week 4 LO 2

see dox

Total 2-part need be done. *****please check the pdf which I provided for reference. **** Thank you

Homework part 1- 1-1.5 page answer

Below each Learning Objective you are to write your explanation, in your words. Your answers may not be quotes from the text or any other source. If so, you must cite them.

CH.10 Interpersonal and Group Process Approaches

1. Understand the diagnostic issues associated with interpersonal relations and group dynamics interventions.

2. Illustrate the principles of the process consultation intervention.

3. Describe the process of third-party conflict resolution.

4. Discuss and evaluate the core organization development (OD) intervention of team building.

CH.11 Organization Process Approaches

1. Understand the diagnostic issues associated with organization-wide process interventions.

2. Demonstrate the organization confrontation meeting.

3. Compare the intergroup relations interventions of microcosm groups and intergroup conflict.

4. Describe and evaluate the effectiveness of large-group interventions

CH.12 Restructuring Organizations

1. Describe the most common organization structures used today and understand their strengths and weaknesses.

2. Present the process of downsizing.

3. Describe and evaluate the reengineering intervention

Homework part 2 (0.5-1-page answer)

Discuss the Value of Types of Human Process Interventions.

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10
Interpersonal and Group Process
Approaches
learning
objectives
Understand the diagnostic issues associated with interpersonal relations
and group dynamics interventions.
Illustrate the principles of the process consultation intervention.
Describe the process of third-party conflict resolution.
Discuss and evaluate the core organization development (OD)
intervention of team building.
T
his chapter discusses change programs
related to interpersonal relations and group
dynamics. They are among the earliest inter-
ventions devised in OD, they remain very popular,
and they have been adapted for use in a variety of
worldwide and cross-cultural settings. Interper-
sonal and group process approaches are aimed
at helping group members assess their interac-
tions and devise more effective ways of working.
These change programs represent a basic skill
requirement for an OD practitioner.
Interpersonal and group process approaches,
including process consultation, third-party inter-
ventions, and team building, are among the most
enduring OD interventions. Process consultation
helps group members understand, diagnose, and
improve their behaviors. Through process consul-
tation, the group should become better able to
use its own resources to identify and solve the
interpersonal problems that often block work-related
problem solving. Third-party interventions focus
directly on dysfunctional interpersonal conflict. This
approach is used only in special circumstances and
only when both parties are willing to engage in the
process of direct confrontation. Team building is
aimed both at helping a team perform its tasks
better and at satisfying individual needs. Through
team-building activities, group goals and norms
become clearer. In addition, team members
become better able to confront difficulties and
problems and to understand the roles of individuals
within the team. Among the specialized team-
building approaches presented are interventions
with ongoing teams and temporary teams such as
project teams and task forces.
As the economy has globalized and as
organizations in other countries have developed,
OD practitioners are applying these fundamental
OD interventions more and more. Like other
social innovations, however, process consultation,
third-party interventions, and team building must be
adapted to fit with local cultural values. Traditional
OD values, rooted in North American and
European cultures, favor openness, directness, and
participation. Other country and organization cultures
may not favor these same values, requiring
adjustments in these interpersonal and group
process interventions. For example, third-party
265

interventions are less likely in Asia given the “saving
face” norms prevalent in that region. Similarly, team-
building processes must account for norms of
uncertainty, avoidance, and deference to authority
during problem-solving activities or interventions
intended to alter group processes.
10-1 Diagnostic Issues in Interpersonal and Group
Process Interventions
Chapter 5 introduced the diagnostic issues associated with OD interventions. With
respect to interpersonal and group process issues, we draw mostly from the concepts
involved in group-level diagnosis. The primary inputs to understanding group effective-
ness are the organization’s design—its strategy, structure, and culture. For example, if the
organization is pursuing an aggressive growth strategy with a functional structure,
moderate-to-high levels of conflict may be quite acceptable. As described in Chapter 12,
the high levels of expertise that are a strength of functional structures also produce a
tendency for conflict. The OD practitioner must diagnose whether the aggressive objec-
tives are exacerbating that tendency. Client concerns over the levels of conflict and
requests for conflict resolution interventions may be inappropriate. The organization’s
design may be a more important driver of conflict than individual skill levels or group
functioning problems.
The primary design components of group effectiveness are goal clarity, task struc-
ture, composition, group functioning, and performance norms. Each of these design
components must be considered in interpersonal and group process interventions. For
example, if a group’s goals are not clear, improving their decision-making processes
may only allow them to be more effective at solving the wrong problems.
In general, however, individual and group process interventions address the task
structures, group functioning, and performance norm elements of the model, and their
current characteristics must be diagnosed. Such social processes directly and indirectly
affect how work is accomplished. When group process promotes effective interactions,
groups are likely to perform tasks successfully.1 Group process includes:
• Communications. One area of interest in all of these interventions is the nature and
style of communication, or the process of transmitting and receiving thoughts, facts,
and feelings. Communication can be overt—who talks to whom, about what, for
how long, and how often. It can include body language, including facial expressions,
fidgeting, posture, and hand gestures.2 Communication can also be covert, as when a
manager says, “I’m not embarrassed” as his or her face turns scarlet. Covert commu-
nication is “hidden” and the process consultant often seeks to find the best way to
make the message more explicit.
• The functional roles of group members. The OD practitioner must be keenly aware
of the different roles individual members take on in a group. Both upon entering and
while remaining in a group, individuals must address and understand the self-identity,
influence, and power issues that will satisfy personal needs while working to accom-
plish group goals. In addition, group members must take on roles that enhance:
(a) task-related activities, such as giving and seeking information, elaborating work
processes, and coordinating and evaluating activities; and (b) group-maintenance
actions, directed toward holding the group together as a cohesive team, including
encouraging, harmonizing, compromising, setting standards, and observing. Many
ineffective groups perform little group maintenance, and this is a primary reason for
bringing in an OD consultant.
266 PART 3 HUMAN PROCESS INTERVENTIONS

• Group problem solving and decision making. To be effective, a group must be able
to identify problems, examine alternatives, and make decisions. For example, one
way of making decisions is to ignore a suggestion, as when one person makes a sug-
gestion and someone else offers another before the first has been discussed. A sec-
ond method is to give decision-making power to the person in authority. Sometimes
decisions are made by minority rule—the leader arrives at a decision and turns for
agreement to several people who will comply. Frequently, silence is regarded as con-
sent. Decisions can also be made by majority rule, consensus, or unanimous consent.
The OD consultant can help the group understand how it makes decisions and the
consequences of each decision process, as well as help diagnose which type of deci-
sion process may be the most effective in a given situation. Decision by unanimous
consent or consensus, for example, may be ideal in some circumstances but too
time-consuming or costly in other situations.
• Group norms. Especially if a group of people works together over a period of time,
it develops group norms or standards of behavior about what is good or bad,
allowed or forbidden, right or wrong. The OD consultant can be very helpful in
assisting the group to understand and articulate its own norms and to determine
whether those norms are helpful or dysfunctional. By understanding its norms and
recognizing which ones are helpful, the group can grow and deal realistically with its
environment, make optimum use of its own resources, and learn from its own
experiences.3
• The use of leadership and authority. An OD practitioner needs to understand pro-
cesses of leadership and how different leadership styles can help or hinder a group’s
functioning. In addition, the consultant can help the leader adjust his or her style to
fit the situation.
Each interpersonal and group process intervention includes diagnosis as an essential
ingredient and is guided by the client’s objectives and understanding of these processes.
10-2 Process Consultation
Process consultation (PC) is a general framework for carrying out helping relationships.4
Schein defines process consultation as “the creation of a relationship that permits the
client to perceive, understand, and act on the process events that occur in [his or her]
internal and external environment in order to improve the situation as defined by the
client.”5 The process consultant does not offer expert help in the form of solutions to
problems, as in the doctor–patient model. Rather, the process consultant works to help
managers, employees, and groups assess and improve human processes, such as commu-
nication, interpersonal relations, decision making, and task performance. Schein argues
that effective consultants and managers should be good helpers, aiding others in getting
things done and in achieving the goals they have set.6 Thus, PC is as much a philosophy
as a set of techniques aimed at performing this helping relationship. The philosophy
ensures that those who are receiving the help own their problems, gain the skills and
expertise to diagnose them, and solve them themselves. PC is an approach to helping
people and groups help themselves.
As a philosophy of helping relationships, Schein proposes ten principles to guide the
process consultant’s actions.7
• Always try to be helpful. Process consultants must be mindful of their intentions,
and each interaction must be oriented toward being helpful.
CHAPTER 10 INTERPERSONAL AND GROUP PROCESS APPROACHES 267

• Always stay in touch with the current reality. Each interaction should produce
diagnostic information about the current situation. It includes data about the client’s
opinions, beliefs, and emotions; the system’s current functioning; and the practi-
tioner’s reactions, thoughts, and feelings.
• Access your ignorance. An important source of information about current reality is
the practitioner’s understanding of what is known, what is assumed, and what is not
known. Process consultants must use themselves as instruments of change.
• Everything you do is an intervention. Any interaction in a consultative relationship
generates information as well as consequences. Simply conducting preliminary inter-
views with group members, for example, can raise members’ awareness of a situation
and help them see it in a new light.
• The client owns the problem and the solution. This is a key principle in all OD
practice. Practitioners help clients solve their own problems and learn to manage
future change.
• Go with the flow. When process consultants access their own ignorance, they often
realize that there is much about the client system and its culture that they do not
know. Thus, practitioners must work to understand the client’s motivations and
perceptions.
• Timing is crucial. Observations, comments, questions, and other interventions intended
to be helpful may work in some circumstances and fail in others. Process consultants
must be vigilant to occasions when the client is open (or not open) to suggestions.
• Be constructively opportunistic with confrontive interventions. Although process
consultants must be willing to go with the flow, they also must be willing to take
appropriate risks. From time to time and in their best judgment, practitioners must
learn to take advantage of “teachable moments.” A well-crafted process observation
or piece of feedback can provide a group or individual with great insight into their
behavior.
• Everything is information; errors will always occur and are the prime source for
learning. Process consultants never can know fully the client’s reality and invariably
will make mistakes. The consequences of these mistakes, the unexpected and sur-
prising reactions, are important data that must be used in the ongoing development
of the relationship.
• When in doubt, share the problem. The default intervention in a helping relation-
ship is to model openness by sharing the dilemma of what to do next.
10-2a Basic Process Interventions
For each of the interpersonal and group processes described above, a variety of interven-
tions may be used. In broad terms, these are aimed at making individuals and groups
more effective.8
Individual Interventions These interventions are designed primarily to help people
be more effective in their communication with others. For example, the process consul-
tant can provide feedback to one or more individuals about their overt behaviors during
meetings. At the covert or hidden level of communication, feedback can be more per-
sonal and is aimed at increasing the individual’s awareness of how their behavior affects
others. A useful model for this process has been developed by Luft in what is called the
Johari Window.9 Figure 10.1, a diagram of the Johari Window, shows that some personal
issues are perceived by both the individual and others. This is the “open” window. In the
268 PART 3 HUMAN PROCESS INTERVENTIONS

“hidden” window, people are aware of their behavior, motives, and issues, but they con-
ceal them from others. People with certain feelings about themselves or others in the
work group may not share with others unless they feel safe and protected; by not reveal-
ing reactions they feel might be hurtful or impolite, they lessen the degree of
communication.
The “blind” window comprises personal issues that are unknown to the individual
but that are communicated clearly to others. For example, one manager who made fre-
quent business trips invariably told his staff to function as a team and to make decisions
in his absence. The staff, however, consistently refused to do this because it was clear to
them, and to the process consultant, that the manager was really saying, “Go ahead as a
team and make decisions in my absence, but be absolutely certain they are the exact
decisions I would make if I were here.” Only after the manager participated in several
meetings in which he received feedback was he able to understand that he was sending
a double message. Thereafter, he tried both to accept decisions made by others and to
use management by objectives (described in Chapter 12) with his staff and with individ-
ual managers. Finally, the “unknown” window represents those personal aspects that are
unknown to either the individual or others. Because such areas are outside the realm of
the process consultant and the group, focus is typically on the other three cells.
The individual interventions described in practice encourage people to be more open
with others and to disclose their views, opinions, concerns, and emotions, thus reducing
the size of the hidden window. Further, the consultant can help individuals give feedback
to others, thus reducing the size of the blind window. Reducing the size of these two
windows helps improve the communication process by enlarging the open window, the
“self” that is open to both the individual and others. This is a very North American and
FIGURE 10.1
The Johari Window
SOURCE: Adapted from “The Johari Window,” Human Relations Training News 5 (1961): 6–7.
CHAPTER 10 INTERPERSONAL AND GROUP PROCESS APPROACHES 269

European notion and using the Johari window in this way may not be appropriate in
different cultural and cross-cultural settings.
Before OD practitioners give individual feedback or encourage others to engage in
feedback activities, they first must observe relevant events, ask questions to understand
the contextual and cultural issues fully, and make certain that the feedback is given to
the client in a usable manner.10 The following are guidelines11 for effective feedback in
a Western setting:
• The giver and receiver must have consensus on the receiver’s goals.
• The giver should emphasize description and appreciation.
• The giver should be concrete and specific.
• Both giver and receiver must have constructive motives.
• The giver should not withhold negative feedback if it is relevant.
• The giver should own his or her observations, feelings, and judgments.
• Feedback should be timed to when the giver and receiver are ready.
To the best of our knowledge, there are no guidelines for effective feedback in other
cultures, and it may be one of the best indicators of a Western bias in OD. Under the
assumption that knowing how you are perceived by others is a generally positive con-
cept, feedback should be guided by the values of the local country and organization.
For example, being “concrete and specific” may be inappropriate for relationship-
oriented cultures, and gaining consensus on the receiver’s goals or worrying about the
timing of feedback may not be an issue in cultures with strong authoritarian values.
Group Interventions These interventions are aimed at the process, content, or struc-
ture of the group. Process interventions sensitize the group to its own internal processes
and generate interest in analyzing them. Interventions include comments, questions, or
observations about relationships between and among group members; problem solving
and decision making; and the identity and purpose of the group. For example, process
consultants can help by suggesting that some part of each meeting be reserved for exam-
ining how these decisions are made and periodically assessing the feelings of the group’s
members. As Schein points out, however, the basic purpose of the process consultant is
not to take on the role of expert but to help the group share in its own diagnosis and do
a better job in learning to diagnose its own processes: “It is important that the process
consultant encourage the group not only to allocate time for diagnosis but to take the
lead itself in trying to articulate and understand its own processes.”12 This sound advice
helps to make process consultation relevant in different cultural contexts.
Content interventions help the group determine what it works on. They include
comments, questions, or observations about group membership; agenda setting, review,
and testing procedures; interpersonal issues; and conceptual inputs on task-related
topics.
Finally, structural interventions help the group examine the stable and recurring
methods it uses to accomplish tasks and deal with external issues. They include com-
ments, questions, or observations about inputs, resources, and customers; methods for
determining goals, developing strategies, accomplishing work, assigning responsibility,
monitoring progress, and addressing problems; and relationships to authority, formal
rules, and levels of intimacy.
Application 10.1 presents an example of process consultation at Christian Caring
Homes. The focus of the application is the relationship between two senior executives
during a succession process but also involves relationships with the organization’s
board and top-management team.13
270 PART 3 HUMAN PROCESS INTERVENTIONS

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1 PROCESS CONSULTATION AT CHRISTIANCARING HOMES, INC.
C
hristian Caring Homes, Inc. (CCH or “The
Homes”) is among the largest multilocation,
nonprofit senior care providers. The organi-
zation comprises four facilities spread
across two states with a strong community rep-
utation dating back 40 years. After 35 years at
the helm, the CEO, Winston, decided to retire at
age 62. The CCH Board decided that before
conducting an external search for Winston’s
successor, they would explore the qualifications
of three internal candidates. The Board chose
CCH’s young CFO, Paul, as Winston’s succes-
sor. Paul had several years’ experience as an
external auditor and three years within the orga-
nization. The Board announced that Winston
was “CEO and President” and Paul would be
“CEO and President-Elect.”
The Board wanted to ensure that Paul had
the proper support to make the transition and
that Winston’s well-earned value and respect
would be preserved and leveraged. As a result,
the Board created a three-member “Transition
Steering Committee” consisting of the Board
president and two long time board members
with experience in management and recruiting.
The Committee suggested that the two leaders
might benefit from a consultant’s advice over
the agreed-upon one-year transition period.
The Steering Committee located and vet-
ted a semi-retired, locally based OD consultant,
Simon. They introduced him to the leaders for
consideration.
In the “get-acquainted” meeting of the
steering committee and the two leaders,
Simon noted that Winston and Paul appeared
congenial. They approved of Simon’s experi-
ence and his history of commitments to the
region and social service organizations. Simon
asked the two leaders what was rewarding
about their jobs and what Winston valued
about his contribution to the Homes. Winston
responded with pride about past accomplish-
ments and was supported by his designated
successor and the committee. He then took
the lead in describing the ongoing challenges
that would coincide with the transition.
After the meeting, each leader emailed
Simon expressing thanks for his attendance
and copied the other. Over the next month,
communication between Simon, Paul, and
Winston consisted of three exploratory email
exchanges and two conference calls (always
with both leaders) to address the question:
How might Simon be of help?
The two leaders then suggested that Simon
make a proposal. They wanted their senior lead-
ership team (SLT) to review any possible work-
ing arrangement. Simon wrote a short proposal
for a four-month “transition process consulta-
tion” to explore and advance the handoff
between Winston and Paul and the transition
of their roles, responsibilities, and relationships
with the board and the SLT. At the end of that
time, the two leaders could assess the value
from the consultation. Simon further recom-
mended a retainer arrangement, obviating the
concern for open-ended consultant expense.
The SLT discussed the proposal at their
next monthly meeting. Winston and Paul
together called Simon to report that the SLT
had agreed they could proceed with the
engagement.
Simon reflected on the work to date. It had
taken more than two months to agree to work
together. He felt impatient with what appeared
to be extreme caution on the part of the top
leadership of CCH. He also noted that the
two leaders were never apart. They always
appeared together at SLT meetings, on calls,
or in emails. However, the process seemed
interesting and at this point, he “went with
the flow,” slow as it was.
Simon attended the next two monthly day-
long SLT meetings. He did not participate
except when asked for his view. Invariably,
he responded with a group process observa-
tion that tended to relate to one of three
themes that emerged during the meetings:
1. The operations leaders formed subgroups
based on the geography where their facili-
ties were located.
CHAPTER 10 INTERPERSONAL AND GROUP PROCESS APPROACHES 271

