High-Performing Systems and the Learning Organization

1
Chapter 14

• High-Performing Systems and the Learning
  Organization

2
Learning Objectives

• Recognize how learning organization approaches
  are used in OD change programs.
• Identify several basic OD intervention
  techniques.
• Experience and practice system approaches.

3
Cisco Tames Its Cowboy Culture(part 1 of 3)

• CEO Chambers initiated massive change at Cisco.
• Revolutionary change was companys only chance.
• Cisco examined every part including operations,
  priorities, and culture.

4
Cisco Tames Its Cowboy Culture(part 2 of 3)

• Before changes Cisco was described as wild west
  cowboy culture.
• Executives encouraged to compete with one
  another.
• Ideas were pursued with little discipline or
  accountability.

5
Cisco Tames Its Cowboy Culture(part 3 of 3)

• Market changed where customer expected Cisco to
  be integrated company.
• Cisco made changes once and deep.
• Chambers articulated changes, explained the
  vision, and explained why changes necessary.

6
System-Wide Interventions

• Certain OD interventions aimed at change within
  total system.
• OD is systems approach to group, functional, and
  interpersonal relations.

7
System Interventions Examine

• Organization design.
• Organization flow patterns.
• Interactions of individuals and groups.
• A system may be organization or subsystem within
  total organization.

8
Survey Research and Feedback

• Employee attitude surveys serve two important
  functions
• Improvement tool.
• Communication tool.

9
Steps in Survey Feedback

• Step 1 - Top management plans survey.
• Step 2 - Outside staff gives questionnaire.
• Step 3 - Outside staff summarizes data and gives
  feedback to organization.
• Step 4 - Work group diagnoses problems and
  develops action programs.

10
Results of Survey Research and Feedback

• Indicate positive changes in employee attitudes
  and perceptions.
• Greater involvement of all members produces
  greater change.
• Feedback given with other interventions, results
  in more substantial change.

11
Learning Organization (part 1 of 2)

• System-wide change program.
• Emphasizes reduction of organizational layers and
  involvement of all employees.

12
Learning Organization (part 2 of 2)

• Continuous self-directed learning that leads to
  positive change in individual, team, and
  organization.
• A learning organization has developed continuing
  capacity to adapt and change.

13
Approach to Learning Organization

• Brings together key members in collaborative
  process to discover problems.
• Then develops a model of new system.
• Continuous testing of experience and
  transformation into knowledge accessible to whole
  organization.

14
Our Changing World Cement Not Low-tech at
Lafarge? (part 1 of 3)

• Lafarge worlds biggest cement producer.
• Culture traced to its origins in 1833.
• The founders were committed to a form of humanism
  that still prevails in company today.

15
Our Changing World (part 2 of 3)

• Participative management philosophy includes
• Key for managers to develop their people.
• Employees share and seek experiences of others.
• Dealing with conflict integral to teamwork.
• Teamwork creates environment of trust.

16
Our Changing World (part 3 of 3)

• Important element is training.
• Managers required to monitor development of
  employees.
• Lafarge practices intensive communication so that
  its worldwide businesses understand operations.

17
Core Values of Learning Organizations (part 1 of
2)

• Value different kinds of knowledge and learning.
• Encourage communication between people with
  different perspectives.
• Develop creative thinking.
• Remain nonjudgmental of others and their ideas.

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Core Values of Learning Organizations (part 2 of
2)

• Break down traditional barriers in organization.
• Develop leadership throughout organization.
• Reduce distinctions between organization members.
• Every member of organization has untapped human
  potential.

19
Characteristics of Learning Organizations

• Constant readiness.
• Continuous planning.
• Improvised implementation.
• Action learning.

20
Reengineering a Radical Redesign

• Radical redesign of business processes to obtain
  drastic improvements in performance.
• Seeks to make all processes more efficient to
  gain quantum leap in performance.
• Emphasizes products, customer satisfaction, and
  improvement in processes.

21
Steps in Reengineering Process

1. Identify key business process.
2. Identify performance measures.
3. Reengineer the process, organize work around
   process, not functions.
4. Implement redesign process and continuing
   reevaluation.

22
System 4 Management

• Likert developed System 4 management model based
  on his research of organizations.
• It describes organizations on a continuum
• Bureaucratic organizations (ineffective) at one
  end.
• Participative (effective) at the other.

23
The Four Management Systems

• System 1 - Exploitive/Authoritative (autocratic,
  top-down).
• System 2 - Exploitive/Authoritative
  (top-down/less coercive-autocratic).
• System 3 Consultative.
• System 4 Participative.

