarily in high-technology companies where creativity and innovation, along with rapid product development cycles and quick time to market, were necessary to remain competitive.
The boundaryless design breaks down the traditional hierarchy and replaces it with cross-functional, often self-managed teams that form and restructure as the business changes.
Roles, titles, jobs, and teams are no longer rigidly built into the structure of the organization but negotiated and flexible, depending on the needs of the organization.
The ability to rapidly form teams, set objectives, adapt to change, and build relationships are all key skills in the boundaryless organization.
The task of leadership and management is particularly challenging in the boundaryless organization, as old ways of managing in the traditional hierarchy no longer apply.
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Organization Design (7 of 11)
Lateral Capability
Enables enhancing connections.
Networks.
Lateral processes.
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Enables enhancing connections: To compensate for the flaws in a chosen structure, organization designers develop lateral capabilities, or horizontal mechanisms that enable the organization to enhance connections between groups or divisions created by the structure. Whereas the structure develops the vertical organization by creating departments and groups with common objectives, lateral practices help the organization share information across these boundaries.
Networks: Networks can facilitate information sharing across department boundaries by exposing members of one group to those in another. Imagine making an acquaintance in another division at a training program or office party, then later needing a contact in that division to help solve a problem you are experiencing.
Lateral processes: A lateral process is a key organizational process that crosses major divisions. Consider a process such as new product design, which might involve employees from service, sales, marketing, operations, and research and development.
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Organization Design (8 of 11)
Lateral Capability
Teams.
Integrative roles.
Matrix structures.
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Teams: Cross-functional teams can be established in which members maintain relationships on the team as well as in their division. A product sales team, with representatives from each geography, can meet regularly to share best practices and solve problems they have in common related to selling a particular product.
Integrative roles: Integrative roles are formal positions with the responsibility to share information across the structure. A marketing liaison who works in customer support might gather all customer problems on a regular basis, meet with the marketing team, and then bring back information to customer support on upcoming product releases and marketing initiatives.
Matrix structures: These are not only a structure but a lateral capability as well. By implementing structural relationships at multiple levels, the matrix structure attempts to compensate for maximizing one element of the structure (product) with another (geography). Thus, it formalizes information sharing across groups within the structure.
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Organization Design (9 of 11)
Tests of a Good Design
Change agents evaluates design’s ability.
Strategic factors.
Social and cultural factors.
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Change agents evaluates design’s ability: Nadler and Tushman suggest that change agents evaluate the design’s ability to contribute to the strategy and task needs of the organization while appropriately fitting with its social and cultural environment.
Strategic factors: This includes a design that does the following:
Supports the implementation of strategy.
Facilitates the flow of work.
Permits effective managerial control.
Creates doable, measurable jobs.
Social and cultural factors: This include examining how:
Existing people will fit into the design,
The design will affect power relationships among different groups,
The design will fit with people’s values and beliefs,
The design will affect the tone and operating style of the organization.
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Organization Design (10 of 11)
Tests of a Good Design
The market advantage test.
The parenting advantage test.
The people test.
The feasibility test.
The specialist cultures test.
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The market advantage test: If the organization serves customer segments differently in different geographies, then having geographic divisions makes sense. No customer segment should be missed, and ideally no segment should be served by multiple divisions in order to provide maximum focus.
The parenting advantage test: Parent organizations should organize in ways that allow them to provide the most value to the rest of the organization. If innovation is a key value of the parent company, has it organized in ways that maximize innovation throughout the organization?
The people test: The design should support the skills and energy of the people in the organization. If the design requires that the head of engineering also manage finances, and finding a single replacement for those dual specialized skills is unlikely if the current leader were to leave, the design may be risky. In addition, the design may be risky if it will frustrate valuable employees who may lose status in the new structure.
The feasibility test: Will the design require a major cultural shift, such as a matrix design in a culture very comfortable with rules and hierarchy? Will information technology systems require drastic, expensive changes to report performance by customer industry versus geography?
The specialist cultures test: Some organizational units maintain different subcultures for good reasons. A group focused on the company’s core products may think of innovation as a gradual series of incremental improvements to existing products, but a new products division may need rapid innovation for products that have a short life cycle. Combining R&D from both divisions may result in a dangerous culture clash.
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Organization Design (11 of 11)
Tests of a Good Design
The difficult-links test.
The redundant hierarchy test.
The accountability test.
The flexibility test.