2. Routine HR issues absorbed a big chunk of the
agenda.
3. Paul often made statements intended to bring
a “corporate” point of view.
Simon followed up each meeting with a one-
page review of what appeared to be the key issues
regarding roles, relationships, and responsibilities
related to the transition. In follow-up discussions
with Winston and Paul, they expressed different
interests. Winston focused on individual facility
issues while Paul wondered how he could get
the SLT members to take a high-level view of
issues facing The Homes as an organizational
entity. Simon frequently commented on this differ-
ence in approach. He was aware that successfully
navigating a transition would involve the whole
organization, not just the two top roles, and he
shared that awareness.
After two more months, there appeared to be
no actions or plans regarding the transition. Simon
was surprised when the Board president called
him and asked if anything was being done about
the “organization structure.” Despite his curiosity
about where the subject of organization structure
had come from, Simon responded that he saw his
agreement as exclusively with the two principals
and that they were in the best place to communi-
cate progress to the Board and to her. The Board
president immediately agreed and was happy to
respect the client/consultant boundary.
In his next conference call with Paul and
Winston, Simon inquired if there “were any issues
around organization structure.”
The question appeared to open up a huge
trove of information. As CEO, Winston had 14
direct reports and no Chief Operating Officer role.
Simon was told the story of Pinkerton, the previous
COO, who had attempted (with the support of an
external consultant) to implement a coup through
which he would replace Winston. The Board had
intervened to fire the autocratic and “conniving”
Pinkerton. The position had not been filled for
two years. The story supported the conclusion
that the CCH executives were reluctant to take
strong, independent action and feared being
manipulated by consultants. This story of organiza-
tional intrigue and power dynamics seemed to
explain the caution and politeness that Simon had
originally observed.
Simon considered three possible choices for
what to do next:
1. Explore directly the lack of substantive action
regarding the transition of executive responsi-
bilities. Was the implication of the Pinkerton
story that the organization did not trust consul-
tants? Did they not trust him?
2. Explore the subject of a structural change. Did
the leaders see “structure” as a solution and if
so, what problem was being solved by a struc-
tural change?
3. Explore his observations that the organization
had a congenial and compliant attitude and cul-
ture. Did the Pinkerton experience result in an
organization style that devalued consensus
and transparency and favored risk-avoidance?
Simon chose the second option with the fol-
lowing hypothesis: If the leaders felt a problem
existed because of structure, then following that
path of inquiry might reveal obstacles to redistribu-
tion of leadership responsibilities—likely necessary
following Winston’s departure. It might also
expose doubts or distrust in the SLT executive
group regarding Paul’s, Winston’s, and Simon’s
motivation. Simon concluded that because of
their experience with the authoritarian Pinkerton,
the SLT members did not raise issues of doubt or
distrust. They appeared so tyrannized that Simon
later joked that they had been “Pinkerton-ized.”
Following disclosure of the painful history, and
while Winston was away at conference, Paul
arranged a business dinner with the SLT. He floated
the possibility of creating an organization for the
Homes that would not include a new COO. He
found some support for the idea and shared it
with Winston when he returned. The two leaders
asked Simon for his reaction and inquired whether
he could help with such a change.
Simon was quite surprised at Paul’s move.
Paul had openly challenged the assumption that
Winston’s laissez-faire style would be continued
during the transition period and beyond. For his
part, Winston was skeptical that “collective leader-
ship from the SLT” would render the COO role
unnecessary but accepted it as a way that Paul
could “learn the ropes.”
Simon’s first reaction was to jump at the
chance to work with structure but realized that
272 PART 3 HUMAN PROCESS INTERVENTIONS

10-2b Results of Process Consultation
Although process consultation is an important part of organization development and has
been widely practiced over the past 45 years, a number of difficulties arise in trying to
measure performance improvements as a result of process consultation. One problem is
that most process consultation is conducted with groups performing mental tasks (e.g.,
decision making); the outcomes of such tasks are difficult to evaluate. A second difficulty
with measuring PC’s effects occurs because in many cases process consultation is
such a move could have unknown implications for
a smooth transition. Instead, he chose the oppor-
tunity to readdress and possibly advance the tran-
sition process by offering an observation and a
confronting intervention.
The observation was that the transition between
Winston and Paul would necessarily require changes
throughout the organization. Working with the
proposed structure was one way (an experiment)
to anticipate and work through the changes in
responsibilities that might bring clarity for the execu-
tives constituting the SLT. Simon could help them
learn from their work.
The confronting intervention was to send Win-
ston and Paul an email with an attachment entitled
“The Leader’s First 90 Days,” and a single ques-
tion: “When does Paul’s first 90 days begin?”
The email generated numerous intense con-
versations between Paul and Winston. The con-
cept of “When does the transition of power take
place” surfaced the assumptions of the two men.
Several differences in philosophy and expectations
also surfaced. Winston thought the change would
take place in nine months. Paul thought he should
have full authority in three months! They also faced
choices about what the future CCH organization
would look like structurally and stylistically.
Simon saw the two as behaving kindly with
each other but not managing the differences. He
chose to speak individually with each to help
them clarify their concerns and to get their sugges-
tions for moving forward. Winston was not clear
that the legal transition could take place so soon
and had no proposal for what his role would be
after the “official turnover.” Paul was anxious to
make some changes and did not want Winston to
influence decisions he would have to live with in
the long term. Meeting again with the two, Simon
asked them to share their concerns and suggest
ways for moving forward. They concluded they
should describe their situation with the Transition
Steering Committee.
Subsequently, Paul, Winston, and Simon met
with the Board’s Transition Steering Committee.
Simon limited his role to encouraging openness
on the part of the two leaders as they shared
their thoughts with the committee. Led by the
Board president, the committee started to shift
from a neutral position to that of supporting
Paul’s position, the person they would be working
with in determining the future of CCH.
The committee’s dialogue resulted in Paul’s
ability to move forward with his own vision and at
the same time create a role for Winston as outgo-
ing CEO. The committee supported a decision
whereby Winston would relinquish the title of
“CEO and President” four months earlier than
planned. He would take the title of “CEO and
President-Emeritus” and serve as mentor to Paul,
reporting only to him.
Simon’s four-month “transition process consul-
tation” was coming to an end. He requested a
review of his engagement. As a result, Paul (in his
new CEO role) asked Simon to reengage for another
four months. Significantly, Paul took this decision
independent of Winston or the SLT, consulting only
with the Board president. Simon saw this as a vote
of confidence, evidence of a new set of operating
assumptions emerging, and an opportunity to sup-
port Paul as he took on his broader CEO responsibil-
ities, including building a stronger relationship with
the CCH Board and the Board president.
CHAPTER 10 INTERPERSONAL AND GROUP PROCESS APPROACHES 273

combined with other interventions in an ongoing OD program. Isolating the impact of
process consultation from other interventions is challenging.
Kaplan’s review of process-consultation studies underscored the problems of
measuring performance effects.14 It examined published studies in three categories:
(1) reports in which process intervention is the causal variable but performance is
measured inadequately or not at all, (2) reports in which performance is measured but
process consultation is not isolated as the independent variable (the case in many
instances), and (3) research in which process consultation is isolated as the causal
variable and performance is adequately measured. The review suggests that process
consultation has positive effects on participants, according to self-reports of greater per-
sonal involvement, higher mutual influence, group effectiveness, and similar variables.
However, very little, if any, research clearly demonstrates that objective task effectiveness
was increased. In most cases, either the field studies did not directly measure perfor-
mance or the effect of process intervention was confounded with other variables.
A third problem with assessing the performance effects of process consultation is
that much of the relevant research has used people’s perceptions rather than hard perfor-
mance measures as the index of success.15 Although much of this research shows positive
results, these findings should be interpreted carefully until further research is done using
more concrete measures of performance.
10-3 Third-Party Interventions
Third-party interventions focus on conflicts arising between two or more people within
the same organization. Conflict is inherent in groups and organizations and can arise
from a variety of sources, including differences in personality, task orientation, goal
interdependence, and perceptions among group members, as well as competition for
scarce resources. Tjosvold notes that too little consensus on the definition of conflict
has contributed to the perception that conflict is bad. Moreover, when it is defined as
opposing interests or divergent goals, it narrows the range of potentially productive
interventions. He suggests that conflict is best viewed as “incompatible activities.” Such
a definition opens up options for resolution, places responsibility for the conflict with the
individuals involved, and allows conflict to be seen in a positive way.16
To emphasize that conflict is neither good nor bad per se is important.17 Conflict
can enhance motivation and innovation and lead to greater understanding of ideas and
views. On the other hand, it can prevent people from working together constructively,
destroying necessary task interactions among group members. Consequently, third-
party interventions are used primarily in situations in which conflict significantly dis-
rupts necessary task interactions and work relationships among members.
Third-party interventions vary considerably depending on the kind of issues under-
lying the conflict. Conflict can arise over substantive issues, such as work methods, pay
rates, and conditions of employment, or it can emerge from interpersonal issues, such as
personalities and misperceptions. When applied to substantive issues, conflict resolution
interventions often involve resolving labor–management disputes through arbitration
and mediation. The methods used in such substantive interventions require considerable
training and expertise in law and labor relations and generally are not considered part of
OD practice. For example, when union and management representatives cannot resolve a
joint problem, they can call upon the Federal Mediation and Conciliation Service to help
them resolve the conflict. In addition, “alternative dispute resolution” (ADR) practices
increasingly are offered in lieu of more expensive and time-consuming court trials18
274 PART 3 HUMAN PROCESS INTERVENTIONS

and can provide a more structured process of conflict resolution in cultures where direct
confrontation is inappropriate. Conflicts also may arise at the boundaries of the organi-
zation, such as between suppliers and the company, between a company and a public-
policy agency, or between multiple organizations or groups.19
When conflict involves interpersonal issues in developed, Western organizations,
however, OD has developed approaches that help control and resolve it. These third-
party interventions help the parties interact with each other directly, recognize the per-
sonal choices each party is making, and facilitate their diagnosis of the conflict and its
resolution. The ability to facilitate conflict resolution is a basic skill in OD and applies
to all of the process interventions discussed in this chapter. Consultants, for example,
frequently coach clients through a conflict or help organization members resolve inter-
personal conflicts that invariably arise during process consultation and team building.
Third-party interventions cannot resolve all interpersonal conflicts in organizations,
nor should they. Many times, interpersonal conflicts are not severe or disruptive enough
to warrant attention. At other times, they simply may burn themselves out. Evidence also
suggests that other methods may be more appropriate under certain conditions. For
example, managers tend to control the process and outcomes of conflict resolution
actively when they are under heavy time pressures, when the disputants are not expected
to work together in the future, and when the resolution of the dispute has a broad
impact on the organization.20 Under those conditions, the third party may resolve the
conflict unilaterally with little input from the conflicting parties.
10-3a An Episodic Model of Conflict
Interpersonal conflict often occurs in iterative, cyclical stages known as “episodes.” An
episodic model is shown in Figure 10.2. At times, issues underlying a conflict are latent
and do not present any manifest problems for the parties. Then something triggers the
conflict and brings it into the open. For example, reports identifying cost overruns or a
dissatisfied customer can trigger a violent disagreement or frank confrontation. Because
the focus is on resolving the expense or customer problem, the interpersonal conflict
remains unresolved and again becomes latent. And again, something triggers the conflict,
making it overt, and so the cycle continues with the next conflict episode.
FIGURE 10.2
A Cyclical Model of Interpersonal Conflict
SOURCE: Managing Conflict: Interpersonal Dialogue and Third-Party Roles (Prentice Hall Organizational Development Series), 2nd ed.
by Walton, Richard E., ISBN 0201088592. © 1987 Addison-Wesley.
CHAPTER 10 INTERPERSONAL AND GROUP PROCESS APPROACHES 275

Conflict has both costs and benefits to the antagonists and to those in contact with
them. Unresolved conflict can proliferate and expand. An interpersonal conflict may be
concealed under a cause or issue that serves to make the conflict appear more legitimate.
Frequently, the overt conflict is only a symptom of a deeper problem.
The episodic model identifies four strategies for conflict resolution. The first three
attempt to control the conflict and may be appropriate under a variety of organizational
and cultural conditions. Only the last approach tries to change the basic issues underly-
ing it.21 The first strategy is to prevent the ignition of conflict by arriving at a clear
understanding of the triggering factors and thereafter avoiding or blunting them when
the symptoms occur. For example, if conflict between the research and production man-
agers is always triggered by new-product introductions, then senior executives can warn
them that conflict will not be tolerated during the introduction of the latest new product.
However, this approach may not always be functional and may merely drive the conflict
underground until it explodes. As a control strategy, however, this method may help to
achieve a temporary cooling-off period.
The second control strategy is to set limits on the form of the conflict. Conflict can
be constrained by informal gatherings before a formal meeting or by exploration of other
options. It also can be limited by setting rules and procedures specifying the conditions
under which the parties can interact. For example, a rule can be instituted that union
officials can attempt to resolve grievances with management only at weekly grievance
meetings.
The third control strategy is to help the parties cope differently with the conse-
quences of the conflict. The third-party consultant may work with the people involved
to devise coping techniques, such as reducing their dependence on the relationship,
ventilating their feelings to friends, and developing additional sources of emotional
support. These methods can reduce the costs of the conflict without resolving the under-
lying issues.
The fourth method is an attempt to eliminate or to resolve the basic issues causing
the conflict. Although this objective seems the most direct and obvious approach, it is
often the most difficult to bring about.
10-3b Facilitating the Conflict Resolution Process
Walton has identified a number of factors and tactical choices that can facilitate the use
of the episodic model in resolving the underlying causes of conflict.22 The following
ingredients can help third-party consultants achieve productive dialogue between the dis-
putants so that they examine their differences and change their perceptions and beha-
viors: mutual motivation to resolve the conflict; equality of power between the parties;
coordinated attempts to confront the conflict; relevant phasing of the stages of identify-
ing differences and of searching for integrative solutions; open and clear forms of com-
munication; and productive levels of tension and stress.
Among the tactical choices identified by Walton are those having to do with diagno-
sis, the context of the third-party intervention, and the role of the consultant. One of the
tactics in third-party intervention is the gathering of data, usually through preliminary
interviewing. Group process observations can also be used. Data gathering provides
some understanding of the nature and the type of conflict, the personality and conflict
styles of the individuals involved, the issues and attendant pressures, and the partici-
pants’ readiness to work together to resolve the conflict.
The context in which the intervention occurs is also important. Consideration of the
neutrality of the meeting area, the formality of the setting, the appropriateness of
276 PART 3 HUMAN PROCESS INTERVENTIONS

the time for the meeting (that is, a meeting should not be started until a time has been
agreed on to conclude or adjourn), and the careful selection of those who should attend
the meeting are all elements of this context.
In addition, the third-party consultant must decide on an appropriate role to assume
in resolving conflict. The specific tactic chosen will depend on the diagnosis of the situa-
tion. For example, facilitating dialogue of interpersonal issues might include initiating the
agenda for the meeting, acting as a referee during the meeting, reflecting and restating
the issues and the differing perceptions of the individuals involved, giving feedback and
receiving comments on the feedback, helping the individuals diagnose the issues in the
conflict, providing suggestions or recommendations, and helping the parties do a better
job of diagnosing the underlying problem.
Third-party consultants must develop considerable skill at diagnosis, intervention, and
follow-up, and be highly sensitive to their own feelings and to those of others. They must
recognize that some tension and conflict are inevitable and that although there can be an
optimum amount and degree of conflict, too much conflict can be dysfunctional for both
the people involved and the larger organization. The third-party consultant must be sensi-
tive to the situation and able to use a number of different intervention strategies and tac-
tics when intervention appears to be useful. Finally, he or she must have professional
expertise in third-party intervention and must be seen by the parties as neutral or unbiased
regarding the issues and outcomes of the conflict resolution.
Application 10.2 describes a third-party intervention at a law firm. The OD consul-
tant was brought in by another consultant to help rescue a struggling strategic planning
process. The OD consultant initially used structural interventions to simply help the
partners get work done but eventually had to utilize more interpersonal process interven-
tions to address the personality conflicts.23
10-4 Team Building
Team building refers to a broad range of planned activities that help groups improve the
way they accomplish tasks, help members enhance their interpersonal and problem-
solving skills, and increase team performance.24 Organizations comprise many different
types of groups including permanent work groups, temporary project teams, and virtual
teams. Team building is an effective approach to improving teamwork and task accom-
plishment in such environments. It can help problem-solving groups make maximum
use of members’ resources and contributions. It can help members develop a high level
of motivation to implement group decisions. Team building also can help groups over-
come specific problems, such as apathy and general lack of member interest; loss of pro-
ductivity; increasing complaints within the group; confusion about assignments; low
participation in meetings; lack of innovation and initiation; increasing complaints from
those outside the group about the quality, timeliness, and effectiveness of services and
products; and hostility or conflicts among members.
Team building also can facilitate other OD interventions, such as employee involve-
ment, work design, restructuring, and strategic change. Those change programs typically
are designed by management teams, implemented through various committees and work
groups, and result in new teams that need to operate at a high level of effectiveness
quickly. Team building can help the groups design high-quality change programs and
ensure that the programs are accepted and implemented by organization members.
Indeed, most technostructural, human resource management, and strategic interventions
depend on some form of team building for effective implementation.
CHAPTER 10 INTERPERSONAL AND GROUP PROCESS APPROACHES 277

a
p
p
lica
tio
n
1
0
2
CONFLICT MANAGEMENT AT ROSS & SHERWIN
R
oss and Sherwin (R&S) is a 40-year-old,
Chicago-based law firm with 65 lawyers
and one of the largest specialty intellectual
property (IP) firms in the country. Since the
firm’s founding, a single Managing Partner has
run the partnership meetings and worked with
the firm’s operations director to make adminis-
trative decisions about staff and lawyers. Its
clear niche and consistently strong results
meant that the Managing Partner could spend
most of his/her time continuing their law prac-
tice. In fact, it was easy to keep your head
down and “just practice law” at R&S.
Beginning in 2008, changes in the firm’s
strategy and pressure from clients and compe-
titors began to challenge the easy-going style
of the organization. For example, the recently
added IP litigation services required new law-
yers with different skill sets. In addition, clients
were pressuring the firm to lower hourly rates
for basic transactional work, such as trademark
and patent applications, and to increase the
number of litigation cases under a “contin-
gency” arrangement. That is, R&S’s fees
would depend on the court’s findings and sig-
nificantly increase the firm’s risks compared to
the bill-by-the-hour arrangement that had
worked for years.
Most of the transactional lawyers had
reservations about the contingency work.
Although the payoff could be good for the vic-
torious inventor and the law firm who repre-
sented him, the possibility of sinking a million
dollars of billable time into a case with poten-
tially no return was terrifying to some. As a
result, the firm’s Managing Partner began call-
ing for regular meetings to discuss whether to
invest in contingency cases and how steeply to
discount transactional work. In 2009, the firm
lost two partners to competitors and partner
income dipped in 2009 and 2010.
By the end of 2010, the partners had
agreed on two things: they needed to think
more about firm strategy and they needed a
new leadership structure. The R&S partners
believed that a single managing partner could
no longer lead the firm because the two very
different businesses, IP litigation (increasingly
contingency work) and IP transactions (hourly
work with significant rate pressure) required
representation at the highest level. Moreover,
Andrew, the Managing Partner since 2000,
was eager to retire and fully endorsed the
need for new leadership.
In 2011, R&S named its first-ever “Co-
managing Partners,” Brad and Ron. Brad is
conservative in every way. He is slow to dele-
gate and even slower to endorse the litigation
group’s growth through contingency work.
Ron, on the other hand, is a risk taker in
terms of the work he will take on, and in
terms of his willingness to pass responsibilities
to other lawyers early in their careers.
Brad and Ron also share certain character-
istics, however. While they are effective at
navigating thorny conversations with clients
and adversaries, they have little patience for
working through the firm’s internal differences.
Both of them will say what people want to hear
and then go off and do things as they see fit.
The downside of this common trait
showed up in their first action as Comanaging
Partners. They agreed to lead the firm through
a strategic planning process and hired an exter-
nal consultant familiar with law firm strategy to
assist. Brad believed that Ron was eager to
have a discussion about expansion, including
contingency litigation but believed that he
was so focused on his own group’s success
that he might jeopardize the core business
and push risk-averse lawyers into uncomfort-
able situations. Ron believed that Brad’s pri-
mary interest was in stabilizing the firm and
“protecting” the hourly work that “paid the
bills,” and worried that Brad saw litigation as
a dispensable part of the firm.
However, instead of engaging in a thorough
discussion and exchanging views about the mer-
its of the different options, they chose to gather
input from others. They argued publicly that this
was the right thing to do. Privately, they weren’t
so much gathering data as they were avoiding
one another and an uncomfortable conflict. They
walked into their initial all-partners planning
278 PART 3 HUMAN PROCESS INTERVENTIONS

