Organisation Development and Change

A public-sector bank branch is told that from next month every transaction will run on a new core-banking system. Some staff are keen, some are afraid, and customers still arrive on Monday. How a change is classified, caused and handled decides how smoothly it goes.

Planned change is deliberate: managers see a need, design a response and manage it. The move to new banking software is planned. Unplanned change is forced by events nobody scheduled, such as a flood that closes the branch and sends staff to a temporary office. Planned change is proactive; unplanned change is reactive.

Change is sorted into four types by what it alters.

Changes rarely arrive alone. The new software is technological, but it also moves tasks between desks (structural) and asks clerks to work differently (people-oriented).

Forces for change come from inside or outside the organisation.

Resistance to change is opposition to a change, open or quiet. It shows up as arguing, delay, absence, or workarounds such as keeping a paper register beside the new system.

• Individual sources: habit; fear of the unknown; fear of losing pay, status or the value of one's skills; hearing only what fits existing views.
• Organisational sources: rules built to keep things stable; group norms; a threat to the power or expertise of some people; changing one part while the rest stays as before.

John Kotter and Leonard Schlesinger (1979) listed six ways to deal with it. Each suits a different situation.

Don't confuse the type of change with its cause. The type says what changes: structure, technology, people or strategy. The force says why: competition, a new leader, a new rule. One force, such as a rival's app, can drive changes of all four types.

Where it breaks. The four types are a sorting aid. Real changes cross the lines, and the line between structural and technological is often blurred. Resistance is not always a fault: staff who say the new screen is slower for a common task may be right. Listen before deciding the objection is only fear.

In practice. Ask who gains and who loses before launching. Staff who lose status or skills resist hardest, and the answer shows which approach fits. The last two approaches buy compliance, not commitment, so keep them for real emergencies. Strategic HRM notes that people-focused change meets less resistance; the approaches above show how.

For exams. Know the four types with an example each, the internal and external forces, the sources of resistance, and the six approaches. Older questions also ask for the order of steps in a change effort; the next concept gives it.

Go deeper for practitioners

Leavitt's diamond (1965) treats an organisation as four linked variables: task, structure, technology and people. Change one and the others must adjust. That is why a software-only project so often stalls: the task has changed, but roles, skills and habits have not.

A decision. The branch head has two months. Education, with a clear explanation of why, is cheap but slow. Facilitation, with training and a help desk, costs money and time. Which gap is bigger in her branch: not knowing why, or not knowing how?

What changes: structure, technology, people, strategy. How to win people over: tell, involve, support, bargain, steer, force.

A college merges its commerce and management departments. A circular announces one head and one timetable. Within a month the staff form two rival camps and each blames the other for clashes. OD starts from the idea that orders alone do not fix this: first find out what is really wrong, with the people concerned.

OD works on people, processes, structure and culture together. It has a human side (culture, behaviour, communication) and a technical side (structure, goals, processes). Work that treats only one side usually fails. In the college, a new timetable is technical; the rivalry between the camps is human.

Objectives. Continuous improvement (including less waste). Employee engagement (participation, upskilling, satisfaction and retention). Organisational learning (shared knowledge and learning from mistakes). Systemic change (policies, hierarchies and team dynamics together).

Characteristics. OD is planned: intentional, research-based, often led by an OD consultant (a change agent, inside or outside). It is collaborative: top management supports it and staff take part, in trust and openness. It is data-driven: surveys, interviews and metrics guide decisions. It uses feedback and reinforcement: change, reinforce, review, adjust.

The OD process has five steps. The right-hand column shows the merged college as an illustration.

Order of an organisational change effort. Exams ask for this sequence: information gathering, diagnosis, feedback and discussion with the people concerned, planning (a work proposal), implementation, evaluation. Information gathering comes before diagnosis, since facts must exist before anyone can diagnose. Textbooks differ on whether discussion comes before or after the written work proposal, so do not rely on those two alone.

Action research is the classic form of this cycle. Kurt Lewin coined the term in the 1940s: research whose findings go straight into action, and whose results are then studied in turn.

Don't confuse OD with organisational change. Change is any modification, planned or not. OD is one planned, research-based way of managing change, aimed at the organisation's health. Also, books give the OD cycle as four, five or seven steps. Some split planning into design and development; some use diagnosis, action planning, intervention, evaluation. These are the same cycle in more or less detail.

Where it breaks. Real work is not so tidy. Steps overlap, and diagnosis continues during action. OD needs committed top management and takes a long time. Its gains are hard to measure, since many things change at once. Its stress on openness and participation may sit uneasily in a strongly hierarchical culture.

In practice. Diagnose before choosing a remedy. A common failure is to run a favourite training day first and discover afterwards that the problem was structure or trust.

For exams. Know the dual approach, four objectives, four characteristics, the five steps and the seven steps of action research.

