IMPACT OF GLOBAL LEADERSHIP PERSPECTIVE ON THE SOUTH AFRICAN REALITY

1
ORGANISATIONAL DEVELOPMENT AND CHANGE KNOWLEDGE
EXCHANGE GROUP
June 2009
2
IMPACT OF GLOBAL LEADERSHIP PERSPECTIVE ON THE
SOUTH AFRICAN REALITY
3
AGENDA

• INTRODUCTION
• CONTEXT OF CURRENT GLOBAL SITUATION - PESTEL
• INSIGHTS FROM LEADERS
• SOUTH AFRICAN REALITY - PESTEL
• HOW SHOULD OD RESPOND TO THIS

4
INTRODUCTION OF SPEAKERS

• Unathi Mdlungu Phulo Organisational Development
• Louise Niemand Phulo Organisational Development
• Beatrice Attrill Independent OD Consultant
• Ruwayne Kock The Human Resource Practice

5
INTRODUCTION

• Introduction to session
• Format of session
• Expectations of delegates

6
CONTEXT OF CURRENT GLOBAL SITUATION - PESTEL

• Political
• Economical
• Social
• Technological
• Environmental
• Legal

7
PESTEL ANALYSIS

• Political Impact unrest in countries (Africa,
  Iran), conflict between countries (Iran and USA),
  availability of nuclear technology (N-Korea,
  Pakistan, Israel, USA, USSR)
• Economical Impact current credit crunch (UK and
  USA hardest hit), rise of China and India,
  business revenue down between 20 30, markets
  decline
• Social Impact global levels of poverty
  increasing, shrinking foreign aid mainly due to
  economy, current state in developmental states
  such as Zimbabwe, Somalia and Iraq

8
PESTAL ANALYSIS

• Technological Impact rapid development of new
  technologies, new sources of energy,
  mechanisation, medical research, ICT and food
  security
• Environmental Impact global warming, need for
  energy, access to sufficient clean water
• Legal Impact trade agreements, creation of
  Unions (EU and AU), competition commissions/
  boards, possibility of King 111 report, new
  Companys Act

9
INSIGHTS FROM LEADERS

• Leaders suggests the following key strategic
  responses in the next six months?
• Stick to vision and review strategy
• Redefine and re-build core communities
• Ensure every cent and minute deployed in
  alignment to strategy
• Explore new opportunities for leadership and
  innovation
• Source Leadership Insights from three
  Continents (2009), WorldsView Consulting

10
Stick to vision

• Test organisational strategy
• Do not follow previous decisions blindly
• Focus on growth and better, simpler execution
  strategies
• Revisiting fundamental business principles, core
  purpose and values
• Go back to basics

11
Internal Communities

• Disclosure and consultation
• Managing of uncertainty
• Need for meaningful engagement align peoples
  energy, commitment, support and passion to
  strategy
• Review of talent management and high potential
  programmes
• Centralised decision making
• Exposing younger leaders to current global
  situation
• Exposing non-value adding staff

12
External Communities

• Get close to your customers
• Non traditional solutions to customer problems
• Appreciating where customer is in tough times
• Financial health
• Current functioning
• Create relationships with various stakeholders,
  even previous competition

13
Alignment

• Cut the fat and not the muscle
• Optimise resources and redeployment
• Review/ cut operational expenditure- 12,5 cut
  will lead to break even, 25 cut will lead to
  satisfying stakeholder desire for 10 EBIT
• Measure peoples contribution to strategy
  attainment
• Speed up consultation and execute smartly/
  quickly
• Focus on what you know and can do best

14
Innovation

• Create new relationship/ review old relationship
  collaboration with all players in value chain
• Leverage networks hard
• Best level of delivery at greatest level of
  variable cost
• Focus on interfaces and understanding dynamics of
  change
• Seeing organisations as open systems

