December 16th 2019

CRFCast – Organisation Development – Does the World Need OD? with Chris Worley

In conversation with Professor Chris Worley, expert in organisation design and development, we discuss CRF’s Organisation Development Manifesto. Our conversation covers why OD is an essential capability for organisations to develop, the current state of the OD field, how OD practitioners can up their game in helping improving the effectiveness of their organisations, and how we can build greater agility into organisation design.

Episode Transcript

Gillian Pillans [00:00:03] You're listening to the CRF cast where we explore research we've been working on here at the Corporate Research Forum, and we discuss the latest thinking in strategic H.R. topics with academics, practitioners and leading experts in the field. I'm Gillian Pillan's, research director at CRF. You can explore the full podcast archive, unsubscribe for updates by searching CRF cast on iTunes or Spotify. You can also find more about CRF and access all our podcasts and other research materials at www.crforum.co.uk.

My guest on today, CRF Cast, is Chris Worley, whose research professor of management at Pepperdine Graziano did business school, senior research scientist at the Centre for Effective Organizations and also author and Organisation Development and Change the Bible for OD Professionals.

We're talking about the current state of the field of organisation development. The recommendations of CRF's Organisation Development Manifesto. And we'll also discuss Chris's work on developing agile organisations.

Chris, thank you very much for joining us today on the CRF cast. It's great to have you.

Chris Worley [00:01:22] Gillian, it's always a pleasure to chat with you and love the stuff that you guys are doing at CRF.

Gillian Pillans [00:01:28] Are the topic of today's podcast is OD and that in itself is a bit of a challenge because what does it actually mean? And then I know from conversations I have, there's a lot of confusion around. First of all, what is terms actually stand for? And then what does OD actually mean? So can you give us a bit of clarity around that?

Chris Worley [00:01:47] I'll try. I think you're right. People are using the term OD now a lot. And when you go into organisations, I think one of the first things I have to do is ask them, do you mean organisation development or organisation design? I think there's a couple of definitions floating around about organisation development. They're all mostly the same. And what they have in common is you're going through a process that involves a diagnosis, right. That you're trying to understand what works and what doesn't work in the organisation. You're trying to produce change in some way. Right. So we want to know that something in the organisation shifted from one way of doing something to another. We want to know that there's learning involved. I think one of the things organisation development has done a good job is is to emphasise the transfer of knowledge to a client, to a team, to an organisation so that they're better able to handle changes in the future. And then, of course, we're trying to improve effectiveness. So if you think about the difference between organisation development, organisation design, organisation development tends to be a process. We're looking at the process of change and how it happens to make life better in the organisation to improve the performance. Organisation to design, on the other hand, is a bit more content related. We're trying to think about what are the right things in the organisation to change. Is it a structural issue? Is it the way the teams are working?

Is that how we're empowering our employees, the way we're developing strategy? So we look at organisation design in terms of the systems and structures and processes that the organisation uses to produce customer value, corporate social responsibility, whatever that particular outcome is.

Gillian Pillans [00:03:37] Okay. So just to be clear in this conversation, we're talking about OD as organisation development. And so hopefully that clarifies some of the confusion around in the terminology. So given that so we've just published our CRF OD manifesto and one of the points that we make in the manifesto is that already as an organisational capability is actually in many ways more essential than ever in the current business context. So from your point of view, what do you think OD offers as a kind of unique answer to some of the organisational challenges that we're facing today?

Chris Worley [00:04:14] First of all, I love, love the nature of the question, does the world need what Organisation Development offers? And I think there is an increasing call for that question and an increasing answer that the answer is yes.

And yet we wonder and I think the OD manifesto that CRF has produced is a really important call to that question, because it says, yes, we do need to have organisation development, the world, but organisation development itself needs to sort of step up and and be the answer to that question.

What's what I think is is happening in organisations today that makes that question so relevant is we have a set of trends and issues, digitalisation, socio political change, globalisation, urbanisation.

There's a bunch of things sort of happening in the world. And those those trends are having kind of two impacts. One is it's changing the way organisations operate and it's changing the way people behave. And to the extent that those are integrated, I think we end up with a good thing. But I think most people are acknowledging that technology and globalisation are but are actually drawing people away from each other. And one of the essences of ideas is, is being more inclusive.

And so I think one of the things that OD really brings is the ability to think about how do we integrate organisations and people together and if that's the answer it provides. I think we're on the right track.

Gillian Pillans [00:05:48] Yeah, I think one of the points we making their manifesto is it's important to take a whole systems perspective. So it's not just debate.

It's the design of the organisation, for example, or the relationships that that people have. It's always a whole number of things together. How that connects with the business strategy. See? It's really critical to take that sort of overall systems point of view and as an entity.