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The difficult-links test: How will divisions in the new structure develop links between them, and who will have authority when conflicts arise? If six divisions each have separate training functions, how will they coordinate the use of instructional resources such as classrooms and trainers?
The redundant hierarchy test: To what extent are layers of management necessary to provide focus, direction, or coordination for the units in their scope? If the purpose and value of a level of management is the same as the ones below it, it may be unnecessary.
The accountability test: Does the design streamline control for a single unit, or is authority, and accountability, diffused among different units? Will it encourage units that cannot collaborate to blame one another for poor performance?
The flexibility test: How will the new organization react when a new product is to be designed? Is it clear how the organization would work if the strategy were to change? Does the design actually obstruct and confuse rather than streamline and clarify?
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Chapter 14: Sustaining Change, Evaluating, and Ending an Engagement
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Sustaining Change (1 of 3)
Creating change is difficult enough, but often members revert to previous ways after an intervention. Why?
Change agent is no longer watching; the change isn’t given the attention it was earlier.
The change requires more attention or dedication than we have to give.
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Sustaining Change (2 of 3)
Creating change is difficult enough, but often members revert to previous ways after an intervention. Why?
Organizational members may lack the skills to sustain the change.
The culture keeps pushing members back to old ways.
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Sustaining Change (3 of 3)
There is a danger in overemphasis on sustaining change, as it may inhibit the next attempt at change when the organization needs to make the next improvement.
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Mechanisms for Sustaining Change
Periodic team meetings.
Organization sensing meetings.
Periodic intergroup meetings.
Renewal conferences.
Goal-directed performance review.
Periodic visits from outside consultants.
Rewards.
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Evaluating OD Effectiveness (1 of 3)
“The evaluation process of OD practice can be compared to an annual physical examination—everyone agrees that it should be done, but no one, except a highly motivated researcher, wants to go to the trouble and expense of making it happen” (Burke, 1987).
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Evaluating OD Effectiveness (2 of 3)
Why is evaluation so rarely done?
Consultants’ lack of evaluation training.
Overreliance on quantitative, positivist designs.
Perceived lack of time for conducting evaluation.
No request by the client.
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Evaluating OD Effectiveness (3 of 3)
Why is evaluation so rarely done?
Change is a moving target.
No one takes responsibility for it (or the OD “lone ranger”).
Fear of evaluation.
Not part of many OD models/theories.
Fuzzy goals to begin with.
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What Can Be Evaluated? Examples of Process and Outcome Variables (1 of 3)
Individual, Team productivity.
Job satisfaction.
Satisfaction with coworker.
Satisfaction with manage:
Trust, communication, etc.
Belief in organization’s success.
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What Can Be Evaluated? Examples of Process and Outcome Variables (2 of 3)
Collaboration, conflict resolution, team role clarification.
Revenue.
Customer satisfaction, new customers, customer loyalty.
Work-cycle time.
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What Can Be Evaluated? Examples of Process and Outcome Variables (3 of 3)
Work quality.
Ability of client to manage this change alone next time.
Individual and Team learning/development.
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Evaluation Practice Tips (1 of 3)
See evaluation as both summative (looking back) and formative (looking forward) . . . more data gathering.
Key stakeholders have a stake in the success of the initiative and should have a voice in the evaluation (and interpretation).
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Evaluation Practice Tips (2 of 3)
Ask the client, “What will you do with the results?”
Identify the objectives during the contracting phase.
Use a combination of evaluation methods (qualitative, quantitative).
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Evaluation Practice Tips (3 of 3)
Evaluation is different for every intervention/client.
Maintain a “success story” file.
DON’T wait until the end—evaluation can be a continual process.
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Endings, Separation, and Exit (1 of 3)
Consulting is a temporary relationship—all engagements must come to an ethical end. Why “ethical”?
Stay too long, and you may risk developing a mutual dependency.
Separate too soon, and you may leave clients without the resources to continue on their own.
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Endings, Separation, and Exit (2 of 3)
How do you know when it’s time to end?
The contract has been concluded, or the results have been met.
Interest wanes in further work, evidenced by missed meetings, delays, boredom, neglecting commitments (both consultant and client).
The consultant wants the outcomes more than the client.
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Endings, Separation, and Exit (3 of 3)
Ending tip: Have an ending meeting to conclude intentionally.
As Weisbord puts it, “Better a clean death than lingering agony.”
Conduct an ending feedback meeting.
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