15
SOUTH AFRICAN REALITY -PESTEL

• Politics Elections in April 2009. ANC won 8 of
  9 provinces, changes in and increase of Cabinet,
  New and changed Government Departments mandates
  in both National and Provincial spheres,
  Tripartite relationship ANC, Cosatu and SACP,
  possible looming strikes amidst economic downturn
• Economy downturn felt in South African Economy
  and seen in job losses especially in
  manufacturing and mining sectors, reduction in
  GDP, possibility of changing economic policy,
  high need for imports, exporting of raw material
  without developing skills to create products

16
SOUTH AFRICAN REALITY

• Social increase in poverty, high levels of
  crime and corruption, Poverty alleviation and job
  creation main aims of ANC and Government,
  Expanded Public Works Programme, Youth
  Development Agency, FIFA 2010, Free Education
  until Matric, increase in social spending (e.g.
  grants, UIF, pension fund etc)
• Technology broadband and internet access more
  accessible with new optic fibre cable, Gauteng
  freeway improvement project, BRT systems in major
  cities, other energy sources (Eskom), movement to
  digital technological operations

17
SOUTH AFRICAN REALITY

• Environment changes in weather patterns
  observed, land re-distribution vs. conservation,
  signed KYOTO protocol, tension between
  conservation vs. economic growth
• Legal Legislation review due to changes in
  Government Departments, Consumer Protection Act,
  National Credit Act, National Health Insurance
  Proposal, National Companys Act, King 11 and
  possible King 111 reports (governance)

18
WHAT IS ODs ROLE IN THIS?
19
Definitions of OD

• Organisational development is an effort planned
  organisation wide and managed from the top to
  increase organisational effectiveness and health
  through planned interventions in the
  organisations processes using behavioural
  science knowledge (Beckhard, 1969, p9)
• Organisational development is a response to
  change, a complex educational strategy intended
  to change the beliefs, attitudes, values and
  structure of the organisations so that they can
  better adapt to new technologies, markets and
  challenges and the dizzying rate of change itself
  (Bennis, 1969, p2).

20
Definitions of OD

• ..... improving organisations by applying
  knowledge from behaviour science - psychology,
  sociology, cultural anthropology and related
  disciplines. If improvement of the
  organisational functioning means change, then
  broadly defined, OD means organisational change
  (Burke, 1982, p3).
• Organisational development is a top management
  supported long-range effort to improve an
  organisations problem solving and renewal
  processes with the assistance of a consultant
  facilitator and the use of the theory and
  technology of applied behaviour science including
  action research (French Bell, 1990)

21
Definitions of OD

• Van Tonder Roodt (2008) defined OD from a South
  African perspective. They define OD as a
  scientific discipline and practice field
  concerned with the multi-faceted change
  processes, primarily of a planned and sustainable
  nature, with the purpose of enhancing the
  adaptive and self renewing capabilities of the
  organisational system in response to or in
  anticipation of shifts in stakeholder needs or
  demands through the application of behaviour
  science knowledge and technology that will
  contribute to improved individual, organisational
  and social well-being.

22
Key characteristic of OD

• OD is a long-range perspective
• OD should be supported by top management
• OD effects change
• OD empowers the system to take responsibility for
  achieving and evaluating results. Rothwell
  Sullivan (2005)

23
Exercise

• Why care about OD?

24
Importance of OD

• Powerful set of OD theories and practices aimed
  at increasing organisational productivity and
  fostering individual well-being.
• It had humble roots that were enhanced to reach
  their full potential and to reap the best
  benefits from applications of OD practices within
  certain settings.

25
Exercise

• How do you use OD in your organisation?

26
Application of OD

• OD engages
• People within and among human systems
  (organisation) in activities (interventions)
  intended to bring about positive change.
• For specified clients and stakeholders.
• Direction towards the improvement of human
  conditions guided by humane values by means
  of significant application of knowledge rooted in
  social and behavioural sciences.
• (Massarik Pei-Carpenter, 2002)

27
Exercise

• How does OD relate to change?

