An OD practitioner is a person in an organization responsible for changing existing patterns to obtain more effective organizational performance. People using organization development have come to realize that conventional training techniques are no longer sufficient for achieving the types of behavioral changes needed to create adaptive organizations. Going to a company's management class and listening to someone lecture about the need to change or the importance of effective organizations may be a good beginning, but speeches will not produce exceptional organizational performance. New techniques have been developed to provide organization members with the competence and motivation to alter ineffective patterns of behavior.
There are many OD techniques, and any individual using OD may rely on one or a combination of approaches. Regardless of the method selected, the objectives are to work from an overall organization perspective, thus increasing the ability of the "whole" to respond to a changing environment.
Organizations have objectives, such as making profits, surviving, and growing; but individual members also have desires to achieve, unsatisfied needs to fulfill, and career goals to accomplish within the organization. OD, then, is a process for change that can benefit both the organization and the individual. In today's business environment, managers must continuously monitor change and adapt their systems to survive by staying competitive in a turbulent arena.
Why Organization Development?
Why has such a fast-growing field emerged? Organizations are designed to accomplish some purpose or function and to continue doing so for as long as possible. Because of this, they are not necessarily intended to change. But change can affect all types of organizations, from giants like IBM, GE. and Google to the smallest business. The year 2008 can lay claim to some of the greatest failures or near-failures of corporations blindsided by fast-developing economic and market conditions. The lists include some of the titans of American capitalism: American International Group (AIG), General Motors, Chrysler, and Lehman Brothers. No organization or person can escape change, and change is everyone's job. Managers at all levels must be skilled in organization change and renewal techniques.
Typical factors for an organization to initiate a large-scale change program include a very high level of competition, concern for survivability, and declining performance. Goals for change include changing the corporate culture, becoming more adaptive, and increasing competitiveness. In today's business environment, managers must continuously monitor change and adapt their systems to survive by staying competitive in a turbulent arena. Kodak, for example, is trying to change by focusing on consumers who use digital cameras instead of film cameras. "If they don't invest in digital, that's the end of Kodak," according to Frank Romano, professor of digital printing at the Rochester Institute of Technology.5 hi the coming decades, changes in the external environment will occur so rapidly that organizations will need OD techniques just to keep pace with the accelerating rate of innovation.
The Emergence of OD
Organization development is one of the primary means of creating more adaptive organizations. Warren Bennis, a leading OD pioneer, has identified three factors as underlying the emergence of OD.
1. The need for new organizational forms. Organizations tend to adopt forms appropriate to a particular time; the current rate of change requires more adaptive forms.
2. The focus on cultural change. Every organization forms its own culture—a distinctive system of beliefs and values; the only real way to change is to alter the organizational culture.
3. The increase in social awareness. Because of the changing social climate, tomorrow's employee will no longer accept an autocratic style of management; therefore, greater social awareness is required in the organization.6
THE ONLY CONSTANT IS CHANGE
Although many organizations have been able to keep pace with the changes in information technology, fewer firms have been able to adapt to changing social and cultural conditions. In a dynamic environment, change is unavoidable. The pace of change has become so rapid that it is difficult to adjust to or compensate for one change before another is necessary. Change is, in essence, a moving target. The technological, social, and economic environment is rapidly chang¬ing, and an organization will be able to survive only if it can effectively anticipate and respond to these changing demands. The first decade of the twenty-first century has seen change in political, not-for-profit, and business institutions that were hardly imaginable in the last decade of the pre¬vious century. As we move into the second decade, there will, undoubtedly, be additional changes that will provide both challenges and opportunities for corporations to compete effectively.
Given this increasingly complex environment, it becomes even more critical for manage¬ment to identify and respond to forces of social and technical change. In attempting to manage today's organizations, many executives find that their past failures to give enough attention to the changing environment are now creating problems for them. In contrast, 3M Corporation has de¬veloped an outstanding reputation for innovation. 3M is big but acts small. 3M's 15 percent rule allows its people to spend up to 15 percent of the work week on anything as long as it is product related. The most famous example to come out of this is the Post-it note. General Electric (GE), another company that cultivates a climate for change, has a Leadership Center, a tool that GE uses to spread change throughout the company. For more information about GE's Leadership Center, see OI) Application: GE's Epicenter of Change.
OD Application: GE's Epicenter of Change7
General Electric Company is well known the world over for its light bulbs, jet engines, refrigerators, locomotive engines, NBC, wind turbines, and toasters. But one of its most successful and important accomplishments is their "university" that it operates the world over. It is headquartered at the John F. Welch Leader¬ship Center at Crotonville, located in Ossining, N.Y. Here, GE turns out the internal leaders it needs, which was the center's initial mission when it was founded over 50 years ago.
Through the years and particularly during the tenure of CEO Jack Welch, now retired, the center evolved to become much more than a training center for future GE managers. The center is now the tool to spread change throughout GE. The company's Web site says the center" has been at the forefront of real-world application for cutting-edge thinking in organizational develop¬ment, leadership, innovation and change." With the current CEO, Jeff Immelt, the center is branching out by inviting its customers to join with GE employees to discuss and solve big issues.
GE invests about $1 billion world-wide every year on train¬ing and education for its people. This has been the case even in the recessionary years of 2008 and 2009. "We have always be¬lieved that building strong leaders is a strategic imperative," says CEO Immelt. "When times are easy, leadership can be taken for granted. When the world is turbulent, you appreciate great peo¬ple." An indication of Immelt's personal commitment to leader¬ship and learning is that he spends approximately 30 percent of his time on leadership development.
The Leadership Center at Crotonville is the epicenter for GE learning, but the students are not just top executives. It hosts around 10,000 employees and customers ranging from entry-level to the highest-performing executives. For many, it is a defining career event The courses, typically running one to three weeks, cover a broad range of topics including.
• Essential skills courses such as hiring, team building, and presentations.
• Leadership courses for new managers.
• Executive courses in leadership, innovation, strategy, and manager development.
• Customer programs including change management and integration.
The classes have a broad functional and global mix with courses typically having 50 percent non-U.S. participation. With GE hav¬ing such a large worldwide presence, there are now leadership courses that are taught in places that include Shanghai, Munich, India, Africa, and, Dubai.
A recent program at the Leadership Center was Leader¬ship, Innovation, and Growth (LIG). The program brought to¬gether all the senior managers of a business unit for four days with the expressed purpose of expanding GE's businesses and creating new opportunities. GE calls this "filling in the white spaces." Attending each session were several teams from around the world. This was a new approach at the Leadership Center as it brought in existing teams at one time to work on a specific issue. In addition to intensive work sessions, there were external speakers who frequently came from a university and internal speakers who were GE managers and had applied the concepts that the teams were learning, On the last day, all the teams at the session delivered a 20-minute presentation to CEO Immelt that covered what the team members had decided they should do to optimize growth. Once back at their home office, they had to refine their presentation into a letter to Im¬melt that was no longer than two pages. From 2006 to 2008, 2,500 people and their 260 teams went through the program with a follow-up in 2009.
GE discovered over 50 years ago when the CEO at that time, Ralph Cordiner, established the Leadership Center that their success depended upon having well-trained and developed leaders. Though GE has experienced some critical challenges during recent recessionary times, their success for the future will in part depend upon how well their employees learned their les¬sons at the Leadership Center.
FIGURE 1.2 The Ch