Chris Worley [00:06:10] Totally agree. I mean, if you think about what the one of the essences of OD is, it blends right.

The notion of psychology and wellbeing and health as an individual, it intervenes. Organisation development is a little is it some arrogance there?

Because organisation development embraces the idea that it can understand a system and then intervene in that system. And it takes us a systemic view. It's not just one thing. The different pieces of the organisation, whether it's the people or the reward system or the structures, they all have to be integrated together.

Gillian Pillans [00:06:45] Yeah, exactly. So I think we've dealt with the question of is there a need for OD? I think the answer to that is yes. On the other hand, we hear quite a lot of commentary. You've sort of alluded to this somehow OD perhaps as an organisation keep its here as a function in its own right is perhaps kind of lost its way. I mean, its origins date back multiple decades. Know it needs to be fit for purpose in today's environment. So and that's part of the reason why we published the manifesto in the first place. So how would you assess the current state of of OD and organisations and perhaps where there's an opportunity to step up?

Chris Worley [00:07:23] Yeah, if I had to pick one word right. To sort of characterise where I think the field is today, it would be fragmented. And if I look at what the what the field is doing and the range of interventions, the range of issues that it attempts to solve. It is it's impressive, right. There's a broad range of things all the way from strategic planning to coaching at the individual level. But in that by that same token, that fragmentation can't be uncoordinated. And I think it is. So I think where I've characterised that fragmentation is what we what we tend to call in marketing a category killer. Right.

So it used to be you could go to a particular store and get multiple things from one store and somebody decided, well, it'd be a good idea if we could take that one aisle in the store and make a whole store out of it. And and in doing so, you've got the customer got more detail, got more skews.

Chris Worley [00:08:24] It got more products, it got more variety, it got more price points, which is a good thing for the customer until the customer realises that they have to go to this store and then this store and then this store in order to get everything they want. And I think that's what's happening in OD. Coaching has completely flourished as a as a way of working inside of organisation, but it's fragmented because a coach can't a coach can work with an individual, coach can't work with the system. Change management has become hugely popular in the United States. It's growing leaps and bounds. And yet change management has no diagnostic function. And so the real dilemma exists that you could be really good at change management and implement very well the wrong change.

Gillian Pillans [00:09:12] I'd like to bring us back. To the essential purpose of OD is to support the organisation in addressing its strategic organisational challenge.

Chris Worley [00:09:21] That's what it should be.

Gillian Pillans [00:09:23] Yes. Yes. It's always gonna be the start point. And then, you know, whatever activities are relevant to and designing a system to deliver against those organisational priorities, this is what it's all about. So what needs to happen for us to step up and address this fragmentation?

Chris Worley [00:09:42] It's a great question for me. We do have to go back to purpose. And that's why I was kind of keyed on that initial point that you made. It's gotta go back to purpose. Who are we? What do we believe and why are we here? I think if we can't answer that in a similar way across these different interventions, then we're not all working toward the same thing. If coaching is trying to improve individual behaviour, that's great. But is it going to happen at the expense of organisation effectiveness? So I think there really does need to be some clarity around around the purpose.

And for me, you know, we only need to go backwards in order to go forwards. There is a lot about our past that tells us how we were integrated around. If you want to call it an ideology, if you wanted to call it a set of shared values, you know, I'm I'm pretty agnostic to that.

But what I am concerned about is that we share a purpose and a view. And what I've tried to advance, at least in the last few months, is the notion about we are here, we are here not for ourselves. In other words, we can't be here for you know, I can't be here because I'm a good coach or I'm a good org designer. We have to be here for the good of others, for the good of the organisation. That should be what's common across all of these things. Second, I think the field needs we need to have a clear strategy.

We have traditionally in the organisation and organisation development. I think we have over rotated on looking down. I got this metaphor from J. Conger and he and I were sort of discussing the state of the field and and he coined this metaphor, which I really like, and that is that people most OD people and organisations look down and they say, OK, these people are hurting, they're not engaged. What can I do to equip them and help them? And I think that's effective. But to the extent that we don't look up.

To the strategy in the organisation design and say these people are suffering because the system above them is broken. So I think OD needs to have a much more integrated look up, look down strategy.

And then finally, where I think we need to take some steps and we can be more concrete about this if you want. But I think we need to add some capability.

I think because of the look down strategy, we have tended to over emphasise interpersonal skills and under emphasise the organisation design skills. And I'd like to see these practitioners get a little more. Tom Friedman used the word versatilist. I'm not a specialist. I'm not a generalist. I'm somebody who blends two or three things together that really become very powerful.