Go deeper for practitioners

The McKinsey 7-S framework is a diagnostic checklist, not a sequence. Shared values sit at the centre. Three hard elements surround them: strategy, structure and systems. Three soft elements complete it: style (how top managers lead), skills and staff. Its lesson is that changing one S alone seldom holds. A new structure for the college (hard) will not last if the old rivalry in style and staff (soft) is untouched.

Culture and climate, which diagnosis examines, are covered in the chapter on organisational culture and climate.

A decision. A diagnosis shows both camps agree on strategy but distrust each other's style. Which comes first: redesigning the structure again, or a team-level intervention?

Diagnose, plan, implement, evaluate, reinforce. Information first, action later.

Diagnosis at the merged college shows two things. The two groups of lecturers hardly talk, and admission papers pass through six desks. One problem concerns people, the other a process, and they need different remedies.

Interventions are grouped by the level they work on.

The main interventions, with an illustration for each:

BPR runs in five stages: map the current process, analyse it, find the improvement opportunities, design the future process map, and implement it with training and support.

OD uses a few tools. A tool gathers data, spreads skills or reinforces behaviour; interventions are built from them.

Older exam questions also list other techniques as OD interventions.

• Managerial grid (Blake and Mouton): concern for production against concern for people; covered under leadership.
• Management by objectives (Peter Drucker, 1954): managers and staff agree objectives and review results against them.
• Brainstorming: free generation of ideas in a group, usually with criticism held back until later.
• Quality circles: small voluntary groups of workers from one area who meet regularly to solve work problems; begun in Japan in the 1960s.
• Transactional analysis: covered in the chapter on interpersonal behaviour.

Don't confuse sensitivity training with team building. Sensitivity training works on individuals' self-awareness in an open-ended group. Team building works on a real work team's task, roles and trust. Also, process consultation is not expert consulting: the consultant does not supply the answer but helps the group find its own.

Where it breaks. An intervention aimed at the wrong level wastes money: a retreat cannot fix a six-desk process. One-off events fade unless reinforced. A survey whose results are never shared teaches staff that their answers do not matter. Sensitivity training can be stressful, and what is learned may not carry back to the job. BPR has been criticised for serving as cover for cutting jobs.

In practice. Choose by the diagnosis, then by level, cost and readiness. Pilot first, and combine: survey feedback to find the problem, team building to work on it.

For exams. Match the intervention to its level and to its author: Schein for process consultation, Hammer and Champy for BPR. Expect a case where you pick the best fit.

Go deeper for practitioners

Chris Argyris and Donald Schön separated single-loop learning, which corrects an error within the current rules, from double-loop learning, which questions the rules and goals themselves. A review that only asks how to avoid late papers next year is single-loop. One that asks whether six desks should exist is double-loop. Peter Senge (1990) used the idea of a learning organisation for firms that do this routinely.

The T-group grew out of a training workshop that Lewin and his colleagues ran in 1946, a link back to the founder of the next concept.

A decision. A survey shows mistrust between two groups, and a redesign would also cut a post. Team building is cheap and quick. Redesign is lasting but threatens people. Which would you start with, and what would you tell the staff?

Level first: individual, team, organisation, process. Then pick the tool.

A bank branch has run on ledgers for twenty years. The new software goes live on Monday. A month later half the clerks still keep a paper register on the side. Installing a change does not make people adopt it, and Lewin's model shows why.

Lewin's leadership styles and his formula B = f(P, E) appear in other chapters. The change model is a separate part of his work.

Lewin's model and the OD process run side by side, but they describe different things. The model describes what happens to people's habits. The OD process describes the consultant's work. Roughly, diagnosis and feedback help to unfreeze, implementation is the change, and reinforcement is refreezing.

Benefits and challenges of OD

Don't confuse refreezing with freezing for ever. It means making the new way the normal way. The next change will need unfreezing again.

Where it breaks. Critics say the model is too simple and too linear. It pictures a stable organisation, disturbed once and then stable again; many organisations now change continuously, so there may be no steady state to refreeze into. It also says little about power, politics and culture, and it suits change led from the top. Some scholars argue that the three steps are a later simplification of Lewin's richer work on group dynamics, action research and force fields.

In practice. Spend the most effort on unfreezing. Many change programmes stumble because managers jump straight to training for people who do not yet see why. Plan the refreezing too: if appraisal and rewards still favour the old way, the old way returns.

For exams. Know the order and the standard examples: unfreezing, communicating poor performance data; changing, training in new software; refreezing, new KPIs and rewards aligned with the changed goals. Memory aid: prepare, implement, stabilise.

Go deeper for practitioners

Lewin's force-field analysis pictures any present level as a balance between driving forces that push for change and restraining forces that push against it. Change happens when the balance tips.

Unfreezing means tipping the balance, by adding driving forces, removing restraining ones, or both. The advice to remove restraints first is the more useful half of the analysis.

A decision. The branch head has a head-office target to push. Clerks say they fear errors and have no time to practise. Does she add a stricter deadline, or free two afternoons a week for practice? Which force is she changing?

Unfreeze, change, refreeze: prepare, implement, stabilise.