meeting as Comanaging Partners with different
agendas and considerable distrust for one another.
Twenty minutes into the meeting, Dan, the
firm’s leading transactional practice partner and
enemy of any planning process that was unrelated
to supporting his work, began his cross-
examination of the two new leaders. While Dan
had some good questions about where Ron and
Brad thought the planning process would lead, he
quickly attached his remarks to the supremacy of
his own practice, his potential new clients, and that
any other investment represented a threat to him
and his team. The questions carried a hostile tone
and were met with defensiveness by Ron and
Brad. Ron was feeling alone and needing to defend
the idea of expanding contingency work, and Brad
felt attacked by an influential partner in one of his
first efforts at firm-wide leadership. The meeting
limped along but ended with everyone feeling
that nothing was accomplished and wondering
how or if Ron and Brad were going to be able to
effectively lead the firm.
Ron and Brad each blamed the other for not
having a clearer plan and structure for the meeting.
They each believed that the others’ misplaced
agenda created the opening for Dan to torpedo
the proceedings. Again, however, rather than look-
ing at and dealing with one another, they turned
away from each other and pointed at Dan.
The strategy consultant had seen enough. She
could see the conflict derailing the strategy formu-
lation process and recommended an OD consul-
tant with conflict resolution experience.
As the OD consultant entered the system, Ron
and Brad presented their recommendation: “fix”
Dan and everything would be ok. Each of them
agreed that Dan was a trouble-maker and would
remain a challenging presence as they tried to
lead the firm. When they did finally drop the sub-
ject of Dan and compare visions for the firm, Ron
would waive the banner about the importance of
growth and balancing hourly work with the poten-
tial for big victories, and Brad would dig into his
position that too much risk scared transactional
lawyers and threatened the stability of the firm.
They would quickly get frustrated, shorten the
meeting, and go back to what they each did so
well—practicing law.
The most detrimental aspect of the unresolved
tension between them was the conversations that
took place behind each other’s backs. Ron would
worry aloud that Brad did not see an important role
for litigation going forward. He described Brad as
chummy with his old friends and unwelcoming of
anything that threatened his conservative view of
the firm. Brad would describe litigation as Ron’s
pet project and motivated by their inability to
develop hourly work. He told his partners that he
didn’t trust that Ron provided all relevant informa-
tion about the cases he wanted the firm to invest
in. They said they talked more about their conflict
to their other partners than they did to one another.
To make the recommendation palatable for
Dan, Ron and Brad proposed that the three part-
ners work together in a leadership development
process. Initially, Dan pretended to be on board
with the plan. Soon thereafter, however, it was
clear that Dan wanted nothing to do with coaching,
leadership development, or help of any kind. Ron
and Brad were left looking at each other. Realizing
that the firm was, indeed, at a precarious juncture
and needed strong leadership from them, the OD
consultant proposed, and Ron and Brad agreed to
engage in a process designed to help the two of
them manage their conflict so that they could
develop and implement a strategy for the firm.
The OD consultant’s initial impression was
that these two brilliant lawyers rarely, if ever,
stopped to think about the impact of their style
on others in the firm. Before they could have a
constructive dialogue about working together
more effectively, Ron and Brad needed some
understanding of their own roles in the dysfunc-
tional dynamic. The first step was to gather feed-
back and help them see how others perceived
them.
Ron and Brad each went through a full day of
meetings with the consultant to discuss the feed-
back, to articulate a vision for the firm, and to
describe a collaborative relationship with the
other. Over the course of the day, they were
each quite articulate about what they wanted to
help the firm accomplish, where they found them-
selves frustrated, and how each of them viewed
the other.
For the first time since their appointment as
managing partners, each of them drafted bullet
points describing a vision for the firm. The premise
of this exercise was that there might be a good
amount of common ground; and, if all of the key
CHAPTER 10 INTERPERSONAL AND GROUP PROCESS APPROACHES 279

items were laid out on the table, it might be possi-
ble to work through the various interests, see what
was attainable, and what they could agree on.
Each of the partners also created a set of steps
that the two of them could take to develop a
more trusting, coordinated relationship as Comana-
ging Partners.
After the one-on-one meetings, the OD consul-
tant asked that they share with each other their
visions for the firm and their own action steps to
create collaborative leadership. They were genu-
inely surprised by the similarities on the lists.
Brad, to Ron’s surprise, did want to expand the
firm. He had a different timeline and his view
included satellite offices, but he wanted to build.
Ron was pleased to see that Brad was not “hun-
kering down” and riding things out until his retire-
ment. Ron, to Brad’s relief, never envisioned the
contingency work consuming more that 20% of
the firm’s billable time. This was still a bigger num-
ber than Brad would like, but it was a meaningful,
reasonable limitation that Ron put forth.
Walking through these and other concrete
items on their respective bullet lists, they saw
that they were largely wrong in their assumptions
about what the other person did or did not want to
accomplish as Comanaging Partner. Similarly,
walking together through their respective “better
collaboration” lists, they saw that they both knew
they needed more time with just the two of them
together communicating (the norm had been to
include the COO, third member of the Executive
Committee, in all of their meetings). They realized
that they both tended to posture and take exagger-
ated positions in front of an audience. They also
agreed to be more open and quicker to raise issues
and concerns with one another.
The OD consultant had follow-up calls with
each of them over the next six months to follow
up on commitments that they made to each other
based on the two lists. They made significant prog-
ress. For example, they developed a contingency
work strategy that created a portfolio of cases with
different levels of investment. The portfolio would
ramp up only as positive verdicts and rewards
materialized. This allowed Ron to see that growth
was possible depending on the success of his
group, and it allowed Brad to see that there were
manageable limitations on the risk. They also were
successful in carving out some meeting time for
just the two of them. However, they were not suc-
cessful in being open with one another and speak-
ing up when they had a concern about how they
were working together or what the other person
was up to.
Despite the forward progress and excellent
financial results in six months since engaging in
the process, both Ron and Brad remained “worn
out,” “exhausted,” “stressed,” and believed they
were on thin ice as leaders and with one another.
For example, Ron and Brad presided over a part-
nership meeting that Dan hijacked in the first
15 minutes. Dan asked pointed questions about a
new contingency case. In Ron’s mind, this should
have been an easy distraction to dismiss. He and
Brad were aligned on the plan related to the intake
of contingency work and the partners had signed
on. If Brad, the transactional partner of the duo,
had simply and clearly told Dan that the new case
was accepted pursuant to the agreed-upon sys-
tem, the discussion would have ended. However,
Brad said nothing and left Ron to defend (with the
potential appearance of self-interest) the decision
to take the case. Ron felt hung out to dry.
Despite some excellent progress together, the
partnership meeting and other similar events trig-
gered old patterns and familiar flare-ups. Feeling
frustrated, Ron and Brad described the hijacked part-
nership meeting in their next session with the OD
consultant. The consultant reminded them of the
important steps that they had taken together over
the previous months and that they had jointly
steered the firm out of a difficult business cycle for
many law firms in the country. He assured them that
a “conflict-free” partnership was not possible and
not even the goal. They had gotten to the point
where they could remain focused on joint business
goals and related tasks despite the occasional flare-
ups; however, their relationship needed more resil-
ience. They were too quick to doubt one another
and to doubt themselves as an effective unit.
Any “team building” to date had been done
through the work of managing the firm. Ron and
Brad, both doers, related easily to the task-
orientation of making lists and checking items off
of the list. The consultant had remained focused on
structural interventions as well. However, seeing
the frustration in both of them, he believed it was
time to take a chance and introduce a more explicit
relationship-building component to the meetings.
280 PART 3 HUMAN PROCESS INTERVENTIONS

The importance of team building is well established, and its high use is expected to
continue in the coming years. Management teams are encountering issues of greater
complexity and uncertainty, especially in such fast-paced industries as software and
hardware development, entertainment, and health and financial services. Team building
can provide the kind of teamwork and problem-solving skills needed to tackle such
issues. When the team represents the senior management of an organization, team build-
ing can be an important part of establishing a coherent corporate strategy, and can pro-
mote the kind of close cooperation needed to implement complex strategies and new
forms of governance.25 As manufacturing and service technologies continue to
develop—for example, just-in-time inventory systems, lean manufacturing, and service
quality concepts—there is increasing pressure on organizations to implement team-
based work designs. Team building can assist in the development of group goals and
norms that support high productivity and quality of work life.
The globalization of work and organizations implies that people from different cul-
tures and geographic locations will increasingly interact over complex management and
operational tasks using a variety of information and communication technologies. Team-
building activities for these “virtual” and cross-cultural teams have increased substan-
tially over the past several years.26 Most team-building processes are based on assump-
tions of face-to-face interaction and relationships are built partially on the basis of visual
cues. In virtual teams, research suggests that closeness between team members is created
through proactive offers of help and support on task-related issues, and maintained
through frequent, short, and task-focused communications (often technology mediated).
Thus, team-building can help virtual teams to examine cross-cultural issues and their
impact on decision making and problem solving, facilitate communication processes
where tone and body language clues are absent, and build trust.
Finally, mergers and acquisitions, restructurings, and strategic alliances continue to
proliferate. The success of these endeavors depends partly on getting members from
different organizations to work together effectively. Team building can facilitate the
formation of a unified team with common goals and procedures.
In the OD literature, team building is not clearly differentiated from process consul-
tation and group facilitation. This confusion exists because most team building includes
The OD consultant proposed that the partners join
him on a stand-up paddle-board outing on the
ocean. They had not seen one another looking
quite so foolish and despite a couple of mishaps
getting out through the surf, they had never before
shared much laughter.
The freeing, shared experience created a very
different tone for the meeting that followed and
the most direct discussion of trust between
them. Ron talked about Brad’s silence at the part-
ners meeting and Brad talked about his feeling that
Ron was less than completely forthcoming about
all material facts related to contingency cases he
brought into the firm. Brad’s concerns were about
the timing of the information and the level of detail.
The comments from each of them came across as
confronting, but rather than the usual defensive-
ness or steering the conversation to Dan or some-
thing else; they both owned up to what they could
and should have done differently. The conflict res-
olution intervention followed a traditional OD pro-
cess. It began with diagnosis, working with the
energy of the client, and initially focused on struc-
tural and behavioral changes that helped the part-
ners get work done. As trust was developed, the
consultant was able to suggest other interventions
that helped the two partners begin building trust at
deeper levels of their relationship.
CHAPTER 10 INTERPERSONAL AND GROUP PROCESS APPROACHES 281

process consultation—helping the group diagnose and understand its own internal
processes—and facilitation—providing structure to a group’s interactions so that it can
focus on an agenda and exchange information. However, process consultation is a more
general approach to helping relationships than is team building. Team building focuses
explicitly on helping groups perform tasks and solve problems more effectively. Process
consultation, on the other hand, is concerned with establishing effective helping relation-
ships in organizations while facilitation often represents a substitute for group process. It
is seen as key to effective management and consultation and can be applied to any help-
ing relationship, from subordinate development to interpersonal relationships to group
development. Thus, team building consists of process consultation plus other, more
task-oriented interventions.
Team building is applicable in a large number of situations, from starting a new team,
to resolving conflicts among members, to revitalizing a complacent team. Dyer has devel-
oped a checklist for identifying whether a team-building program is needed and whether
the organization is ready to start such a program (Table 10.1).27 If the problem is a struc-
tural or technical one, an intergroup issue, an administrative mistake, or a conflict between
only two people, team building would not be an appropriate change strategy.
10-4a Team-Building Activities
A team is a group of interdependent people who share a common purpose, have common
work methods, and hold each other accountable.28 The nature of that interdependence var-
ies, creating the following types of teams: groups reporting to the same supervisor, manager,
or executive; groups involving people with common organizational goals; temporary groups
formed to do a specific, one-time task; groups consisting of people whose work roles are
interdependent; and groups whose members have no formal links in the organization but
whose collective purpose is to achieve tasks they cannot accomplish alone. Another impor-
tant variable in teams is location. When team members are in close proximity, a traditional
team exists; when members are geographically dispersed and their interaction is mediated
by information technology, a virtual team exists.
Several factors can affect the outcomes of any specific team-building activity: the
length of time allocated to the activity, the team’s willingness to look at its processes,
the length of time the team has been working together, the cultural backgrounds of
team members, and the team’s permanence. Consequently, the results of team-building
activities can range from comparatively modest changes in the team’s operating mechan-
isms (e.g., meeting more frequently or gathering agenda items from more sources) to
much deeper changes (e.g., modifying team members’ behavior patterns or the nature
and style of the group’s management, or developing greater openness and trust).
Hackman has proposed that effective teams produce outputs that satisfy external
stakeholders, constantly improve their team functioning, and have members that are
learning.29 As a result, team-building interventions can be categorized according to
their purpose and focus (see Table 10.2). Team-building activities can be oriented toward
(1) individual behavior, (2) group behavior, or (3) the group’s integration with its orga-
nizational context. They also can be classified according to whether their purpose is
(1) diagnostic or (2) improvement. A particular team-building activity can overlap these
categories, and, on occasion, a change in one area will have negative results in other
areas. For example, a very cohesive team may increase its isolation from other groups,
leading to intergroup conflict or other dysfunctional results, which in turn can have
a negative impact on the total organization unless the team develops sufficient diagnostic
skills to recognize and deal with such problems.
282 PART 3 HUMAN PROCESS INTERVENTIONS

TABLE 10.1
Team-Building Checklist
I. Problem identification: To what extent is there evidence of the following problems in your work unit?
Low Evidence Some Evidence High Evidence
1. Loss of production or work-unit output 1 2 3 4 5
2. Grievances or complaints within the work unit 1 2 3 4 5
3. Conflicts or hostility between unit members 1 2 3 4 5
4. Confusion about assignments or unclear
relationships between people
1 2 3 4 5
5. Lack of clear goals or low commitment to goals 1 2 3 4 5
6. Apathy or general lack of interest or
involvement of unit members
1 2 3 4 5
7. Lack of innovation, risk taking, imagination,
or taking initiative
1 2 3 4 5
8. Ineffective staff meetings 1 2 3 4 5
9. Problems in working with the boss 1 2 3 4 5
10. Poor communications: people afraid to speak up,
not listening to each other, or not talking together
1 2 3 4 5
11. Lack of trust between boss and members or
between members
1 2 3 4 5
12. Decisions are made that people do not
understand or agree with
1 2 3 4 5
13. Good work is not recognized or rewarded 1 2 3 4 5
14. Lack of encouragement for working together in
a better team effort
1 2 3 4 5
Scoring: Add the scores for the 14 items. If your score is between 14 and 28, there is little evidence your
unit needs team building. If your score is between 29 and 42, there is some evidence but no immediate
pressure, unless two or three items are very high. If your score is between 43 and 56, you should think
seriously about planning the team-building program. If your score is over 56, team building should be top
priority for your work unit.
II. Are you (or your manager) prepared to start a team-building program? Consider the following
statements. To what extent do they apply to you or your department?
Low Medium High
1. You are comfortable in sharing organizational leadership and decision
making with subordinates and prefer to work in a participative
atmosphere.
1 2 3 4 5
continued
CHAPTER 10 INTERPERSONAL AND GROUP PROCESS APPROACHES 283

TABLE 10.1
Team-Building Checklist, (continued )
Low Medium High
2. You see a high degree of interdependence as necessary among
functions and workers in order to achieve your goals.
1 2 3 4 5
3. The external environment is highly variable or changing rapidly, and you
need the best thinking of all your staff to plan for these conditions.
1 2 3 4 5
4. You feel you need the input of your staff to plan major changes or
develop new operating policies and procedures.
1 2 3 4 5
5. You feel that broad consultation among your people as a group in goals,
decisions, and problems is necessary on a continuing basis.
1 2 3 4 5
6. Members of your management team are (or can become) compatible
with each other and are able to create a collaborative rather than a
competitive environment.
1 2 3 4 5
7. Members of your team are located close enough to meet together as
needed.
1 2 3 4 5
8. You feel you need to rely on the ability and willingness of subordinates
to resolve critical operating problems directly and in the best interest of
the company or organization.
1 2 3 4 5
9. Formal communication channels are not sufficient for the timely
exchange of essential information, views, and decisions among your
team members.
1 2 3 4 5
10. Organization adaptation requires the use of such devices as project
management, task forces, or ad hoc problem-solving groups to augment
conventional organization structure.
1 2 3 4 5
11. You feel it is important to bring out and deal with critical, albeit sensitive,
issues that exist in your team.
1 2 3 4 5
12. You are prepared to look at your own role and performance with your
team.
1 2 3 4 5
13. You feel there are operating or interpersonal problems that have
remained unsolved too long and need the input from all group
members.
1 2 3 4 5
14. You need an opportunity to meet with your people to set goals and
develop commitment to these goals.
1 2 3 4 5
Scoring: If your total score is between 50 and 70, you probably are ready to go ahead with the team-
building program. If your score is between 35 and 49, you probably should talk the situation over with your
team and others to see what would need to be done to get ready for team building. If your score is
between 14 and 34, you probably are not prepared to start team building.
SOURCE: W. G. Dyer, Team Building: Issues and Alternatives, 42–46. © 1987. Reprinted by permission of the Estate of W. G. Dyer.
284 PART 3 HUMAN PROCESS INTERVENTIONS