Gillian Pillans [00:12:32] So let's just touch a little bit more depth on the issue of capability. And are there certain capabilities that you would like to see more of within the community, certain perhaps must haves that some that form the foundation of expertise in this field.

Chris Worley [00:12:51] So for me, if the single biggest gap that I see today that I think we need to fill in that is it would be org design. We talked before at the beginning of the show about the difference between the two. But certainly the perspective we're taking at at the Centre for Effective Organizations is that change and design need to be this made to be seen as the same thing. And most organisation development people I think have a weak muscle in order design and need to build that muscle. So that's that's what I would say today. I think that's the single biggest thing we can do to be more relevant and to make a bigger contribution to effectiveness. Longer term, I think we need to add the ability to understand networks and ecosystems. It's no longer OK to optimise or maximise the organisation's objective functions around profitability or growth.

We now have to add corporate social responsibility, community responsibility, ecological responsibility. And as soon as you start to run into those problems, you realise that you're not alone. And the organisation has to start thinking about how does it interact with its suppliers, with its community, with its customers, with its competitors, with its regulatory system.

And so how do we start conceiving about that ecosystem and designing that for, again, a greater good, which I think should be the purpose of the field.

Gillian Pillans [00:14:29] Coming up in the second half of the series forecast cast, we'll discuss Chris's work on organisation agility, what it is and the steps we can take to build greater agility in our organisations.

If you're enjoying the series cast, please subscribe to our channel, by searching for the Corporate Research Forum on iTunes or Spotify, you can sign up to get the latest editions automatically and to share with your colleagues and leave us a review.

Okay. So I'd like to switch tack a bit. No. You've researched and written a lot about agile organisations and agility is a hot topic in the world of organisations today. Again, we have a challenge around definitions when we talk about agility. So maybe we can start by talking about what our agile organisations. What are the differentiating characteristics from your point of view?

Chris Worley [00:15:30] It's a it's a subject that, you know, I love to talk about.

I think when you and I wrote the monograph for CRF several years ago, you know, it was an emerging idea. I'm not sure if you did, but I certainly wasn't sure it was going to last as long as it had. But it certainly lasted. And therefore, it must have something there must be something there that people are attracted to. The way the way I talk about organisation agility as we're not talking about agile methodology. And the more the more micro oriented issues of agile teams and that sort of thing. You know, the things that you and I talked about in that monograph were the you know, the capabilities that an organisation has to be nimble, flexible, adaptable. And where we have landed as a definition and it seems to be holding up over time is an agile organisation is able to make timely, effective and sustained change where in the organisation. It makes a performance difference or an effectiveness difference.

I think the where parties become more important to me, at least over the last few years is, you know, on the one hand, you can think about the whole organisation being agile. And that may be a true statement. We need to talk about that. But I also think it's important, especially in mature industries and in larger organisations. Think about where in the organisation. Agility makes sense. Is it in your supply chain? Is it in manufacturing? Is it in your talent management? Where in the organisation is agility, that ability to make timely, effective and sustained change, you know, change when you need to. Choosing the right change. I think that becomes kind of a critical issue. And as we've gotten better at understanding agility, a notion of where in the organisation it makes a difference is important.

Gillian Pillans [00:17:28] And again, that connects back to the strategy of the business and where you need to have a unique competitive advantage relative to your peers in your industry or you and emerging competitors in other industries. It is making choices around where to be agile and where to accept that there's a there's a basic level of capability that's good enough.

Chris Worley [00:17:51] Yeah, exactly. No, I think that's I think you're right with this with the strategic notion, if you're in a mature if you're a large organisation, because most of the work that we've done has been around these large organisations.

Competition is multifaceted. Right. And figuring out where you are different and why you're different in that area and why it's it's conferring a competitive advantage means that the senior leaders of the organisation have taken the time to really suss that out and and get clear about where are we different and where is that difference valuable to customers and how do we protect and defend that for any particular moment of time. That's important and relevant to the organisation.

Gillian Pillans [00:18:35] Yeah. Okay. So when we were preparing for this conversation, we we talked about there being software and hardware elements to see. That's the way that I quite like to describe it. I guess the software would be things like culture and hardware, perhaps be more things like organisation design. And this I said, can you paint to a more detailed picture in this? I mean, what would agile organisations look like in practice in terms of how they feel to work then and also how they operate? So some of the harder elements as well.

