ORGANISATIONAL

DEVELOPMENT AND
CHANGE KNOWLEDGE
EXCHANGE GROUP

June 2009
 IMPACT OF GLOBAL
LEADERSHIP PERSPECTIVE
ON THE SOUTH AFRICAN
REALITY
AGENDA
INTRODUCTION
CONTEXT OF CURRENT GLOBAL SITUATION -
PESTEL
INSIGHTS FROM LEADERS
SOUTH AFRICAN REALITY - PESTEL
HOW SHOULD OD RESPOND TO THIS
INTRODUCTION OF SPEAKERS
Unathi Mdlungu – Phulo Organisational Development
Louise Niemand – Phulo Organisational Development
Beatrice Attrill – Independent OD Consultant
Ruwayne Kock – The Human Resource Practice
INTRODUCTION
Introduction to session
Format of session
Expectations of delegates
CONTEXT OF CURRENT GLOBAL
SITUATION - PESTEL
Political
Economical
Social
Technological
Environmental
Legal
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
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 Company’s Act
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
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
Internal Communities
Disclosure and consultation
Managing of uncertainty
Need for meaningful engagement – align people’s 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
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
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 people’s contribution to strategy attainment
Speed up consultation and execute smartly/ quickly
Focus on what you know and can do best
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
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
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
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 Company’s Act,
King 11 and possible King 111 reports (governance)
WHAT IS OD’s ROLE IN THIS?
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 organisation’s 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).

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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 organisation’s
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)

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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.
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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)

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Exercise
Why care about OD?

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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.

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Exercise
How do you use OD in your organisation?

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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)

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Exercise
How does OD relate to change?

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OD’s relationship to change
Traditionally Organisational Development has dealt
with interventions to improve the organisation’s
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

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OD’s 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)
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Exercise
Why has OD become important for HR?

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 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
5% with the strategic direction and 20%
Strategy business needs of the organisation
Strategy
Develop and deliver
Performance 40%
25% programmes that enhance the
Enhancement organisation’s ability to
Performance
attract, develop and retain
superior performers Enhancement

30% Transactions
Handle employees
transactions and Transactions 20%
enquiries
Administration
40% Administration Manage vendors, suppliers, 20%
budgets, and HR systems

Source: Hay/McBer & Company, presented by Lyle M. Spencer,Jr.,PhD

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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.
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 Generic ODC Framework
Post Modern External

Psycho Active Consultant

Technical Theory Roles

Classical Internal
How

What Who

Where
Mind-set Total System

Transactional Transformational Systemic Process

Content System

Behaviour People

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Action Research OD Approach
The ODC process (value chain) model consists of the
following phases:
Contracting;
Diagnose;
Design;
Build;
Implement; and
Evaluation.

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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.

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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.

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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

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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

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10 principles of appreciative
inquiry
Constructionist
Words creates worlds
principle
Simultaneity principle Inquiry creates change
Poetic principle Choose what we study
Anticipatory principle Images inspire action
Positive principle Positive questions lead to positive change
Wholeness principle Wholeness brings out the best
Enactment principle Acting ‘as if’ is self fulfilling
Free choice Free choice liberates power
Narrative principle As we weave stories, so we create bonds
Awareness unifies, amplifies and magnifies
Awareness principle
the effect of the AI

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 Appreciative Inquire 4-D Cycle
Initiate

DISCOVERY
What gives life
(best of what is)
Appreciating

DESTINY
DREAM
What will be
Define What might be
(how to
Innovate empower, learn Affirmative (imagine what Inquire
Topic choice the world is
and adjust)
calling for)
Sustaining
Envisioning
DESIGN
How it can be
(determine the
ideal)
Co-constructing

Imagine
Cooperrider et al., 2003 AI 4 D Cycle

Mohr / Jacobsgaard Four I Model of AI

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Integrative systemic
perspective on organisations

Source:
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Van Tonder & Roodt (2008)
Technical system Interventions
Sub-system Intervention Types
Technology Sub- Information Technology:
system Change occur at 2 levels:
Level 1 entails the identifying,
informing and equipping of the
system end-user. Four core
change management
workstreams required.
Level 2 entails assessing the
business risk and readiness to
ensure the path is clear for the 4
core workstreams
Business Process Re-
engineering
Policies, practices and
procedures
Task Job design
Sub-system
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Intervention Description
 Role design and mapping
 Training
 Communication
 Performance stimulation
 Manage stakeholders
 Change readiness
assessment
 Business impact
assessments
 Business process redesign
 Standard guidelines to
organisational members
 Role analysis
 Role negotiation
 Responsibility charting
Social system Interventions
Sub- Intervention Types Intervention Description
system
Psycho- Psycho-social process,  Induction and socialisation
social Sub- competencies or skills on  Team building
system individual, group, team or
organisational level  Process consultation
 T-groups

Structural Organisational design  Redesign

Sub-system  Restructuring
 Self directed work teams
 Quality circles
 Downsizing

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Integration Interventions
Sub-system Intervention Types Intervention Description

External Environmental Analysis  SWOT

Interface  Stakeholder analysis
Sub-system
 Realignment of strategy
Goal Performance  Organisational goals (MBO)
Sub-system Management  Performance Appraisal
Strategic Planning  Strategic Analysis
 Strategic Choices
 Strategic Plans
 Strategic Execution
Culture Culture shift  Value clarification
Sub-system  Excellence or Quality award
 Learning organisations

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Using OD to weather the
economic turmoil
In today’s 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

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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

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