10-4b Interventions Relevant to Individual Behavior
People come into groups and organizations with varying needs for achievement, inclu-
sion, influence, and belonging. These needs can be supported and nurtured by the
team’s structure and process or they can be discouraged. Diagnostic interviews and
personal-style instruments can help members to better understand their motivations,
preferences, or emotions in the group context. It results in one or more of the members
gaining a better understanding of the way inclusion, emotions, control, and power affect
problem solving and other group processes, and provide choices about their degree of
involvement and commitment. Such activities provide information so that people have
a clearer sense of how their needs and wants can or will be supported.
Improvement activities that address an individual’s behavior in a group include coaching,
360-degree feedback, and assistance with conflict. These interventions attempt to alter the
group’s ongoing processes by focusing on the behaviors and attitudes of individual members.
For example, one team’s typical decision-making process included the leader having several
agenda items for discussion. Each of the items, however, had a predetermined set of actions
that she wanted the group to take. Most members were frustrated by their inability to influ-
ence the conclusions. The team-building process consisted of coaching the team leader and
group members about ways to change this process. The leader received feedback about
specific examples of her not-so-subtle manipulation to arrive at preconceived decisions and
how group members felt about it. At the next meeting, the leader acknowledged the feedback
and indicated her willingness to be challenged about such preconceived decisions. Team
members expressed their increased willingness to engage in problem-solving discussions,
their trust in the leader, and their ability to make the challenge without fear of reprisal.
10-4c Interventions Relevant to the Group’s Behavior
The most common focus of team-building activities is behavior related to task perfor-
mance and group process. In an effective team, task behavior and group process must
be integrated with each other as well as with the needs and wants of the people making
TABLE 10.2
Categories of Team-Building Interventions
Focus of
Intervention Individual Behavior Group Behavior
Integration with
Organization
Diagnosis Assessment instruments
and interview data to
understand personal
style and motivation
Team surveys,
interviews, and
observations to
understand group
operations
Interviews and surveys
from internal customers
and other group stake-
holders to understand
group’s role and
effectiveness
Improvement Individual coaching and
feedback
360-degree feedback
Third-party conflict
resolution
Group vision, mission,
purpose
development
Role clarification and
decision rights
Strategic planning and
stakeholder mapping
Large group intervention
Intergroup conflict
resolution
SOURCE: Adapted from W.G. Dyer, Team Building: Issues and Alternatives, 1987.
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CHAPTER 10 INTERPERSONAL AND GROUP PROCESS APPROACHES 285

up the group. Diagnostic activities involve gathering data through the use of team sur-
veys or, more commonly, through interviews. The nature of the data gathered will vary
depending on the purpose of the team-building program, the consultant’s knowledge
about the organization and its culture, and the people involved. The consultant already
may have obtained a great deal of data by sitting in as a process observer at staff and
other meetings. The data gathered also will depend on what other OD efforts have
taken place in the organization. By whatever method obtained, however, the data usually
include information on leadership styles and behavior; goals, objectives, and decision-
making processes; organizational culture, communication patterns, and interpersonal
relationships and processes; barriers to effective group functioning; and task and related
technical problems. Diagnostic activities often establish a framework within which fur-
ther work can be done.
Improvement activities aim to improve the group’s process and functioning. A vari-
ety of exercises have been described by different authors.30 They include role clarifica-
tion, improving goal clarity and member commitment, modifying or clarifying the
decision-making or problem-solving process, changing norms, increasing risk taking
and trust, and improving communication.
Application 10.3 presents an example of a team-building meeting involving a top-
management team.31 Ask yourself the following questions as you read this case.
• Do you agree with Ted’s and the executive committee’s decision to make the work-
shop’s focus task-oriented vs. more interpersonally oriented on the relationships?
What do you think of Ted’s choices during the workshop?
• Could an external consultant have followed Ted’s approach and gotten a similar
result? What other choices, as an internal consultant, did Ted have?
• What were the benefits and risks associated with Ted’s decision to start working
with the directors before engaging the executive committee first?
10-4d Interventions Affecting the Group’s Integration with the
Rest of the Organization
As a team gains a better understanding of itself and becomes better able to diagnose and
solve its own problems, it focuses on its role within the organization. A group’s relation-
ship to the larger organizational context is an important aspect of group effectiveness.32
Diagnostic activities usually focus on understanding the group’s organizational role, how
its goals support the larger organization, or how the group interacts with other groups by
interviewing internal customers and other stakeholders.
Improvement activities involve strategic planning and stakeholder mapping
interventions to modify the group’s contribution to the organization, how it acquires
resources, or alters its outputs in terms of cost, quality, and quantity. Sometimes,
the team may recognize a need for more collaboration with other parts of the
organization and may try to establish a project team that crosses the boundaries of
existing teams.
As the team becomes more cohesive, it usually exerts a stronger influence on other
groups within the organization. This can lead to intergroup conflict and the need for
large group interventions or intergroup conflict resolution interventions (Chapter 11).
Because that is one area in which team building can have negative effects, the process
consultant must help the group understand its role within the larger organization,
develop its own diagnostic skills, and examine alternative action plans so that intergroup
tensions and conflicts do not expand.
286 PART 3 HUMAN PROCESS INTERVENTIONS

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3 ALIGNING SENIOR TEAMS AT VAYCOT PRODUCTS
V
aycot Products (a disguised name) is a pub-
licly traded, 28-year-old $750 million medi-
cal equipment manufacturer and marketer.
Their products include MRI, ultrasound,
and X-ray machines. Corporate performance
in 2011 had been dismal, and the organization
was under a great deal of pressure to improve
results. The organization had missed sales and
earnings targets for seven consecutive quar-
ters, revenues were down 7%, and growth
rates were half the industry average. Vaycot’s
board, industry analysts, and a well-known cor-
porate raider were vocal with their concerns.
People described Vaycot’s culture as
“strong and toxic.” Forty-eight percent of
employees were disengaged and 58% were
considering leaving the company. A recent sur-
vey asked employees to describe the culture,
and more than 35% of employees used the
terms angry, disrespectful, fear-based, para-
lyzed, penalizing, risk-averse, or untrusting.
Employees often felt pressured to cut corners
or engage in unethical practices to get work
done and achieve overly aggressive goals.
The organization was managed by two
teams: the executive committee and the oper-
ating committee. The executive committee con-
sisted of Oscar (the CEO) and eight functional
vice presidents. The broader operating commit-
tee consisted of the executive team plus the
directors who reported to them. Decision mak-
ing in these groups was slow to nonexistent
because the directors and vice presidents
feared being derided in public by the CEO over
a wrong decision. Despite being very capable,
the vice presidents had learned how to deal
with Oscar’s autocratic, volatile, and intimidat-
ing leadership style. Most of their time was
spent in meetings being told how to do their
job or making course corrections to adjust to
Oscar’s ever-changing mind.
Not surprisingly, the vice presidents were
distracted, demotivated, and disengaged, and
the negativity flowed down directly to the
directors. The directors were under constant
pressure and usually in crisis mode. A small
group of directors asked the internal OD
consultant, Ted, for help. Ted knew most of
the directors primarily through one-on-one
coaching over the years, and he guided a sub-
group of the operating committee through a
process to increase trust, collaboration, and
team effectiveness.
ENTRY AND CONTRACTING
After hearing from several of the directors
about how well the process worked, and see-
ing firsthand the directors’ improved relation-
ships and results, the CFO and the vice
presidents of sales and operations approached
Ted to see if he would work with the executive
committee.
Ted was candid. “I’m hesitant to do it
because of Oscar. Based on my interactions
with him, I’m concerned that his need for con-
trol and resistance to getting feedback will keep
him from being a constructive participant.” The
vice presidents agreed with Ted’s assessment
and asked if he’d work with just them. Ted was
reluctant on this point as well. He explained that
team building works best when the leader
actively participates and is willing to deal with
any emergent issues. That left the ball in the
vice presidents’ court. They needed to convince
their boss to participate and that would require
giving Oscar feedback on why they believed a
team-based intervention was needed.
As Ted continued the conversations, he
came to the conclusion that the only way that
the vice presidents could actually influence
Oscar was with hard data. He offered to inter-
view the vice presidents and then facilitate a
meeting where they would deliver the feed-
back to Oscar. When the interviews were com-
plete, he walked the group through about a
dozen findings and insights. After some brief
discussion and a few minor revisions, the
group confirmed that the conclusions were
valid and they agreed unanimously that it was
finally time to meet with Oscar.
Ted asked how the feedback meeting
should be structured. No one spoke. Despite
their promise to follow through and talk to
CHAPTER 10 INTERPERSONAL AND GROUP PROCESS APPROACHES 287

Oscar, no one wanted to be in the room when
Oscar heard their feedback. Despite Ted’s frustra-
tion, he offered to meet with Oscar on their behalf.
They still hesitated because they feared the reper-
cussions if Oscar were to know who said what.
Ted promised anonymity and then got the go
ahead to talk to Oscar.
This was a pivot point for Ted. On one hand, he
didn’t want to make a career-limiting move by
angering Oscar. On the other hand, he feared that
all of the good work and progress made by the
directors would die on the vine unless someone
could convince Oscar to come along. Ted scheduled
a time to meet with Oscar and prepared himself for
a difficult conversation. Not wanting to overwhelm
Oscar, Ted focused on three key messages:
1. Trust your team. Let go of the day-to-day, even
if things start to go in the wrong direction.
Avoid the temptation to jump in and do your
people’s jobs.
2. Facilitate, don’t dominate. Continue to use
your style of direct communication to ensure
that the right issues are put on the table, but
then back off more often to allow your team to
add value.
3. Let go and take issues offline when appropri-
ate. Know when to let go of an issue and when
to include fewer people in the discussion.
Especially when you have an issue with a sin-
gle individual—no one likes to get yelled at in
front of others.
Oscar was clearly irritated by the data and he
vented for a few minutes. Ted listened without
interrupting. Eventually, they got back on track
when Oscar asked what to do next. Ted sug-
gested a team-building process to align members
of the executive committee. He described the
process he used with the operating committee
and suggested that the executive committee
could go through a similar process. At this point,
Oscar was still fuming from the feedback but he
asked Ted several detailed questions about how
the process would work, what he’d need to do,
and what outcomes to expect. Ted answered
each question.
Then Oscar asked how much time an off-site
would take. Ted knew he’d be pushing it too far if
he asked for the full three days he thought were
needed. So he proposed two days and Oscar
agreed. Though the feedback session was un-
comfortable for both Oscar and Ted, it ended on
a high note.
DATA FEEDBACK AND INTERVENTION
DESIGN
Ted’s review of the business strategy, organization
design (structures, processes, systems, and con-
trols), engagement surveys, customer surveys,
and exit interviews identified a variety of misfits
that could drive the team building. For example,
even though customers rated Vaycot high in inno-
vation, engagement surveys rated it low. In addi-
tion, bonuses were supposed to be tied to
performance, yet 94% of people got the full target
bonus amount. This didn’t make sense given the
organization’s poor financial performance. Another
misfit was that leadership effectiveness was highly
rated in the engagement survey but it was consis-
tently disclosed in the exit surveys as a reason
people resigned. Ted viewed this as a symptom
of a fear-based culture. As a final step he inter-
viewed the vice presidents again individually and
asked them to rate the following statements, on
a scale of 1 to 5 with 5 being “totally agree”:
• Current roles and accountabilities of all mem-
bers of the team are clear.
• The decision-making process is effective and
appropriate to the task.
• Team members openly speak their mind with
each other.
• The team is effective at resolving conflicts.
• Team meetings are productive.
Ted analyzed and organized the data. The interview
responses were low, ranging between 1.5–2.25; it
was clear that these critical operating factors
needed work.
Ted shared the data and his assessment with
Oscar and the vice presidents. They were not sur-
prised by the low ratings; they had been living in
the system every day and were well aware of its
poor condition. They validated Ted’s assessment
and agreed that they owned the data.
Ted used the data to design a two-day work-
shop. He knew designing a set of activities would
be a challenge. The relationships among the execu-
tive committee members were fragile, and he knew
from experience that this group would not tolerate
a more personal approach. Oscar had famously
288 PART 3 HUMAN PROCESS INTERVENTIONS

referred to highly interpersonal processes as “tou-
chy feely flavor-of-the-month garbage.” As a result,
he decided that the design needed to be task-
oriented and focused on getting things done.
He reviewed the objectives and workshop
agenda with the full executive committee. To
keep the group focused on tasks, much of the
design addressed the team’s data related to work-
ing together to avoid personal grudges and fear
from getting in the way. The executive team
approved the design and expressed optimism
that the off-site would be productive.
WORKSHOP IMPLEMENTATION
The workshop opened with a recap of how the
executive committee got to this point. Ted asked
everyone to tell a short story about their experi-
ence with the process so far. It was a lively
conversation—very positive in tone—and everyone
spoke. Oscar thanked the group for their hard work
and dedication so far in the process. He assured
them that he was going to be an active participant
in the session.
Next, Ted proposed a set of ground rules, such
as “what’s said in the room stays in the room,”
“attack issues not people,” and “don’t speak for
others.” Everyone agreed to abide by them. Ted
reiterated that the objective of the meeting was
to address the team’s ability to get work done.
“The data show that this team has some signifi-
cant interpersonal challenges that need to be
addressed, but these are outside of the scope of
this workshop.” Most participants expressed a
sense of relief and no one objected.
Ted then divided the group into two subgroups
and asked one group to list its hopes for the ses-
sion on a flipchart. The second group was
instructed to list its fears for the session on
another flipchart. Each group presented its list
and the top three hopes and top three fears were
recorded on a new piece of paper and taped to the
wall. Ted’s intention in this exercise was to set a
baseline of how safe the group members were
going to play. This would serve as a point of com-
parison later to see if people became more trusting
and open as the workshop progressed.
The next exercise facilitated the development
of a group purpose statement. Ted asked everyone
to write a sentence that described why they
thought the executive committee existed. Then
each member read their sentence. Most sen-
tences and statements addressed achieving
results, allocating resources, and making strategic
decisions. Only two statements, however, men-
tioned employee or human capital issues, and
Ted commented on that output. The group
debated whether their role involved employees or
not and agreed that there needed to be more con-
sideration given to the workforce. The statement
of purpose eventually evolved to the point where
it included the idea that part of the executive
team’s purpose was to help people understand
how their work contributes to driving the strategy
and assure that recognition and rewards were tied
to contributions.
The rest of the first day was spent working on
the interview data. They discussed the data asso-
ciated with each statement and developed actions
to improve the ratings. The discussions were tense
and strained at first, but they evolved. Initially,
there was a lot of finger pointing and pouting.
Ted facilitated these discussions away from the
interpersonal issues toward a more productive
problem-solving approach based on data and beha-
viors. Over time, the team developed a productive
rhythm. The day ended with the executive commit-
tee agreeing to the following positive statements
and to working on the items required to deliver
those results.
The current roles/accountabilities of all mem-
bers of the team are very clear.
• As a group, we need to work better across
functions, clarify the roles of sales vs. mar-
ket development vs. marketing, and be
more deliberate in setting and communicat-
ing top priorities by function
The decision-making process on this team is
effective and appropriate to the task.
• As a group, we need to take the emotion out
of decision making, create more collaboration
around issues and engage in less unilateral
decision making, and be clearer about our
decision-making process. Who is the decision
maker (e.g., function lead, team, CEO) and
what style of decision making is appropriate
(consensus, majority, unilateral)?
CHAPTER 10 INTERPERSONAL AND GROUP PROCESS APPROACHES 289

Team members are very candid and openly
speak their mind with each other.
• As a group, we need to increase trust, allow
more time for dialogue to develop, and ask
Oscar to play a facilitator role more often
This team is very effective at resolving conflicts.
• As a group, we need to use an objective, fact-
based approach to analyze and resolve issues,
reduce emotion, and decrease the number of
CEO overrides and decreed solutions
Team meetings are very productive.
• As a group, we need to do less venting and
going over the same issues time and time
again, give more respect and credence to
subject-matter experts, and limit atten-
dance to the people who need to be there
The second day started with a brief recap of
Day 1 and a discussion of the hopes and fears
posted on the wall. There was consensus that the
group had “played it safe” and identified hopes and
fears that were shallow and noncontroversial. For
example one of the top three fears was “not getting
enough done.” The conversation that ensued was
animated; executive team members were more at
ease in sharing their deeper hopes and fears.
Oscar was pretty quiet during the exercise
until the end. “It seems like dealing with these
fears would increase performance significantly,
and I have to admit that it appears I am the source
of much of it,” said Oscar. As the conversation
around Oscar’s role expanded, Ted dropped an
activity and introduced the dialogue technique. He
described the importance of suspending assump-
tions, actively listening, asking and reflecting, and
advocating during conversations. The participants
took turns practicing dialogue skills and developed
a deeper understanding of theirs and Oscar’s roles.
After a period of time, Ted decided to look for
common themes and asked, “How did this exercise
go, and what topics were covered?” Everyone
agreed that the hardest part of dialoging was to listen
intently and to not interrupt when another person was
speaking. Common topics included that the functions
needed to better collaborate and support each other,
and that training on conflict resolution and negotiation
would be beneficial. The group agreed they had got-
ten a lot out of the dialogue module.
The next exercise, “give and get,” was
intended to build awareness of interdependencies.
Going around the group two at a time, each pair of
executives took turns saying what he or she spe-
cifically needed from the other person to be more
effective. Then the other person would repeat the
request. Together, they either committed to
actions or said why they could not. The exercise
continued until everyone had gotten/made commit-
ments from/to everyone else. The output of the
exercise neatly summarized and operationalized
the actions listed under the positive statements
of group operation from Day 1.
The agenda then called for the development of
a short list of enterprise projects to move the orga-
nization forward and drive performance. Despite the
progress made so far, there was still some risk that
Oscar would strong arm the project selection pro-
cess. At Ted’s urging, Oscar excluded himself
from the exercise. He didn’t want him to influence
or limit what the vice presidents came up with. Next
Ted asked everyone to come up with a headline to
describe what the team needed to do immediately
to improve organizational effectiveness.
Topping the list was:
• Shared ownership of common goals, and goal
alignment throughout organization
• More collaboration between functions
• Increased employee engagement and
productivity
Ted then asked the team to identify two or
three large-scale change projects to drive sustain-
able high performance. The session concluded
with the executive committee endorsing the fol-
lowing enterprise projects:
• Cascade goals to link every employee’s daily
work to the strategy
• Conduct cross-function “give and get” round-
robins to increase trust and collaboration
• Deploy an enterprise change program to
improve the culture and increase engagement
At the end of Day 2, Ted wrapped up the ses-
sion just as he started it. He asked each participant
to tell a story about their workshop experience.
Again, it was a lively conversation—very positive in
tone—and everyone spoke. Oscar thanked the
group for their commitment and work during the
two days. He told them that they could count on
him to help drive and complete the initiatives that
were selected.
290 PART 3 HUMAN PROCESS INTERVENTIONS