Chris Worley [00:19:06] Yeah, that hardware software can be really can be really helpful inside of organisations to help them sort of get a sense of of what has to happen. What I think is happening on the software side is we are moving away from culture as the central issue. Certainly Microsoft is getting a lot of a lot of play in the media for its culture change effort, its change in mindsets. And Satya has done a really cool job, I think, in that organisation of shifting the mindsets. But what we see in the agile organisations is it's not a focus on culture, it's a focus on identity. And that identity piece. The reason it extends from culture, because it goes outside to the relationship between the organisation and its customer base and even multiple stakeholders for that matter.

So it's not just the how we talk about ourselves to each other in terms of an internal conversation. Who are we and what do we believe and what are our values? What stories that we tell about ourselves when we're talking to ourselves? But there's a there's an external conversation that takes place. It's how the organisation what the organisation says to its customers. This is who we are. This is the product or service that we offer. These are the benefits of using our product or service. And then it gets a little tricky because they are the customer then gets to have an experience with that service and or experience with their product and gets to make some assessments about whether or not, you know, you spoke truth. You write about who we are and what we believe in, what our products will do for you.

The soft part here is the connection is the internal conversation inside the organisation the same as the external experience that people have. So as a professor, if I'm standing up in front of a class and my university has said, this is who we are. This is the kind of experience you have. And I'm supposed to deliver on that experience. But I know internally I'm not rewarded for necessarily being a great teacher. I'm rewarded for being a good researcher. Now I have some conflict. So am I going to give and deliver this experience to the students or should I be getting out of the classroom and getting into my office and doing the research?

Now, you've got a little tension, and I think that's the soft issues that leaders have to come to terms with is do you understand what your identity is?

Do you understand whether there's similarities and differences between that internal and external conversation? And that takes a lot of reflection. It takes a little time. It takes a little patience to sort of discover that that identity and begin to understand, you know, who you are.

And so what inspires the organisation? The reason we've spent some time on that software issue is if you're going to propose a change in the organisation and you propose a change that is sort of against the culture.

Now you've got some tension. People start to talk in terms of resistance, whereas if you propose a change that is in concert with your identity now, your implementation becomes quite easy because all those forces about who we are pushed the organisation forward, I think is a really classic story at 3M about when they adopted a new CEO. I believe he came from G.E. and was quite enamoured with Six Sigma and Lean In those kinds of issues and tried to impose a process of Lean In Six Sigma, an organisation that was known for innovation, whose identity was wrapped around innovation.

Well, what happened? Innovation went down, performance went down.

And when they replaced the CEO who was external with an internal CEO who understood the identity, reinstate, reinstated the innovation thing and performance and innovation went back up. You know that on the hard side. On the hard side, we're back to organisation design. And I'll pick up on a phrase that you used a little earlier. We have to start thinking about the systems and the structures in the organisation and the extent to which they are fit for purpose.

That's the first, right? That's the first hurdle you got.

A cross is does the organisation have reward systems or resource allocation systems that align to the strategy, support the strategy, encourage the right kinds of behaviours that the strategy goes? I think what agile organisations have to worry about are two things that you and I first discovered in our monograph, and that is that not only do they have to be fit for purpose, they have to be flexible. So resource allocation, I think you and I talked with Unilever at the time and they had a beautiful example of their ability if necessary. And I think that's an important issue when necessary. They were able to adjust their budgets in different emerging markets as necessary as as often as in a month. So it has to be flexible. And then the sort of the cycle time of that particular system, structure or process has to be fast enough to to be able to change the organisation in a rhythm, in a cadence that allows it to match the needs and the demands of the changes in the environment.

Gillian Pillans [00:24:35] And one of the things that's really struck that stuck with me from the work we did together was this idea of sensitivity to the needs of customers, and that needs to be designed into the organisation as well, and we talked about having a maximum surface area with the outside world.

And to me, that's something that sort of plays to if you're going to be fast enough to be able to respond and you need to not just have the internal capability to respond quickly, but you need to be able to pick up on signals as early as possible and do something about these signals to get them back to decision makers. And that's about having the right touch points with the external world.

Chris Worley [00:25:14] And it's just it's clearly a structural issue. And I'll give kudos to my co-author on that one, Ed Lawler, who came up with that term. I thought it was a brilliant term, but it ends up being a very structural issue. People talk about spans and layers. They talk about being more flat. And, you know, I I avoid trying to do or design by numbers, but I think there's a principle there. And the principle is that any particular organisation has multiple stakeholders and have you design the structure of the organisation in such a way that the organisation is in touch with each of those different stakeholders in important ways, the customer being critical.

And here's where I think agile organisations play a dangerous game. On the one hand, we're told, get close to the customer, understand the needs of the customer. On the other hand, Clayton Christiansen warns us that if we get too close to the customer, we may miss signals in the environment for change, that of a new technology or a new competitive product.