28
ODs relationship to change

• Traditionally Organisational Development has
  dealt with interventions to improve the
  organisations people functioning in the
  here-and-now, accepting and not questioning the
  soundness of the bigger organisational setting.
• Organisational Transformation, which historically
  came after Organisational Development involves
  more future orientated interventions aimed at
  changing the total organisational landscape

29
ODs relationship to change

• However, transformation within South African
  context would be inappropriate due to the unique
  focus on employment equity and black economic
  empowerment.
• Therefore, Organisational Development and Change
  (ODC) are used to reflect this trend and involve
• the establishment and reinforcement of change.
• Strategy, structure and process changes.
• Improving organisation effectiveness
• (Corporate Leadership Council, May 2003)

30
Exercise

• Why has OD become important for HR?

31
The Changing Face of HR
HR Transaction and Administration functions are
being enabled through leading edge e-HR solutions
Today
Future
Time, Effort, Cost
Align HR activities and programmes with the
strategic direction and business needs of the
organisation
5
20
Strategy
Strategy
Develop and deliver programmes that enhance the
organisations ability to attract, develop and
retain superior performers
Performance Enhancement
40
25
Performance Enhancement
Transactions
30
Handle employees transactions and enquiries
Transactions
20
Administration
Administration
20
40
Manage vendors, suppliers, budgets, and HR systems
Source Hay/McBer Company, presented by Lyle M.
Spencer,Jr.,PhD
32
Convergence Between HRM and OD

• Rothwell Sullivan (2005) affirms that HR should
  shift its focus
• To become more strategic in its thrust, by
  relegating highly transactional efforts (such as
  processing forms or recordkeeping) to outsourcing
  agents or downloading them onto employees to
  carry out.
• To become more oriented to human performance
  improvement or performance consulting, which
  helps operating managers to troubleshoot and
  solve people problems that exceed their skills.
  
• To help managers and workers to manage change,
  and that role links closely to OD.

33
Generic ODC Framework
34
Action Research OD Approach

• The ODC process (value chain) model consists of
  the following phases
• Contracting
• Diagnose
• Design
• Build
• Implement and
• Evaluation.

35
OD Value Chain

• Contracting phase involves the initial meetings
  with the client serve to validate the
  expectations regarding the timing and scope of
  the overall project.
• Diagnosis phase involves the development of a
  common context and understanding (between client
  and the consultant), current challenges and
  future direction.

36
OD Value Chain

• Design phase involves the identification of the
  major opportunities for performance improvement
  that are associated with existing processes,
  technology and human resources.
• Build phase involves the construction and testing
  of the business solution.

37
OD Value Chain

• Implementation phase involves the setting in
  motion the full suite of the process,
  technological and social changes that have been
  designed and built.
• Evaluate phase involves mechanisms to ensure that
  performance improvements resulting from the ODC
  intervention are sustained

38
Appreciative Inquiry Approach

• The traditional OD approach of problem diagnosis
  and feedback depleted the energy from the system
  and brought about discomfort among members which
  result in resistance
• Cooperrider et al., (2003)s Appreciative Inquire
  (AI) 4-D cycle consist of
• Define affirmative topic
• Discovery
• Dream
• Design
• Destiny phases

39
10 principles of appreciative inquiry
40
Appreciative Inquire 4-D Cycle
41
Integrative systemic perspective on organisations
Source Van Tonder Roodt (2008)
42
Technical system Interventions
43
Social system Interventions
44
Integration Interventions
45
Using OD to weather the economic turmoil

• In todays desperate world economy, the HR
  fraternity needs to take leadership in mediating
  the impact on people. Organisational development
  has an important role to play to create
  organisational effectiveness. In particular,
  organisational development initiatives need to
  focus on
• Increase organisational agility
• Improve employee morale
• Engage employees
• Build change resilience

46
Using OD to weather the economic turmoil

• Organisations need to focus on both the hard and
  soft people issues. The soft people issues focus
  on the change process to create an effective
  organisational structural design whereas the hard
  issues focus on the change process to enhance the
  effectiveness of an organisations culture