10-4e The Manager’s Role in Team Building
Ultimately, the manager is responsible for team functioning, although this responsibility
obviously must be shared by the group itself. Therefore, it is management’s task to develop
a work group that can regularly analyze and diagnose its own effectiveness and work pro-
cess. With the team’s involvement, the manager must diagnose the group’s effectiveness
and take appropriate actions if it shows signs of operating difficulty or stress.
Boss and McConkie surveyed over 3,500 team-building participants and found that
92% identified the team’s leader as the single most important role in successful team
building.33 Many managers, however, have not been trained to perform the data gather-
ing, diagnosis, planning, and action necessary to maintain and improve their teams con-
tinually. Thus, the issue of who should lead a team-building session is a function of
managerial capability. The initial use of an OD consultant usually is advisable if a man-
ager is aware of problems, feels that he or she may be part of the problem, and believes
that some positive action is needed to improve the operation of the team, but is not sure
how to go about it.34
After Oscar left to go to another meeting, the
vice presidents lingered to discuss the events of
the past two days. They felt relieved and optimistic
that things, and most importantly Oscar, would be
different going forward. Ted believed that the
group was grateful for the outcomes, committed
to implementing the initiatives, and thoroughly
exhausted. All signs of a good two days’ work by
a team of executives that stepped up and changed
its mindset and behaviors to commit to making sig-
nificant changes in how the business would be run
in the future.
RESULTS AND REFLECTION
Following the workshop, teams were formed and
chartered, and work began immediately on the
three enterprise projects. The executive commit-
tee asked Ted to work with them throughout
the year and to design and facilitate structured
workshops every six months. Gradually, the oper-
ating committee, then the managers, and then
the rest of the workforce felt the positive impacts
of the executive committee’s increased team
effectiveness.
Three years later, the numbers told the story
of Vaycot’s turn around:
• Beat sales and earnings targets five quarters in
a row, and year-to-year sales were up 9%
• Engagement index was up 21 points
• Turnover was in line with industry averages
Being a realist, Ted knew that Oscar had not
undergone an overall personal transformation—he
was still basically the same guy. Oscar’s few key
behavior changes were mostly motivated by the
realization that he could get a lot more perfor-
mance out of his team, and the whole organization,
if he changed the way he led. In the end, Oscar
became a better leader and, in part, that led to an
organizational transformation.
Looking back, Ted would have preferred work-
ing with the executive committee first and then the
operating committee. However, based on his orga-
nizational knowledge and his relationships with sta-
keholders, he had decided that there was no harm
to be done by building cohesion and momentum
with the directors. He had trusting relationships
built up through coaching, the subgroup of direc-
tors was less encumbered by the fear that held
back the vice presidents, and the directors were
closer to the workforce and customers and were
in a better position to impact the business. Oscar
would have surely shut things down before any
progress had been made if they started with the
executive committee.
The whole experience reminded Ted of his
mentor’s advice. “Follow the energy and start where
the client is, not where you want them to be.”
CHAPTER 10 INTERPERSONAL AND GROUP PROCESS APPROACHES 291

Basically, the role of the OD consultant is to work closely with the manager (and
members of the team) to a point at which the manager is capable of engaging in team
development activities as a regular and ongoing part of overall managerial responsibili-
ties. Assuming that the manager wants and needs a consultant, the two should work
together in developing the initial program, keeping in mind that (1) the manager ulti-
mately is responsible for all team-building activities, even though the consultant’s
resources are available; and (2) the goal of the consultant’s presence is to help the man-
ager learn to continue team development processes with minimum consultant help or
without the ongoing help of the consultant.
Thus, in the first stages, the consultant might be much more active in data gather-
ing, diagnosis, and action planning, particularly if a one- to three-day off-site workshop
is considered. In later stages, the consultant takes a much less active role, with the
manager becoming more active and serving as both manager and team developer.
10-4f The Results of Team Building
The early research on team building’s effectiveness produced inconsistent, but generally
positive, results. Several studies reported positive results across a range of variables
including feelings, attitudes, and measures of performance.35 Other studies produced
less positive outcomes.36
Less powerful research designs, short time frames, and the confounding impact of
other interventions occurring in conjunction with team building were the most important
explanation for the lack of consistent results.37 For example, one review of 30 studies found
that only ten tried to measure changes in performance. Buller and Bell attempted to differ-
entiate the effects of team building from the effects of other interventions that occur along
with team building.38 Specifically, they tried to separate the effects of team building from
the effects of goal setting, an intervention aimed at setting realistic performance goals and
developing action plans for achieving them. In a rigorous field experiment, Buller and Bell
examined the differential effects of team building and goal setting on productivity measures
of underground miners. Their results showed that team building affected the quality of per-
formance and goal setting affected the quantity of performance. This differential impact was
explained in terms of the nature of the mining task. The task of improving the quality of
performance was more complex, unstructured, and interdependent than was the task of
achieving quantity. This suggests that team building can improve group performance, par-
ticularly on tasks that are complex, unstructured, and interdependent.
More recently, a 2009 meta-analysis of 20 studies representing 579 teams found positive
and moderate overall effect sizes; there was a significant tendency for team building to posi-
tively influence team outcomes.39 Four team-building activities—goal setting, interpersonal
relations, problem solving, and role clarification—and four team outcomes—cognitive,
affective, process, and performance—were examined more closely. Goal-setting and role
clarification interventions were the most powerful, while affective and process outcomes
registered the largest improvements.
Team building, like OD at the organization level, is a process over time, and OD
practitioners need to be aware of the full range of reasons teams are effective. Research
by Hackman and his colleagues have suggested that too much time may be spent trying
to help teams that were designed and launched incorrectly. They argue that one of the
most important tasks of the OD practitioner is to be sure that any team gets chartered
and started correctly.40 In a related study where the teams’ launching was held
292 PART 3 HUMAN PROCESS INTERVENTIONS

constant, Woolley found that task-focused (as opposed to process-focused) interven-
tions given at the midpoint of a team’s lifecycle had the biggest impact on team
performance.41
The results of team building in virtual teams is still emerging, but shows that many
of the lessons learned from face-to-face team-building practice can be transferred. For
example, one lab study found that when communications technologies were augmented
to include goal-setting processes, team functioning and team performance improved42
while another lab study of Chinese undergraduates found that a dialogue intervention
intended to improve shared mental models among team members was as effective in
face-to-face teams as it was in video-conferenced teams.43 Because virtual teams are
usually geographically dispersed, they can also take advantage of a variety of asychnro-
nous facilitation tools, such as wikis, shared portals, or other groupware.44 Hart and
Mcleod found that interpersonal closeness between members of a virtual team is cre-
ated when one member proactively helps another member to solve a problem or
address a concern, and that the closeness is maintained by frequent, short, but
content-oriented (as opposed to process-oriented) messages.45 Gibson and Cohen
found that team performance was enhanced by initial face-to-face team-building meet-
ings in the start-up stage of a team’s work.46
Finally, Boss has presented considerable evidence to support the effectiveness of per-
sonal management interviews (PMIs) in sustaining the long-term effects of off-site team
building.47 A PMI is a follow-up intervention that arrests the potential fade-out effects of
off-site team building.48 A team leader negotiates roles with each member and then holds
regular meetings with each team member to resolve problems and increase personal
accountability. Boss and his colleagues have amassed a large, longitudinal data set,
mostly in public administration, hospital, and health care settings. When team-building
interventions have included PMI activities (compared to those that have not included
PMI follow-ups), they have found consistent and sustained improvement in measures
of team functioning and operational performance.
SUMMARY
In this chapter, we presented human process interven-
tions aimed at interpersonal relations and group
dynamics. Among the earliest interventions in OD,
these change programs help people gain interpersonal
competence, work through interpersonal conflicts, and
develop effective groups.
Process consultation is used not only as a way of
helping groups become effective but also as a means
whereby groups learn to diagnose and solve their own
problems and continue to develop their competence
and maturity. Important areas of activity include
communications, roles of group members, difficulties
with problem-solving and decision-making norms,
and leadership and authority. The basic difference
between process consultation and third-party inter-
vention is that the latter focuses on interpersonal
dysfunctions in social relationships between two or
more individuals within the same organization and
is targeted toward resolving direct conflict between
those individuals.
Team building is directed toward improving group
effectiveness and the ways in which members of teams
work together. Teams may be permanent or temporary
or traditional or virtual, but their members have either
common organizational aims or work activities.
The general process of team building, like process
consultation, tries to equip a team to handle its own
ongoing problem solving.
CHAPTER 10 INTERPERSONAL AND GROUP PROCESS APPROACHES 293

NOTES
1. M. Marks, J. Mathieu, and S. Zaccaro, “A Temporally
Based Framework and Taxonomy of Team Processes,”
Academy of Management Review 26 (2001): 356–78.
2. J. Fast, Body Language (Philadelphia: Lippincott, M. Evans,
1970).
3. D. Levi, Group Dynamics for Teams (Thousand Oaks,
CA: Sage Publications, 2011); N. Clapp, “Work Group
Norms: Leverage for Organizational Change, Theory
and Application” (undated working paper, Block Petrella
Weisbord, Plainfield, NJ); R. Allen and S. Pilnick,
“Confronting the Shadow Organization: How to Detect
and Defeat Negative Norms,” Organizational Dynamics
(Spring 1973): 3–18.
4. E. Schein, Process Consultation Volume II: Lessons for
Managers and Consultants (Reading, MA: Addison-
Wesley, 1987).
5. E. Schein, Process Consultation Revisited (Reading, MA:
Addison-Wesley, 1998), 20.
6. Schein, Process Consultation Volume II, 5–17.
7. Schein, Process Consultation Revisited.
8. Schein, Process Consultation Revisited, 147.
9. J. Luft, “The Johari Window,” Human Relations Training
News 5 (1961): 6–7.
10. C. Seashore, E. Seashore, and G. Weinberg, What Did
You Say? The Art of Giving and Receiving Feedback
(Columbia, MD: Bingham House Books, 2001).
11. J. Gibb, “Defensive Communication,” Journal of Commu-
nication 11 (1961): 141–48; Schein, Process Consultation
Revisited; Seashore, Seashore, and Weinberg, What Did
You Say?
12. E. Schein, Process Consultation: Its Role in Organization
Development (Reading, MA: Addison-Wesley, 1969), 44.
13. This application was authored and submitted by Charles
Hathorn, Principal, Hathorn.org, and his contribution is
gratefully acknowledged.
14. R. Kaplan, “The Conspicuous Absence of Evidence That
Process Consultation Enhances Task Performance,”
Journal of Applied Behavioral Science 15 (1979): 346–60.
15. G. Lippitt, Organizational Renewal (New York: Appleton-
Century-Crofts, 1969); C. Argyris, Organization and
Innovation (Homewood, IL: Richard D. Irwin, 1965).
16. D. Tjosvold, “Defining Conflict and Making Choices
About Its Management,” International Journal of Conflict
Management 17 (2006): 87–95.
17. C. K. DeDreu and L. Weingart, “Task versus Relationship
Conflict, Team Performance, and Team Member Satisfac-
tion: A Meta-analysis,” Journal of Applied Psychology 88
(2003): 741–49.
18. People interested in finding assistance might want to
contact the Society of Professionals in Dispute Resolution
(SPIDR) at http://www.acrnet.org, or the Straus Institute
of Dispute Resolution at http://law.pepperdine.edu/straus.
19. D. Kolb and Associates, When Talk Works: Profiles of
Mediators (San Francisco: Jossey-Bass, 1994); R. Saner
and L. Yiu, “External Stakeholder Impacts on Third-
Party Interventions in Resolving Malignant Conflicts:
The Case of a Failed Third-Party Intervention in
Cyprus,” International Negotiation 6 (2001): 387–416.
20. H. Prein, “Strategies for Third-Party Intervention,” Human
Relations 40 (1987): 699–720; P. Nugent, “Managing
Conflict: Third-Party Interventions for Managers,”
Academy of Management Executive 16 (2002): 139–54.
21. R. Walton, Managing Conflict: Interpersonal Dialogue
and Third-Party Roles, 2nd ed. (Reading, MA: Addison-
Wesley, 1987); Nugent, “Managing Conflict.”
22. Walton, Managing Conflict, 83–110.
23. This application was developed by John Childers,
President, Childers and Partners LLC. His contribution
is gratefully acknowledged.
24. W. Dyer, W. Dyer, and J. Dyer, Team Building, 4th ed.
(San Francisco: Jossey-Bass, 2007).
25. T. Patten, Organizational Development Through Team
Building (New York: John Wiley & Sons, 1981), 2;
D. Stepchuck, “Strategies for Improving the Effectiveness
of Geographically Distributed Work Teams” (unpublished
master’s thesis, Pepperdine University, 1994).
26. C. Gibson and S. Cohen, eds., Virtual Teams That Work:
Creating Conditions for Virtual Team Effectiveness (San
Francisco: Jossey-Bass, 2003); R. Hart and P. Mcleod,
“Rethinking Team Building in Geographically Dispersed
Teams,” Organizational Dynamics 31 (2003): 352–61;
W. Huang, K Wei, R. Watson, and B. Tan, “Supporting
Virtual Team-building with a GSS: An Empirical Investi-
gation,” Decision Support Systems 34 (2002): 359–67;
D. Mancini, “Building Organizational Trust in Virtual
Teams,” Journal of Behavioral Studies in Business
2 (May 2010): 1–15; R. Lepsinger and D. DeRosa, Virtual
Team Success (San Francisco: Pfeiffer, 2011).
27. W. Dyer, Team Building: Issues and Alternatives, 2nd ed.
(Reading, MA: Addison-Wesley, 1987).
28. J. Katzenbach and D. Smith, The Wisdom of Teams
(Boston: Harvard Business School Press, 1993).
29. J. Hackman, “The Design of Work Teams,” in The
Handbook of Organizational Behavior, ed. J. Lorsch
(Englewood Cliffs, NJ: Prentice Hall, 1987): 315–42.
30. Dyer, Team Building; Katzenbach and Smith, Wisdom of
Teams; C. Torres, D. Fairbanks, and R. Roe, eds.,
294 PART 3 HUMAN PROCESS INTERVENTIONS

Teambuilding: The ASTD Trainer’s Sourcebook (New
York: McGraw-Hill, 1996); L. Offermann and R. Spiros,
“The Science and Practice of Team Development:
Improving the Link,” Academy of Management Journal
44 (2001): 376–93; P. Lencioni, Overcoming the Five Dys-
functions of a Team (San Francisco: Jossey-Bass, 2005).
31. This application was developed by David Jardin. His con-
tribution is gratefully acknowledged.
32. D. Ancona and D. Caldwell, “Bridging the Boundary:
External Activity and Performance in Organizational
Teams,” Administrative Science Quarterly 37 (1992):
634–65; S. Cohen, “Designing Effective Self-Managing
Work Teams” (paper presented at the Theory Sympo-
sium on Self-Managed Work Teams, Denton, TX,
June 4–5, 1993).
33. R. W. Boss and M. McConkie, “Team Building” in Hand-
book of Organization Development, ed. T. Cummings
(Thousand Oaks, CA: Sage Publications, 2007).
34. Dyer, Team Building.
35. K. De Meuse and S. Liebowitz, “An Empirical Analysis of
Team-building Research,” Group & Organizational Studies
6 (1981): 357–78; S. Tannenbaum, R. Beard, and E. Salas,
“Team Building and Its Influence on Team Effectiveness:
An Examination of Conceptual and Empirical Develop-
ments,” in Issues, Theory, and Research in Industrial/
Organizational Psychology, ed. K. Kelley (Amsterdam:
Elsevier, 1992); G. Neuman, J. Edwards, and N. Raju, “Orga-
nizational Development Interventions: A Meta-Analysis of
Their Effects on Satisfaction and Other Attitudes,” Personnel
Psychology 42 (1989): 461–89; R. Guzzo and M. Dickson,
“Teams in Organizations: Recent Research on Performance
and Effectiveness,” in Annual Review of Psychology, vol. 47,
ed. J. Spence, J. Darley, and J. Foss (Palo Alto, CA: Annual
Reviews, 1996): 307–38; J. Porras and P. O. Berg, “The
Impact of Organization Development,” Academy of
Management Review 3 (April 1978): 249–66; J. Nicholas,
“The Comparative Impact of Organization Development
Interventions on Hard Criteria Measures,” Academy of
Management Review 7 (October 1982): 531–42.
36. D. Eden, “Team Development: A True Field Experiment
at Three Levels of Rigor,” Journal of Applied Psychology
70 (1985): 94–100.
37. De Meuse and Liebowitz, “An Empirical Analysis of Team-
building Research”; R. Woodman and J. Sherwood, “The
Role of Team Development in Organizational Effectiveness:
A Critical Review,” Psychological Bulletin 88 (July–Nov.
1980); Eden, “Team Development.”
38. R. Buller and C. Bell Jr., “Effects of Team Building and
Goal Setting: A Field Experiment,” Academy of Manage-
ment Journal 29 (1986): 305–28.
39. C. Klein, D. DiazGranados, E. Salas, H. Le, C. Burke,
R. Lyons, and G. Goodwin, “Does Team Building
Work?” Small Group Research 40 (2009): 181–222.
40. Hackman, “The Design of Work Teams”; R. Hackman
and R. Wageman, “A Theory of Team Coaching,”
Academy of Management Review 30 (2005): 269–87.
41. A. Woolley, “Effects of Intervention Content and Timing
on Group Task Performance,” Journal of Applied
Behavioral Science 34 (1998): 30–46.
42. Huang, Wei, Watson, and Tan, “Supporting Virtual
Team-building with a GSS.”
43. Z. Guo, J. D’Ambra, T. Turner, and H. Zhang, “Improv-
ing the Effectiveness of Virtual Teams: A Comparison of
Video-Conferencing and Face-to-Face Communication
in China,” IEEE Transaction on Professional Communica-
tion 52 (March 2009): 1–16.
44. N. Rangarajan and J. Rohrbaugh, “Multiple Roles of
Online Facilitation: An Example in Any-Time, Any-
Place Meetings,” Group Facilitation 5 (2003): 26–36.
45. Hart and Mcleod, “Rethinking Team Building in
Geographically Dispersed Teams.”
46. C. Gibson and S. Cohen, eds., Virtual Teams That Work:
Creating Conditions for Virtual Team Effectiveness (San
Francisco: Jossey-Bass, 2003).
47. R. W. Boss, “Team Building and the Problem of Regres-
sion: The Personal Management Interview as an Inter-
vention,” Journal of Applied Behavioral Science 19
(1983): 67–83; R. Boss and M. McConkie, “Creating
High Performance Work Teams: Team Building Results
from 3,679 Participants,” paper presented at the Eleventh
International Conference on Advances in Management,
Orlando, FL, March 2004.
48. Ibid.
CHAPTER 10 INTERPERSONAL AND GROUP PROCESS APPROACHES 295