And so I think we have to be close to the customer structurally. We also have to be paying attention to the trends and the things that are happening in the environment that might signal disruption and being close to that.

So that the maximum surface area metaphor really works in multiple ways.

Gillian Pillans [00:26:37] Yeah, absolutely. So let's just finish off on a practical level. So if we go back to the start of this conversation, we were talking about OD, organisation development and the current state of the function.

 

[00:26:51] And if we can tie together the two parts of the conversations you're talking about organisation, agility and OD what sort of practical recommendations might you make to these professionals about how they can help build agility within their organisations?

Chris Worley [00:27:07] You know, if I'm an HR OD practitioner today and I'm trying to be more relevant, I would first suggest doing something they're probably already good at. And that is reflecting on their current set of skills and knowledge. And in the sense of this being versatilist idea, what I would do is say, OK, where can I work? And I build new skills and knowledge, new competencies that are going to complement that. So if I'm really good at coaching or I'm good at team effectiveness, I'm good at interpersonal relationship kinds of issues, then I would say the opposite. Right. Where I would go to the place that's most opposite. I would go to places like strategic thinking, building a little more capability around the business itself and understanding the business issues so that I can speak quickly to leaders about the challenges that they're facing.

For sure, I would go and extend myself into, if not all of organisation design, certainly parts of organisation design as a as a coach or a team effectiveness person, I might go to reward systems and understand how is it that the organisation is set up to encourage certain kinds of behaviours and not others? And can I plug my teams into that idea? So they understand some of the things they want to do and some of the things they might be able to do by moving themselves up into that system and say, how do I set goals? How do I set rewards that are appropriate for the team?

I'd also move into other broader notions of of design in terms of structure. I think it's interesting if you look at the way agile methodology and agile teams is going, they're going the same way that self manage teams and socio technical systems is going. They're starting to ask questions about these agile teams are up and running, but they're constrained to their performance is the organisation's design. So they're moving into business systems and and things. That's where that's where I would talk to an OD practitioner and say where he's strong now, where do you need to sort of extend yourself to become more relevant, more versatile?

Gillian Pillans [00:29:22] In the manifesto, we provide some thinking in some frameworks around that. We talked about it with diagnosis at the organisational level. I guess what we also talking about is individual diagnosis, says a new OD practitioner. Perhaps the place to start is by diagnosing your current strengths and where you perhaps have some work to do here.

So just to draw people back to the OD manifesto, there are some ideas in there that some people can use to measure them themselves currently and in terms of where they're looking to to get to.

Chris Worley [00:29:52] One of the things that I think Jeff did, the author of the manifesto that he did really well is he highlighted the importance of understanding power. I think that has been a weakness over time of OD. One several researchers years ago sort of said, OD hides behind its values instead of addressing power. And I think the manifesto does a really good job of saying organisation development needs to understand power and as appropriate, speak truth to power. A lot of times when I work with executives, they're actually missing that they have been surrounded by people who know how to play the game. And so they're missing a lot of information that they would like to have so they can make good decisions. I think that's a role we can play and sort of learning how to screw up our courage to speak truth to power about what's happening in organisations was something that was highlighted in the manifesto. And I really think that was a very real strong point of the work.

Gillian Pillans [00:30:59] Let's take a moment to summarise the key messages of my conversation with Chris.

First, trends such as digitalisation, social change and globalisation mean the practice of OD is in many ways more essential than ever. And today's organisations are already professionals. Equipped with the right skills and mindsets have an opportunity to step up to the plate and really impacts on the effectiveness of their organisations. Second, OD needs to take a systems view of all the factors that need to combine to shift organisation performance and culture. This has to start with diagnosis of the current state and a deep understanding of the desired strategic direction of the organisation, combined with engagement with the power relationships across the organisation that either support or hinder change. Body professionals also need to bolster their traditional skills in areas such as coaching and change management with a deeper understanding of organisation design. Finally, building organisation agility has become a key priority for organisations, enabling them to make timely, effective and sustained change where it is needed. Already, professionals need to attend to both the hardware and software elements that underpin agility.

Software being the culture and identity, both internal and external identity of the organisation and its people.

Hardware being the organisation's systems and structures that define how work gets done and how people relate to each other in the organisation. For further information, you can access the Sheriffs Organisation Development Manifesto and the research report.

Chris and I wrote on Organisation Agility on the CRF website at www.crforum.co.uk.

You've been listening to the series cast with me, Gillian Pillans, research director at CRF. You can find out more on our website at www.crforum.co.uk. Follow us on Twitter @C_R_Forum or join the CRF group on LinkedIn. Bye for now and thanks for listening.

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