24
Implications to OD

• System 1 organizations tend to be least
  effective, system 4 tend to be most effective.
• OD practitioner tries to move from system 1
  organization to system 4 organization.

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Figure 14.1Profile of Organization
Characteristics
26
Common Elements in System 4 Organizations

• Action rather than further analysis.
• Decisions involving subordinates, not superiors.
• Individual accountability, not rigid policies.
• Specific recognition of team and individual
  accomplishments, not blanket expressions of
  thanks.

27
High-Performing Systems (HPS)

• HPS calls for removal of excessive layers of
  organization.
• HPS creates climate of participation and
  communication across functional barriers.
• HPS is term originated by Peter Vaill.

28
Eight Criteria Used to Examine HPS(part 1 of 2)

1. Perform excellently against external standard.
2. Perform excellently against potential.
3. Perform excellently to some earlier point.
4. Perform with significantly fewer resources than
   assumed are needed.

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Eight Criteria Used to Examine HPS(part 2 of 2)

1. Doing substantially better than other systems.
2. Perceived as source of ideas for others.
3. Perceived to fulfill high level for culture
   within which it exists.
4. Only organization that is able to do what it does.

30
Characteristics of HPS (part 1 of 2)

• An HPS knows why it exists.
• Commitment to purposes always high.
• Teamwork focused on task.
• Leadership is strong and clear.

31
Characteristics of HPS (part 2 of 2)

• An HPS is fertile source of new methods.
• Strong consciousness that we are different.
• Other subsystems often see HPS as problem because
  HPS produces its own standards.
• HPS is cohesive unit.

32
Grid OD Program

• Grid OD is systematic approach to achieve
  corporate excellence by changing basic culture of
  system.
• Starts with focus on managerial styles.
• Moves through phases involving the work team and
  culture of organization.

33
Six Grid Phases (part 1 of 3)

• Phase 1 Grid seminars. Someone in management
  position attends seminar.
• Phase 2 Teamwork development. Begins with top
  manager and continues through entire organization.

34
Six Grid Phases (part 2 of 3)

• Phase 3 Intergroup development. Sessions
  attended by key members of 2 segments where
  barriers exist.
• Phase 4 Development of ideal strategic model.
  Provides skills to move to systematic development.

35
Six Grid Phases (part 3 of 3)

• Phase 5 Implement ideal strategic model.
  Organization divided into planning teams and
  model is implemented.
• Phase 6 Systematic examination of progress
  toward change goals.

36
Third Wave Organization

• Term originated by business futurist Alvin
  Toffler.
• Describes organizations that are evolving in
  information age to meet changing times.

37
Characteristics of Third-Wave Organization

• Flexibility - structure has no permanence.
• Creativity - people motivated by commitment to
  vision or cause.
• Innovation - support for risk taking and
  innovation.

38
OD in Practice Spooks, CIA, and Change (part 1
of 3)

• CIA budgets slashed by Congress.
• Morale plummeted.
• Little or no articulated mission.
• George Tenet (now retired) took over as director
  in 1996.

39
OD in Practice (part 2 of 3)

• Tenets first priority was to rebuild spy shop.
• June 2001 CIA began significant reorganization.
• Transformation included setting up new
  departments whose heads sat in on the executive
  board meetings.

40
OD in Practice (part 3 of 3)

• Communication flows were radically changed.
• For some organizations a crisis can be only way
  significant change can occur.
• Tenet said it would take 5 years to produce
  clandestine service U.S. needs.

41
Key Words and Concepts

• Grid OD - defines problem areas for OD by going
  through phases designed to pursue systematic
  change.
• Grid phases - six phases that a typical Grid OD
  program goes through.

42

• High-performing system (HPS) - removal of
  excessive layers of structure within the
  organization. Encourages participation across
  barriers.
• Learning organization - continuing capacity to
  adapt and change.

43

• Ideal strategic model - Phase 4 of Grid OD
  program. Model developed to achieve excellence.
• Reengineering - radical redesigning of processes
  to achieve drastic improvements in performance.

44

• Survey research and feedback - collect data and
  give feedback to allow organizations to diagnose
  problems.
• System 4 management - a continuum from system 1
  to system 4, with 4 being ideal that
  organizations attempt to achieve.

45

• System-level organization - a structural design
  framework for viewing organization.
• Third-wave organization - firms that use
  flexibility, creativity, and innovation to be
  successful in information age.

46
Preparations for Next Chapter

• Read Chapter 15.
• Complete Step 1 of OD Skills Simulation 15.1.
• Read and analyze Case The Space Electronics
  Corporation.