©
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11
Organization Process Approaches
learning
objectives
Understand the diagnostic issues associated with organization-wide
process interventions.
Demonstrate the organization confrontation meeting.
Compare the intergroup relations interventions of microcosm groups
and intergroup conflict.
Describe and evaluate the effectiveness of large-group interventions.
I
n Chapter 10, we presented interventions
aimed at improving interpersonal and group pro-
cesses. This chapter describes system-wide
process interventions—change programs directed
at increasing the effectiveness of organizational
problem solving, visioning and strategy making,
and collaboration—for a major subsystem or for
an entire organization.
The first type of intervention, the organization
confrontation meeting, is among the earliest
organization-wide process approaches developed by
organization development (OD) practitioners. It helps
mobilize the problem-solving resources of a major
subsystem or whole organization by encouraging
members to identify and confront pressing issues.
The second organization process approach is
called intergroup relations. It consists of two
interventions: microcosm groups and the intergroup
conflict resolution meeting. Both interventions are
aimed at diagnosing and addressing important
organization-level processes, such as conflict, the
coordination of organizational units, and innovation.
The intergroup conflict intervention is specifically
oriented toward conflict processes, whereas the
microcosm group is a more generic system-wide
change strategy.
The third and final system-wide process
approach, the large group intervention, has received
considerable attention recently and is one of the
fastest-growing areas in OD. Large group
interventions get a “whole system into the room”1
and create processes that allow a variety of
stakeholders to interact simultaneously. A large
group intervention can be used to articulate a new
organization vision, develop a new strategy, solve
cross-functional problems, develop a change
strategy, or redesign work, structures, and systems.
It is a powerful tool for addressing organizational
problems and opportunities and for accelerating the
pace of organizational change.
297

11-1 Diagnostic Issues in Organization Process
Interventions
Organization process approaches are driven by diagnostic data collected at the organiza-
tion level. In particular, these interventions address issues, problems, and opportunities
that occur between or among groups as they try to implement the organization’s strat-
egy. The key contextual inputs to the diagnosis are the organization’s environment, in
terms of information uncertainty, complexity, resource dependency, and industry struc-
ture. The need for organization process interventions often has its genesis in some envi-
ronmental change. For example, if there is considerable environmental uncertainty
arising from the defection of a number of customers to competitors or, in a nonprofit
case, if funding has become more difficult to come by, organization process interventions
could be used to understand why these problems are occurring and how to address
them. Effective OD practitioners closely watch the organization’s external environment
for change pressures.
With respect to the design components of strategy, structure, technology, manage-
ment systems, and human resource systems, organization process approaches can be
driven by diagnostic data from any of these issues. A broad and aggressive strategy may
put pressure on scarce resources, such as specialized talent or specific organization units,
or there may be unanticipated problems in establishing key product or service differen-
tiators. These issues could be handled by organization process interventions. Alterna-
tively, diagnostic data may suggest considerable inefficiency with respect to productivity
in the organization (technology design component) as compared to benchmark organiza-
tions in the industry. An organization confrontation meeting might be convened to gen-
erate new work process innovations or a large group intervention might be designed to
involve union leaders, technology vendors, front-line employees, and managers to diag-
nose current value-added processes and recommend changes. Increasingly, as organiza-
tions see themselves as whole systems, these interventions are being used to address all of
these diagnostic categories in broad organization design solutions.
In sum, good OD practitioners link the use of organization process interventions
to sound diagnostic data. OD practitioners should be able to clearly articulate a sound
business case as to how the environmental pressures or organization design features
constraining current effectiveness will be addressed by these interventions.
11-2 Organization Confrontation Meeting
The confrontation meeting is an intervention designed to mobilize the resources of the
entire organization to identify problems, to set priorities and action targets, and to
begin working on identified problems. Originally developed by Beckhard,2 the interven-
tion can be used at any time but is particularly useful when the organization is under
stress and when there is a gap between the top and the rest of the organization (such
as when a new top manager joins the organization). General Electric’s “Work-Out” pro-
gram is an example of how the confrontation meeting has been adapted to fit today’s
organizations.3 Although the original model involved only managerial and professional
people, it has since been used successfully with technicians, clerical personnel, and
assembly workers. It has also been applied in a variety of domestic and international set-
tings. The process as described helps organizations, even those with conflict avoidance or
uncertainty-avoidance values, to address relevant organizational concerns.
298 PART 3 HUMAN PROCESS INTERVENTIONS

11-2a Application Stages
When the diagnosis of the system’s current situation suggests that the organization is
facing several unprioritized problems that will require broad coordination, the organiza-
tion confrontation meeting typically involves the following steps:
1. A group meeting of all those involved is scheduled and held in an appropriate place.
Usually the task is to identify problems related to the work environment and the
effectiveness of the organization.
2. Groups are appointed representing all departments of the organization. Thus, each
group might have one or more members from sales, purchasing, finance, operations,
and quality assurance. For obvious reasons, a subordinate should not be in the same
group as his or her boss, and top management should form its own group. Group
size can vary from 5 to 15 members, depending on such factors as the size of the
organization and available meeting places.
3. The point is stressed that the groups are to be open and honest and to work hard
at identifying problems they see in the organization. No one will be criticized
for bringing up problems and, in fact, the groups will be judged on their ability
to do so.
4. The groups are given an hour or two to identify organization problems. Generally,
an OD practitioner goes from group to group, encouraging openness and assisting
the groups with their tasks.
5. The groups then reconvene in a central meeting place. Each group reports the pro-
blems it has identified and sometimes offers solutions. Because each group hears the
reports of all the others, a maximum amount of information is shared.
6. At this point, a master list of problems is created and then broken down into cate-
gories. This can be done by the participants, by the person leading the session, or by
the manager and his or her staff. It can also be done at the end of a day with the
group reconvening at another time, although it is important to maintain momen-
tum. This process eliminates duplication and overlap and allows the problems to
be separated according to functional or other appropriate areas.
7. Following problem categorization, participants are divided into problem-solving
groups whose composition may, and usually does, differ from that of the original
problem-identification groups. For example, all operations problems may be handled
by people in that subunit. Or task forces representing appropriate cross sections of
the organization may be formed.
8. Each group ranks the problems, develops a tactical action plan, and determines an
appropriate timetable for completing this phase of the process.
9. Each group then periodically reports its list of priorities and tactical plans of action
to management or to the larger group.
10. Schedules for periodic (frequently monthly) follow-up meetings are established
and project management resources may be necessary to monitor and support
progress. At these sessions, the team leaders report either to top management, to
the other team leaders, or to the group as a whole regarding their team’s progress
and plans for future action. The formal establishment of such follow-up meetings
ensures both continuing action and the modification of priorities and timetables
as needed.
Application 11.1 presents the Work-Out process at General Electric Medical Systems
business. It shows how the basic framework of a confrontation meeting can be adapted
to address organizational problems, such as productivity and employee involvement.4
CHAPTER 11 ORGANIZATION PROCESS APPROACHES 299

a
p
p
lica
tio
n
1
1
1
A WORK-OUT MEETING AT GENERAL ELECTRIC MEDICAL
SYSTEMS BUSINESS
A
s part of the large-scale change effort, for-
mer CEO Jack Welch and several man-
agers at General Electric devised a
method for involving many organization
members in the change process. Work-Out is
a process for gathering the relevant people to
discuss important issues and develop a clear
action plan. The program has four goals: to use
employees’ knowledge and energy to improve
work, to eliminate unnecessary work, to build
trust through a process that allows and
encourages employees to speak out without
being fearful, and to engage in the construction
of an organization that is ready to deal with the
future.
At GE Medical Systems (GEMS), internal
consultants conducted extensive interviews
with managers throughout the organization.
The interviews revealed considerable dissatis-
faction with existing systems, including perfor-
mance management (too many measurement
processes, not enough focus on customers,
unfair reward systems, and unrealistic goals),
career development, and organizational cli-
mate. Managers were quoted as saying that
I’m frustrated. I simply can’t do the quality
of work that I want to do and know how to
do. I feel my hands are tied. I have no time.
I need help on how to delegate and oper-
ate in this new culture.
The goal of downsizing and delayering
is correct. The execution stinks. The con-
cept is to drop a lot of “less important”
work. This just didn’t happen. We still
have to know all the details, still have to
follow all the old policies and systems.
In addition to the interviews, Jack Welch
spent some time at GEMS headquarters listen-
ing to and trying to understand the issues fac-
ing the organization.
Based on the information compiled, about
50 GEMS employees and managers gathered
for a five-day Work-Out session. The partici-
pants included the group executive who over-
saw the GEMS business, his staff, employee
relations managers, and informal leaders from
the key functional areas who were thought to
be risk takers and who would challenge the
status quo. Most of the work during the
week was spent unravelling, evaluating, and
reconsidering the structures and processes
that governed work at GEMS. Teams of man-
agers and employees addressed business
problems. Functional groups developed visions
of where their operations were headed. An
important part of the teams’ work was to
engage in “bureaucracy busting” by identifying
CRAP (Critical Review APpraisals) in the orga-
nization. Groups were asked to list needless
approvals, policies, meetings, and reports that
stifled productivity. In an effort to increase the
intensity of the work and to encourage free
thinking, senior managers were not a part of
these discussions.
At the end of the week, the senior man-
agement team listened to the concerns, propo-
sals, and action plans from the different teams.
During the presentations, senior GEMS man-
agers worked hard to understand the issues,
communicate with the organization members,
and build trust by sharing information and dis-
cussing constraints and opportunities. Most of
the proposals focused on ways to reorganize
work and improve returns to the organization.
According to traditional Work-Out methods,
managers must make instant, on-the-spot
decisions about each idea in front of the
whole group. The three decision choices are
(1) approval; (2) rejection with clear reasons;
and (3) need more data, with a decision to be
made within a month.
The five-day GEMS session ended with
individuals and functional teams signing close
to a hundred written contracts to implement
the new processes and procedures or drop
unnecessary work. The contracts were
between people, between functional groups,
and between levels of management. Other
organizational contracts affected all GEMS
members. One important outcome of the
Work-Out effort at GEMS was a decision to
300 PART 3 HUMAN PROCESS INTERVENTIONS

11-2b Results of Confrontation Meetings
Because organization confrontation meetings often are combined with other approaches,
such as survey feedback, determining specific results is difficult. In many cases, the
results appear dramatic in mobilizing the total resources of the organization for problem
identification and solution. Beckhard cites a number of specific examples in such differ-
ent organizations as a food products manufacturer, a military products manufacturer,
and a hotel.5 Positive results also were found in a confrontation meeting with 40 profes-
sionals in a research and development firm.6
The organization confrontation meeting is a classic and robust approach for mobi-
lizing organizational problem solving, especially in times of low performance. Although
the results of its use appear impressive, little systematic study of this intervention has
been done. For example, although a variety of anecdotal descriptions exist, there has
been no published large-sample evaluation of the Work-Out process. There is a clear
need for evaluative research.
11-3 Intergroup Relations Interventions
The ability to diagnose and understand intergroup relations is important for OD practi-
tioners because (1) groups often must work with and through other groups to accom-
plish their goals; (2) groups within the organization often create problems and place
demands on each other; and (3) the quality of the relationships between groups can
affect the degree of organizational effectiveness. Two OD interventions—microcosm
groups and intergroup conflict resolution—are described here. A microcosm group uses
members from several groups to help solve organization-wide problems. Intergroup
issues are explored in this context, and then solutions are implemented in the larger
organization. Intergroup conflict resolution helps two groups work out dysfunctional
relationships. Together, these approaches help improve intergroup processes and lead to
organizational effectiveness.
11-3a Microcosm Groups
A microcosm group consists of a small number of individuals who are chosen to reflect
and represent the issue being addressed.7 For example, a medium-sized investment firm
whose reputation was damaged during the economic crisis was interested in learning
about how the firm’s culture may have been a factor. A microcosm group composed of
members representing different functions and levels in the organizations was created,
involve suppliers in its internal email network.
Through that interaction, GEMS and a key supplier
eventually agreed to build new-product prototypes
together, and their joint efforts have led to further
identification of ways to reduce costs, improve
design quality, or decrease cycle times.
Work-Out at GE has been very successful but
hard to measure in dollar terms. Since 1988,
hundreds of Work-Outs have been held, and the
concept has continued to evolve into best-
practice investigations, process mapping, and
change-acceleration programs. The Work-Out pro-
cess, however, clearly is based on the confronta-
tion meeting model, where a large group of people
gather to identify issues and plan actions to
address problems.
CHAPTER 11 ORGANIZATION PROCESS APPROACHES 301

and the group was tasked with diagnosing the organization’s values-in-use and the orga-
nization design features that might have contributed to the firm’s behavior. In addition
to addressing organization design and culture problems, microcosm groups have been
used to solve communications problems, facilitate merger integration, explore diversity
issues, smooth the transition to a new structure, and address dysfunctional political
processes.
Microcosm groups work through “parallel processes,” which are the unconscious
changes that take place in individuals when two or more groups interact.8 After mem-
bers from different groups interact, they often find that the role and interaction pat-
terns in their group begin to reflect the roles and dynamics of the larger system they
came from. Put simply, groups seem to “infect” and become “infected” by the other
groups. The following example given by Alderfer9 helps to clarify how parallel processes
work:
An organizational diagnosis team had assigned its members to each of five depart-
ments in a small manufacturing company. Members of the team had interviewed
each department head and several department members, and had observed depart-
ment meetings. The team was preparing to observe their first meeting of department
heads and were trying to anticipate the group’s behavior. At first they seemed to
have no “rational” basis for predicting the top group’s behavior because they “had
no data” from direct observation. They decided to role-play the group meeting they
had never seen. Diagnostic team members behaved as they thought the department
heads would, and the result was uncanny. Team members found that they easily
became engaged with one another in the simulated department-head meeting; emo-
tional involvement occurred quickly for all participants. When the team actually was
able to observe a department-head meeting, they were amazed at how closely the
simulated meeting had approximated the actual session.
In another example, one of the key diagnostic findings from a culture survey at
Cambia Health Solutions in Portland, OR, was the ineffectiveness of cross-functional
work processes and decision making. As part of the intervention to increase the organi-
zation’s agility, cross-functional project teams were set up to design and recommend
change processes for four different systems. The cross-functional teams began to display
all the dysfunctions of the larger organization, and so helping the teams to work cross-
functionally helped to create change processes for the larger organization. The “parallel
processes” idea suggests that if a small and representative group can intimately under-
stand and solve a complex organizational problem for themselves, they are in a good
position to recommend action to address the problem in the larger system.
This example also suggests that organizations use microcosm groups frequently as
design teams, task forces, or temporary project teams. However, these groups often are
not identified as such and cannot take advantage of the knowledge about parallel pro-
cesses that could make them more effective.
Application Stages The process of using a microcosm group to address organization-
wide issues involves the following five steps:
1. Identify an issue. This step involves finding a system-wide problem to be addressed.
This may result from an organizational diagnosis or may be an idea generated by an
organization member or task force. For example, one microcosm group charged
with improving organizational communications was started by a division manager.
He was concerned that the information provided by those reporting directly to him
302 PART 3 HUMAN PROCESS INTERVENTIONS

differed from the data he received from informal conversations with people through-
out the division.
2. Convene the group. Once an issue is identified, the microcosm group can be
formed. The most important convening principle is that group membership needs
to reflect the appropriate mix of stakeholders related to the issue. If the issue is orga-
nizational diversity, then the group should reflect the issue in terms of race, gender,
age, disability, sexual orientation, culture, or other dimension. If the issue is integrat-
ing two corporate cultures following a merger, the microcosm group should contain
people from both organizations who understand their respective cultures. Building a
microcosm group with the right people can be a challenge in worldwide organiza-
tions where the problem’s scope crosses business unit or country boundaries. A vir-
tual microcosm team may need to be formed, and their work may need to be
facilitated through computer-mediated communication technologies, such as tele-
conferencing. Following the initial setup, the group itself becomes responsible for
determining its membership. It will decide whether to add new members and how
to fill vacant positions.
Convening the group also draws attention to the issue and gives the group sta-
tus. Members need to be perceived as credible representatives of the problem. This
will increase the likelihood that organization members will listen to and follow the
suggestions they make.
3. Provide group training. Once the microcosm group is established, training is pro-
vided in group problem solving and decision making. Team-building interventions
also may be appropriate. Group training focuses on establishing a group mission or
charter, working relationships among members, group decision-making norms, and
definitions of the problem to be addressed.
From a group process perspective, OD practitioners may need to observe and
comment on how the group develops. Because the group is a microcosm of the
organization, it will tend, through its own behavior and attitudes, to reflect the prob-
lem in the larger organization. For example, if the group is addressing diversity
issues in the organization, it is likely to manifest the particular dynamics that raised
the issues in the first place. That is, the group may exhibit difficulty communicating
across cultures or decision making may exclude or downplay certain group’s inputs.
Recognizing, within the group, the problem or issue it was formed to address is the
first step toward solving the problem in the larger system.
4. Address the issue. This step involves solving the problem and implementing solu-
tions. OD practitioners may help the group diagnose, design, implement, and evaluate
changes. A key issue is gaining commitment in the wider organization to implement-
ing the group’s solutions. Several factors can facilitate such ownership. First, a com-
munication plan should link group activities to the organization. This may include
publishing minutes from team meetings; inviting organization members, such as mid-
dle managers, union representatives, or hourly workers, into the meetings; and making
presentations to different organizational groups. Second, group members need to be
visible and accessible to management and labor. This can ensure that the appropriate
support and resources are developed for the recommendations. Third, problem-
solving processes should include an appropriate level of participation by organization
members. Different data collection methods can be used to gain member input and to
produce ownership of the problem and solutions.
5. Dissolve the group. The microcosm group can be disbanded following successful
implementation of changes. This typically involves writing a final report or holding
a final meeting.
CHAPTER 11 ORGANIZATION PROCESS APPROACHES 303

Results of Microcosm Groups The microcosm group intervention derives from an
intergroup relations theory developed by Alderfer, who has applied it to communica-
tions and race-relations problems. A microcosm group that addressed communica-
tions issues improved the way meetings were conducted; developed a job posting,
career development, and promotion program; and conducted new-employee orienta-
tions.10 In addition, the group assisted in the development, administration, and feed-
back of an organization-wide employee opinion survey. Alderfer also reported seven
years of longitudinal data on a race-relations advisory group in a large organization.11
Over time, white members showed significant improvements in their race-relations percep-
tions; African Americans consistently perceived more evidence of racism in the organiza-
tion; and attendance at the meetings varied both over time and by race. In addition to the
intragroup data, the case documented several changes in the organization, including the
development of a race-relations competency document, the implementation of a race-
relations workshop, and the creation of an upward-mobility policy.
The dearth of research on microcosm groups reflects how difficult it is to measure
parallel processes and associate them with measures of organizational processes. Given
their prevalence in organizations, however, more research on this intervention would be
welcome.
11-3b Resolving Intergroup Conflict
Unlike the interpersonal conflict interventions discussed in Chapter 10, the intergroup
conflict intervention is designed specifically to help two groups or departments within
an organization resolve dysfunctional conflicts. Intergroup conflict is neither good nor
bad in itself, and in some cases, conflict among departments is necessary and productive
for organizations.12 This applies where there is little interdependence among depart-
ments and conflict or competition among them can spur higher levels of productivity.
For example, organizations structured around different product lines might want to pro-
mote competition among the product groups. This might increase each group’s produc-
tivity and add to the overall effectiveness of the firm.
In other organizations, especially those with highly interdependent departments,
conflict may become dysfunctional.13 Two or more groups may grow polarized, and
their continued conflict may result in the development of defensiveness and negative
stereotypes of the other group. Polarization can be revealed in such statements as:
“Any solution they come up with is wrong,” “We find that nobody in that group will
cooperate with us,” or “What do you expect of those idiots?” Particularly when inter-
group communication is necessary, the amount and quality of communication usually
drops off. Groups begin seeing the others as “the enemy” rather than in positive or
even neutral terms. As the amount of communication decreases, the amount of
mutual problem solving falls off as well. The tendency increases for one group to
sabotage the efforts of the other group, either consciously or unconsciously. The diag-
nostic process should be oriented to understanding the history of relationships
between the two groups.
Application Stages A basic strategy for improving interdepartmental or intergroup
relationships is to change the perceptions (perhaps, more accurately, misperceptions)
that the two groups have of each other. One formal approach for accomplishing this,
originally described by Blake and his associates, consists of a ten-step procedure.14
304 PART 3 HUMAN PROCESS INTERVENTIONS

1. A consultant external to the two groups obtains their agreement to work directly on
improving intergroup relationships. (The use of an outside consultant is highly
recommended because without the moderating influence of such a neutral third
party, it is almost impossible for the two groups to interact without becoming dead-
locked and polarized in defensive positions.)
2. A time is set for the two groups to meet—preferably away from their normal work
situations.
3. The consultant, together with the managers of the two groups, describes the purpose
and objectives of the meeting: to develop better mutual relationships, explore the
perceptions the groups have of each other, and formulate plans for improving the
relationship. The two groups are presented the following or similar questions:
“What qualities or attributes best describe our group?” “What qualities or attributes
best describe the other group?” and “How do we think the other group will describe
us?” Then, the two groups are encouraged to establish norms of openness for feed-
back and discussion.
4. The two groups are assigned to separate rooms and asked to write their answers to
the three questions. Usually, an outside consultant works with each group to help
the members become more open and to encourage them to develop lists that accu-
rately reflect their perceptions, both of their own image and of the other group.
5. After completing their lists, the two groups reconvene. A representative from each
group presents the written statements. Only the two representatives are allowed to
speak. The primary objective at this stage is to make certain that the images, percep-
tions, and attitudes are presented as accurately as possible and to avoid the argu-
ments that might arise if the two groups openly confront each other. Questions,
however, are allowed to ensure that both groups clearly understand the written
lists. Justifications, accusations, or other statements are not permitted.
6. When it is clear that the two groups thoroughly understand the content of the lists,
they separate again. By this point, a great number of misperceptions and discrepan-
cies have been brought to light.
7. The task of the two groups (almost always with a consultant as a process observer)
is to analyze and review the reasons for the discrepancies. The emphasis is on solv-
ing the problems and reducing the misperceptions. The actual or implicit question is
not whether the perception of the other group is right or wrong but rather “How did
these perceptions occur? What actions on the part of our group may have contrib-
uted to this set of perceptions?”
8. When the two groups have worked through the discrepancies, as well as the areas of
common agreement, they meet to share both the identified discrepancies and their
problem-solving approaches to those discrepancies. Because the primary focus is on
the behavior underlying the perceptions, free, open discussion is encouraged
between the two groups, and their joint aim is to develop an overall list of remaining
and possible sources of friction and isolation.
9. The two groups are asked to develop specific plans of action for solving specific prob-
lems and for improving their relationships.
10. When the two groups have gone as far as possible in formulating action plans, at
least one follow-up meeting is scheduled so that the groups can report on actions
that have been implemented, identify any further problems that have emerged, and,
where necessary, formulate additional action plans.
In addition, to this formal approach to improving interdepartmental or intergroup
relationships there are a number of more informal procedures. Beckhard asks each of
CHAPTER 11 ORGANIZATION PROCESS APPROACHES 305

the two groups to develop a list of what irritates or exasperates them about the other
group and to predict what they think the other group will say about them.15 Similarly,
based on their experience at TRW Systems, Fordyce and Weil developed a modified
approach whereby each group builds three lists—one containing “positive feedback”
items (those things the group values and likes about the other group), a “bug” list
(those things the group dislikes about the other group), and an “empathy” list (predic-
tions about what the other group’s list contains).16 When the groups come together,
they build a master list of major concerns and unresolved problems, which are
assigned priorities and developed into an agenda. When they have completed the
task, the subgroups report the results of their discussions to the total group, which
then develops a series of action steps for improving the relations between the groups
and commits itself to following through. For each action step, specific responsibilities
are assigned, and an overall schedule is developed for prompt completion of the action
steps.
These different approaches to resolving intergroup conflict form a continuum
from behavioral solutions to attitudinal change solutions.17 Behavioral methods are
oriented to keeping the relevant parties physically separate and specifying the lim-
ited conditions under which interaction will occur. Little attempt is made to under-
stand or change how members of each group see the other. Conversely, attitudinal
methods, such as exchanging group members or requiring intense interaction with
important rewards or opportunities clearly tied to coordination, are directed at
changing how each group perceives the other. Here, it is assumed that perceptual
distortions and stereotyping underlie the conflict and need to be changed to
resolve it.
Most of the OD solutions to intergroup conflict reviewed in this section favor attitu-
dinal change strategies. However, such interventions typically require considerably more
skill and time than do the behavioral solutions. Changing attitudes is difficult in conflict
situations, especially if the attitudes are deep-seated and form an integral part of people’s
personalities. Attitudinal change interventions should be reserved for those situations in
which behavioral solutions might not work.
Behavioral interventions seem most applicable in situations in which task interde-
pendence between the conflicting groups is relatively low and predictable. For example,
the task interaction between the production and the maintenance departments might be
limited to scheduled periodic maintenance of machines. Here, higher management can
physically separate the departments and specify the limited conditions under which
they should interact. Where the shared task requires only limited interaction, that inter-
action can be programmed and standardized.
Attitudinal change interventions seem necessary when task interdependence between
the conflicting groups is high and unpredictable, such as might be found between the
research and the production departments during a new-product introduction. Here, the
two departments need to work together closely, often at unpredictable times and with
novel, complex issues. When conflicts arise because of misperceptions, they must be
worked through in terms of people’s perceptions and attitudes. The shared task does
not permit physical separation or limited, specific interaction. It is in these highly inter-
dependent and unpredictable task situations that the conflict resolution interventions
discussed in this section are most appropriate.
Application 11.2 presents an example of intergroup conflict resolved by an attitudi-
nal change intervention.18 The method reflects a variation on the traditional process
described above and also places the intervention in a planned change context.
306 PART 3 HUMAN PROCESS INTERVENTIONS

a
p
p
li
ca
ti
o
n
1
1
2 IMPROVING INTERGROUP RELATIONSHIPS IN JOHNSON &JOHNSON’S DRUG EVALUATION DEPARTMENT
J
ohnson & Johnson (J&J) is one of the
world’s largest manufacturers of health
care products. The fundamental objective
of the company is to provide scientifically
sound, high-quality products and services to
help heal the sick, cure disease, and improve
the quality of life. In mid-2000, J&J made a
strategic decision to merge two research and
development organizations in the Pharmaceuti-
cals Group. Departments in the Robert Wood
Johnson Pharmaceutical Research Institute,
headquartered in New Jersey, and the Janssen
Research Foundation, headquartered in Belgium,
were integrated to create a leading-edge
global function called the Drug Evaluation
(DE) organization. DE’s purpose is to rapidly
generate data that allows J&J to make the
best investment decisions about the drug port-
folio. In the overall R&D process, the group is
the bridge between discovery of new com-
pounds and full development of a new drug.
As a group, they are responsible for investigat-
ing all compounds that may be potential new
products and making data-driven decisions in
collaboration with the discovery and full-
development groups. The highest-quality and
highest-potential discovery compounds are
quickly and efficiently moved through preclini-
cal development and into initial human trials.
DE employees experience a genuine and
unique opportunity to shape the R&D pipeline
in J&J and ultimately influence patient well-
being. It is an exciting and challenging place
to be in.
Most of the first half of 2001 was spent in
merger and integration activity with the
groups, while moving compounds through the
pipeline. The DE management team has over-
all responsibility for the organization and con-
sists of the global head of DE and seven
direct reports representing chemical pharma-
ceuticals, clinical drug evaluation, clinical
operations, and portfolio planning and resource
management (PPRM), among others.
One of the groups, the PPRM group was a
new function created to improve the efficiency
of DE processes. They allowed the DE man-
agement team to accurately track compounds
as they moved through the process and pro-
vided information in a consistent manner
across the organization. The group consisted
of project champions, portfolio planners,
resource managers, and support staff. Project
champions were the core of the PPRM group.
When a compound is accepted into DE, the
project champion leads a project team consist-
ing of representatives from the different func-
tions. This team is responsible for planning and
executing the DE plan for their compound. The
project champion works closely with all of the
functions to ensure the compound progresses
on schedule through the different stages of the
process and ultimately on the handoff to full
development.
The Clinical Drug Evaluation group was
responsible for developing clinical plans that
would take the new drug compound into
human trials. The group consisted primarily of
clinical scientists, M.D.s who were responsible
for focusing on the key questions to be identi-
fied to achieve DE deliverables. Clinical scien-
tists were also responsible for communicating
these questions and the results from the clini-
cal aspects of the project to the rest of the
project team. The quality of the data depends
on asking the right questions, so this role is
critical to delivering business benefits of the
compound.
In the fall of 2001, the DE management
team expressed concern that there were
many issues surfacing about the nature of the
work, roles and responsibilities, and the gen-
eral cohesion within DE. This was particularly
true with the clinical scientists and the project
champions. They worried that a conflict
between the schedule-oriented project cham-
pions and the quality-oriented clinical specia-
lists was hurting department morale. The DE
management team asked an OD practitioner
to help with understanding and addressing
these issues. As part of the process, the prac-
titioner conducted diagnostic interviews with
CHAPTER 11 ORGANIZATION PROCESS APPROACHES 307

Results of Intergroup Conflict Interventions Early OD practitioners reported on a
number of studies concerning the effects of intergroup conflict resolution. Several
researchers have reported positive results in a variety of settings, including union–
management relations, an Indian tribal council, government organizations, and for-
profit firms.19 The results include attitudinal changes, such as improved perceptions,
increased trust, and less stereotyping in addition to improved operational results. For
example, Huse found that bringing representatives of different groups together to work
on common work-related problems had a marked effect, not only on relationships
among a number of different manufacturing groups but also on the quality of the prod-
uct, which increased 62%.20
The technology for improving intergroup relations is promising. A greater distinc-
tion between attitudinal and behavioral changes needs to be made in planning effective
various members of the PPRM and Clinical Drug
Evaluation groups. She found that opinions varied
widely as to the nature of the problem and its char-
acteristics. For example, some people did not per-
ceive a problem, some believed it had nothing to
do with the interaction of the project champions
and the clinical scientists, and others believed it
was a lack of clear roles and responsibilities. Over-
all, seven different themes emerged from the data,
although no single issue dominated. Faced with
this lack of agreement on the issue and its causes,
the practitioner, in collaboration with the different
groups, proposed a three-day off-site meeting to
work through the data and concerns.
The meeting was held in January 2002 in Villars,
Switzerland (selected for its neutrality), and consisted
of exercises to improve communications and a pro-
cess to address intergroup conflict. Members of the
PPRM and Clinical Drug Evaluation groups were
asked to address the following questions:
• What do we want from you?
• What we don’t want from you?
• What do we offer/give you?
• What we don’t offer/give you?
Each group was asked to discuss and come to
consensus about their perceptions of the other
group. Reflecting the diagnostic data, there was a
lively discussion within each group as perceptions
were shared, discussed, and resolved.
When each group presented their results, typi-
cal responses included the following: “We want
your expertise;” “We want everyone to be a part
of the team;” “We want input, support and agree-
ment, adequate time, and frequent interaction.”
The groups did not want surprise decisions,
delayed or filtered information, and responsibility
for another’s job. These themes were consistent
across both groups.
The practitioner then opened the floor for a
large group discussion of the presentations.
Although a variety of issues were discussed and
clarified, the groups noticed that they were in
90% agreement. The key issue that needed to be
resolved was the decision-making process. The
practitioner then facilitated a discussion of how
the two groups should make decisions and they
agreed on a method to do so.
As a result of the meeting, the two groups
reported improved relations and increased trust
because of an increased understanding of each
other’s perspectives. They developed positive,
cooperative attitudes toward the other group,
understood how different cultural backgrounds
and working styles were contributing to the
strained decision-making process, and were able
to reach agreement on a variety of important
roles and responsibilities. In addition, a few
weeks after the meeting, the participants said
they realized the importance of setting the time
aside to work through the issues. They gained an
appreciation for a need to have consistency in
methods and tools for the teams. The DE manage-
ment team was pleased with the results.
308 PART 3 HUMAN PROCESS INTERVENTIONS

intergroup interventions. A greater variety of interventions that address the practical dif-
ficulties of bringing two groups together is also necessary. Finally, more knowledge is
needed about how culture affects intergroup conflict and how interventions need to be
adjusted in cross-cultural situations.21 Growing knowledge and theory suggest that
conflict can be either functional or dysfunctional, depending on the circumstances.
Further research is needed to identify when conflict should be intensified and when it
should be reduced.
11-4 Large Group Interventions
The third system-wide process intervention is called large group intervention. Such
change programs have been referred to variously as “search conferences,” “open-space
meetings,” “open-systems planning,” “world cafés,” “future searches,” “decision accelera-
tors,” and “Appreciative Inquiry Summits.”22 They focus on issues that affect the whole
organization or large segments of it, such as developing new products or services,
responding to environmental change, redesigning the organization, or introducing new
technology. The defining feature of large group interventions, what differentiates them
from confrontation meetings, is the bringing together of large numbers of organization
members, often more than a hundred, and a broader range of other stakeholders for a
two- to four-day meeting or conference. Here, conference attendees work together to
identify and resolve organization-wide problems, to design new approaches to structur-
ing and managing the firm, or to propose future directions for the organization. Large
group interventions are among the fastest-growing OD applications. They reflect the
core values of OD (inclusion, participation, and learning), have been used successfully
in large and small organizations, and have been successfully adapted to a variety of
cultural contexts.23
Large group interventions can vary on several dimensions, including purpose, size,
length, structure, and number. The purpose of these change methods can include creat-
ing the future plan and setting direction, redefining work, organization structures, and
systems, and planning or solving particular organizational problems.24 Large group inter-
ventions have been run with groups of less than 50 to more than 2,000 participants and
have lasted between one and five days. Some large group processes are relatively planned
and structured; others are more informal. Some interventions involve a single large-
group meeting; others include a succession of meetings to accomplish system-wide
change in a short period of time.
Despite these differences, most large group interventions have similar conceptual
foundations and methods.25 These interventions have evolved over the past 30 years
and represent a combination of open-systems thinking, participation and social construc-
tion, and self-management. Open-systems thinking, as outlined in Chapter 5, directs
attention to how organizations interact with and are shaped by their environments.
Proponents of large group interventions suggest that an organization’s current state is
the result of the intentional and unintentional interaction among many groups and
individuals both inside and outside the organization. Changing the organization’s
vision, structure, strategy, or work therefore requires the deliberate, face-to-face coor-
dination of these groups.
The participation and social construction assumptions support this open-systems
view. The participation assumption suggests that a variety of organization stakeholders
must be involved to create an accurate view of the environment and organization. The
social construction assumption suggests that only by developing a shared understanding
CHAPTER 11 ORGANIZATION PROCESS APPROACHES 309

of the environment and the organization among these stakeholders can “common
ground” be found and coordinated action be possible. Without a broad and shared
view, conflicts can arise about what parts of the environment or what actions are most
important. Such perceptual disagreements make planning and implementing a coherent
strategy difficult.26
Finally, the self-management assumption proposes that large group processes must
create the conditions for ownership and commitment. All large group methods attempt
to create a rhythm of large group presentations balanced against small-group discussions,
exercises, tasks, and dialogues. Through the small-group work, participants work with a
variety of stakeholders, build perspective, and become committed to action.
11-4a Application Stages
Conducting a large group intervention generally involves preparing for the meeting, con-
ducting it, and following up on outcomes. These activities are described below.
Preparing for the Large Group Meeting A design team/microcosm group compris-
ing OD practitioners and organization members reflecting the general theme of the con-
ference is formed to plan and organize the intervention. The team generally addresses
four key ingredients for successful large group interventions: a compelling meeting
theme, appropriate participants, relevant tasks to address the theme, and postmeeting
follow-through.
1. Compelling meeting theme. Large group interventions require a compelling reason
or focal point for change. Although “people problems” can be an important focus,
more powerful reasons for large group efforts include managing impending mergers
or reorganizations, responding to environmental threats and opportunities, or pro-
posing radical organizational changes.27 Drawing on diagnostic data regarding the
organization’s current state and the forces pressing for change, senior leaders must
communicate and make clear to others the purpose of the large group meeting.
Ambiguity about the reason for the intervention can dissipate participants’ energy
and commitment to change. For example, a large group meeting that successfully
envisioned a hospital’s future organization design was viewed as a failure by a few
key managers who thought that the purpose was to cut costs from the hospital’s
budget. Their subsequent lack of support stalled the change effort.
2. Appropriate participants. A fundamental goal of large group interventions is to
“get the whole system in the room.” This involves inviting as many people as possi-
ble who have a stake in the conference theme and who are energized and committed
to conceiving and initiating change. Senior managers, suppliers, union leaders, inter-
nal and external customers, trade-group representatives, government and regulatory
officials, and organization members from a variety of jobs, genders, races, and ages
are potential participants.
Recent research on large group interventions suggest that simple representation
from different stakeholder groups is not enough to achieve the advantages of having
the “whole system in the room.”28 If only one customer attends the meeting, and
customers are critical to the conference theme, it is unlikely that the customer
“voice” will be fully represented in the meeting deliberations. Planners must ensure
that each important stakeholder group has sufficient representation.
3. Relevant tasks to address the conference theme. As described below, a successful
large group intervention is dependent on the sequence of tasks performed by the
group. These tasks typically are assigned to subgroups that examine the theme and
310 PART 3 HUMAN PROCESS INTERVENTIONS

draw conclusions for action. Generally, participants rely on their own experience
and expertise to address system-wide issues, rather than drawing on resources from
outside of the large group meeting. However, newer forms of large group interven-
tions, such as the decision accelerator, relax this assumption and provide a means
for the group to access information on the Internet or other sources. This ensures
that the meeting can be completed within the allotted time and that members can
participate fully as important sources of information.
The design team must think clearly about the conference objectives, the
expected deliverables, and the sequence of activities, exercises, and conversations
that will produce those results. The three generic models described in the next sec-
tion are a good starting point. However, with the help of an OD practitioner experi-
enced in large group meeting design, a team can be very creative and innovative
with respect to the activities performed during the meeting.
Finally, design teams and practitioners must give appropriate attention to the
logistics and support required to manage a large group of people. This includes tech-
nological issues, such as audio/visual needs, microphones, and other communica-
tions concerns, logistical issues, such as moving people from table to table or room
to room, note takers, and small-group facilitators, and facilities issues, such as meals,
the size of the room, and noise. Many large group interventions do not meet their
objectives because of poor planning in this area.
4. Postmeeting follow-through. Abundant evidence suggests that without a clear plan
for taking the outputs, action plans, and recommendations from a large group inter-
vention, the meeting will just be an “event.” There is little likelihood that change will
occur. Given the high expectations that are often generated by this intervention, it is
imperative that the design team specify how the outputs from the meeting will be
used. This could include clarifying how senior leaders will make decisions about
which recommendations to support and fund, how action plans from the conference
will be integrated with other ongoing strategic initiatives, or how particular changes
will be implemented.
Conducting the Meeting The flow of events in a large group meeting can vary
greatly, depending on its purpose and the framework adopted. Most large group pro-
cesses, however, fit within three primary frameworks: open-systems methods, open-
space methods, and positive methods. These various methods reflect different strategies
for dealing with the four key dilemmas of large group interventions:29
1. The dilemma of voice refers to the problem of encouraging participation on the one
hand and being overwhelmed if each individual wants to speak. Even when a large
group event is relatively small in terms of participants, time would quickly run out if
everyone wanted to speak up in the large group.
2. The dilemma of structure refers to how tightly or loosely the meeting should be
organized. Some methods, like the open-systems processes described below, can be
tightly controlled while others, like the open-space methods, are almost unstruc-
tured. The dilemma is not knowing how much structure a particular group prefers,
how much they want, or how much anxiety they are experiencing.
3. The egocentric dilemma refers to the problem of people holding on to their own
personal views of right or wrong, better or worse. When individuals hold on too
tightly, it makes large-group decision making difficult. Similarly, when a large
group event overly represents one stakeholder group, that group can dominate the
conversation and be less open to alternative points of view.
CHAPTER 11 ORGANIZATION PROCESS APPROACHES 311

4. The dilemma of emotional contagion refers to a group dynamic where many people
take on the frustrations or excitement of others. When emotional contagion hap-
pens, people unconsciously give up their ownership of a problem, action, or solution
and get swept up in the moment. It represents a large group version of “groupthink”
and can result in solutions that people, upon reflection, cannot support.
Open-Systems Methods. A variety of large group approaches, such as search confer-
ences, open-systems planning, decision accelerators, and real-time strategic change,
have their basis in open-systems methods and are among the more structured large
group processes. These approaches help organizations assess their environments system-
atically and develop strategic responses to them. They help organization members
develop a strategic mission for relating to the environment and influencing it in favor-
able directions. Open-systems methods begin with a diagnosis of the existing environ-
ment and how the organization relates to it. They proceed to develop possible future
environments and action plans to bring them about.30 These steps are described below.
1. Map the current environment surrounding the organization. In this step, the dif-
ferent domains or parts of the environment are identified and prioritized. This
involves listing all external groups directly interacting with the organization, such
as customers, suppliers, or government agencies, and ranking them in importance.
Participants then are asked to describe each domain’s expectations for the organiza-
tion’s behavior.
2. Assess the organization’s responses to environmental expectations. This step asks
participants to describe how the organization currently addresses the environmental
expectations identified in step 1.
3. Identify the core mission of the organization. This step helps to identify the
underlying purpose or core mission of the organization, as derived from how it
responds to external demands. Attention is directed at discovering the mission as it
is revealed in the organization’s behavior, not as it is pronounced in the organiza-
tion’s official statement of purpose. This is accomplished by examining the organiza-
tion and environment transactions identified in steps 1 and 2 and then assessing the
values that seem to underlie those interactions. These values provide clues about the
actual identity or mission of the organization.
4. Create a realistic future scenario of environmental expectations and organization
responses. This step asks members to project the organization and its environment
into the near future, assuming no real changes in the organization. It asks partici-
pants to address the question, “What will happen if the organization continues to
operate as it does at present?” Participant responses are combined to develop a likely
organization future under the assumption of no change.
5. Create an ideal future scenario of environmental expectations and organization
responses. Members are asked to create alternative, desirable futures. This involves
going back to steps 1, 2, and 3 and asking what members ideally would like to see
happen in the near future in both the environment and the organization. People are
encouraged to fantasize about desired futures without worrying about possible
constraints.
6. Compare the present with the ideal future and prepare an action plan for reduc-
ing the discrepancy. This last step identifies specific actions that will move both the
environment and the organization toward the desired future. Planning for appropri-
ate interventions typically occurs in three timeframes: tomorrow, six months from
now, and two years from now. Participants also decide on a follow-up schedule for
sharing the flow of actions and updating the planning process.
312 PART 3 HUMAN PROCESS INTERVENTIONS

There are a number of variations on this basic model, each of which follows a simi-
lar pattern of creating common ground, discussing the issues, and devising an agenda for
change. For example, search conferences begin with an exercise called “appreciating the
past,” which asks participants to examine the significant events, milestones, and high-
lights of the organization’s previous 30 years (or less, in the case of newer organiza-
tions).31 It demonstrates that participants share a common history, although they may
come from different organizations, departments, age groups, or hierarchical levels.
Once common ground is established, members can discuss the system-wide issue or
theme. To promote widespread participation, members typically organize into subgroups of
eight to ten people representing as many stakeholder viewpoints as possible. The subgroups
may address a general question (for example, “What are the opportunities for new business
in our global market?”) or focus on a specific issue (for example, “How can we improve
quality and cut costs on a particular product line?”). Subgroup members brainstorm answers
to these questions, record them on flipchart paper, and share them with the larger group.
The whole group compares responses from the subgroups and identifies common themes.
Other methods, such as presentations to the large group, small-group meetings on particular
aspects of the conference theme, or spontaneous meetings of interest to the participants, are
used to discuss the conference theme and distribute information to members.
The final task of large group meetings based on open-systems methods is creating
an agenda for change. Participants are asked to reflect on what they have learned at the
meeting and to suggest changes for themselves, their department, and the whole organi-
zation. Members from the same department often are grouped together to discuss their
proposals and decide on action plans, timetables, and accountabilities. Action items for
the total organization are referred to a steering committee that addresses organization-
wide policy issues and action plans. At the conclusion of the large group meeting, the
departmental subgroups and the steering committee report their conclusions to all parti-
cipants and seek initial commitment to change.
Application 11.3 describes the large group decision accelerator process at Alegent
Health. The decision accelerator model was used to generate an innovative vision and
strategy for the key clinical areas within the health care system. It followed an open-
systems model to design and implement its large group meeting.
Open-Space Methods. The second approach to large group interventions attempts to
address the four dilemmas by imposing a minimal level of formal structure. Open-
space methods temporarily restructure or “self-organize” participants around interests
and topics associated with the conference theme. They generally follow these steps:32
1. Set the conditions for self-organizing. In the first step, the OD practitioner or manager
responsible for the large group intervention sets the stage by announcing the theme of the
session and the norms that will govern it. In addition, participants are informed that the
meeting will consist of small-group discussions convened by the participants and addres-
sing any topic they believe critical to the theme of the conference. Two sets of norms gov-
ern how open-space methods are applied, and although the norms may sound
ambiguous, they are critical to establishing the conditions for a successful meeting.
The first set of norms concerns the “Law of Two Feet.” It encourages people to
take responsibility for their own behavior—to go to meetings and discussions where
they are learning, contributing, or in some way remaining interested. Moving from
group to group is legitimized by the roles of “butterflies” and “bumblebees.” Butter-
flies attract others into spontaneous conversations and, in fact, may never attend
a formal meeting. Bumblebees go from group to group and sprinkle knowledge,
information, or new ideas into different meetings.
CHAPTER 11 ORGANIZATION PROCESS APPROACHES 313

a
p
p
lica
tio
n
1
1
3
USING THE DECISION ACCELERATOR TO GENERATE
INNOVATIVE STRATEGIES IN ALEGENT’S WOMEN’S
AND CHILDREN’S SERVICE LINE
T
he applications in Chapters 4, 6, and 9
described the process of entry, contracting,
data collection, and evaluation in a large
group intervention at Alegent Health. In
this application, we describe the Women’s and
Children’s Right Track Decision Accelerator
workshop. It was one of the initial six DAs
intended to set a vision and strategy for the
clinical service areas within the health system.
The Alegent Health (AH) organization is a
large health care system in eastern Nebraska
and western Iowa. It has five large hospitals
and a variety of outpatient clinics. As part of
the change agenda from the new CEO,
Wayne Sensor, a Chief Innovation Officer, Ted
Schwab, was hired to lead in the development
of a transformed health care system. Under a
corporate vision that included achieving “world-
class leadership in compassionate, faith-based
health services that measurably enriches
the lives of families we serve through an excep-
tional commitment to quality,” Schwab
engaged two OD consultants from California,
Joel Fadem and Stu Winby. Fadem was a pro-
fessor at UCLA who specialized in health care
organizations, and Winby was a former internal
OD consultant at Hewlett-Packard, where he
had innovated on large group interventions dur-
ing the HP–Compaq merger (see Application
8.4). Together, Schwab, Fadem, and Winby
worked with other members of AH to decide
on the use of large group interventions as a
way to generate innovative thinking, strategies,
and decision making in the organization.
The strategic innovation process was
kicked off in June 2005, with six large group
“decision accelerators,” one for each of the
clinical service lines. A decision accelerator is
similar to other large group interventions, espe-
cially those based on open-systems thinking. It
has two unique attributes that distinguish it
from the others. First, a DA is more than a pro-
cess; it is a physical space. Alegent Health not
only committed to the large group intervention
as a method for innovation, it committed phys-
ical resources to maximizing the impact of the
work. The organization leased half a floor of an
office building in Omaha, gutted the offices,
and built a completely flexible facility to sup-
port the DA process (see figure here). Each
DA space is designed to fit the situation and
organization needs, but has several things in
common. The primary working space is
completely flexible with moveable white
boards where small groups record their out-
puts and discussions, moveable chairs, and
so on. Alegent’s DA space had a unique fea-
ture that proved to be a favorite among the
participants. All of the walls in the space
could be written on with erasable markers.
That is, the walls of the room—and there was
a lot of wall space—could host planned or
impromptu meetings where the group mem-
bers could draw what they were thinking.
Second, the DA, like other large group inter-
ventions, assumes that by getting the “whole
system in the room,” a richer, more complete
conversation and better decisions ensue. How-
ever, the DA does not assume that “all” of the
necessary or available information is in the room
and so most DA spaces include some kind of
library with Internet-enabled computer terminals
and other source documentation (e.g., white
papers, articles, books) that might inform the
discussion during the DA.
The Women’s and Children’s (W&C) DA
was the fourth one conducted at AH. The
agenda for the W&C DA was similar to others,
but Fadem and Winby worked with the VP in
charge of the clinical area, Joan Neuhaus, to
modify some of the activities to fit with the
challenges, opportunities, and existing features
of the W&C service line. For example, Joan
wanted the group to address the handling of
high-risk pregnancies and deliveries as well as
thinking about women’s health issues more
broadly. Also as part of the preparation, Steve
Houston, who directed the facility, put together
314 PART 3 HUMAN PROCESS INTERVENTIONS

his team of support staff, including note takers
who transcribed large group discussions and
report-outs, photographers who captured all
small-group outputs, a graphic facilitator who
recorded the large group conversations in a visual
format, and catering for the meeting. The support
staff played a critical role in the success of a DA by
knowing the agenda well enough to position the
physical facility in advance of any activity so that
the participants needed only to focus on the con-
tent of the meeting. This included having handouts,
instructions, surveys, and other documents pre-
pared in advance, which made it possible to handle
any immediate requests from the facilitators.
On Day 1, the participants arrived to a light
breakfast and were immediately given a task. Using
the white boards that were in front of the large group
meeting space, called the theater, each participant in
the workshop was to find a marker and to write
down the events, forces, trends, and innovations
that they knew of or heard about in seven different
categories (e.g., technology, medicine/health care,
society, the economy, globally, ecologically, and in
education). The white boards had been prepared in
advance by Houston’s team with the seven catego-
ries and with each white board representing a partic-
ular time period: 1975–1990, 1991–2005, and 2006–
2020. After about 15 minutes, the participants were
asked to find two people they didn’t know and the
trio had to share the things they had written down.
Following the environmental scanning activity,
an introduction and overview of the agenda took
CHAPTER 11 ORGANIZATION PROCESS APPROACHES 315

place. The CEO welcomed the participants and
encouraged them to talk about the things that
would make Alegent Health a “world-class” organi-
zation. He referred the group to the corporate vision,
expressed his commitment to the effort, and said
he would be back on the last day to hear their
ideas for creating a world-class W&C service line.
The next few activities asked participants, in
small groups first and then in large group report-
outs, to think about the implications of the environ-
mental events on the W&C service line by 2015,
what was implied by the “world class” part of the
Alegent Health vision, and the implications “world
class” had for the W&C clinical area. For each
activity, a relevant organizing structure was used.
For example, for discussing the implications of
“world class” on the W&C clinical area, the groups
were broken down into stakeholder categories.
How might, for example, patients, the community,
or physicians view a world-class W&C service? In
each activity, the small groups were composed of
multiple stakeholders, including physicians, man-
agers/executives from Alegent, patients and fami-
lies, community members, and other stakeholders.
Before the day ended, Winby asked the group
a question: “If there was one thing that you really
want to make sure gets addressed at this meeting
to make it a success for you, what would that be?”
He had people write their questions on a piece of
paper and put it into a box as they were leaving.
During the debrief after the first day, the facil-
itators and support team reviewed what went well
and any processes that needed to be improved,
discussed the energy and interests of the partici-
pants, and sorted the “what’s most important”
questions into similar themes in preparation for
an activity on Day 2.
Day 2 began with a welcome from Neuhaus
and then the group went to work. The first activity
was to take the work from the Day 1 W&C vision-
ing activities and prioritize the different elements.
The group was questioned as to what, for them,
were the most important dimensions of a world-
class W&C service line? In addition, the group
was led through an exercise to determine if there
were any technologies or regulatory events that
would fundamentally alter the way health care
was delivered in this area. The group discussed,
for example, the implications of being able to
deliver a child that was less than 20 weeks old.
In the next exercise, the facilitators asked
the group to address the questions they had
asked at the end of Day 1. The questions had
been categorized into six areas, including gaps in
the community’s health care, women’s health ser-
vice offerings, and obstetrics among others. The
participants were allowed to sign up to discuss
whatever subject interested them. In the report-
out of the groups, an important issue that had
been simmering throughout Day 1 was surfaced.
That is, should high-risk pregnancies and deliveries
be centralized to one hospital and what would that
imply? The large group debated this subject from a
variety of perspectives. In the end, it was agreed
that such a move made sense from the world-class
perspective, but that it would be difficult to imple-
ment and would face much resistance.
The final activity asked the participants to
synthesize their discussions and activities into a
high-level “horizons map.” That is, for each of the
major categories that had been discussed, includ-
ing women’s health, obstetrics, child/adolescent
medicine, and community health, the group was
to lay out the key decisions, milestones, and
events that would need to take place over the
next 18 months, by 2010, and by 2015 to realize
their vision of a world-class W&C clinical area.
On Day 3, the senior leadership team from Ale-
gent Health joined the group and listened to a pre-
sentation of the horizon map. The graphic facilitator
drew the final horizons map with pictures, words,
and symbols, and this was used as the outline for
the presenters. Following the presentations, the
executives asked questions and discussed some
of the group’s decisions. In addition, they laid out
the “next steps” of the process, including gathering
the data from all of the clinical area DAs in order to
resource the strategies appropriately.
316 PART 3 HUMAN PROCESS INTERVENTIONS

The second set of norms is labeled the “Four Principles.” The first principle is
“whoever comes is the right people.” It is intended to free people to begin conversa-
tions with anyone at any time. It also signals that the quality of a conversation is
what’s most important, not who’s involved. The second principle, “Whatever hap-
pens is the only thing that could have,” infuses the group with responsibility,
encourages participants to be flexible, and prepares them to be surprised. “Whenever
it starts is the right time” is the third principle and is aimed at encouraging creativ-
ity and following the natural energy in the group. The final principle, “When it’s
over, it’s over,” allows people to move on and not feel like they have to meet for a
certain time period or satisfy someone else’s requirements.
2. Create the agenda. The second step in open-space interventions is to develop a road
map for the remainder of the conference. This is accomplished by asking partici-
pants to describe a topic related to the conference theme that they have passion for
and interest in discussing. This topic is written on a large note card or “sticky note,”
announced to the group, and then posted on the community bulletin board where
meeting topics, times, and locations are displayed.33 The person announcing the
topic agrees to convene the meeting at the posted time and place and to prepare a
short summary of the meeting. This process continues until everyone who wants to
define a topic has been given the chance to speak. The final activity in this step asks
participants to sign up for as many of the sessions as they have interest in. The
open-space meeting begins with the first scheduled sessions.
3. Coordinate activity through information. During an open-space session, there are
two ways to coordinate activities. First, each morning and evening a community
meeting is held to announce new topics that have emerged for which meeting
dates and times have been assigned, or to share observations and learnings. Second,
as the different meetings occur, the conveners produce one-page summaries of what
happened, who attended, what subjects were discussed, and what recommendations
or actions were proposed. Typically, this is done on computer in a room dedicated
for this purpose. These summaries are posted near the community bulletin board in
an area often labeled “newsroom.” Participants are encouraged to visit the news-
room and become familiar with what other groups have been discussing. The sum-
maries also can be printed and copied for conference participants.
Positive Methods. The final large group intervention represents a hybrid approach to
the four dilemmas. It is distinguished from the other two methods by its use of the posi-
tive approach to change described in Chapter 2. In fact, many of the futuring and vision-
ing exercises in the open-systems approaches that help guide members in creating
“images of potential” toward which the organization can grow and develop are drawn
from this approach.34 These methods can increase members’ energy for change and
build a broad consensus toward a new future. Like other large group methods, these
approaches can help look at a variety of organizational issues; however, their distinguish-
ing feature is the “appreciative” framing of issues and the leveraging of the organization’s
positive core attributes. The Appreciative Inquiry (AI) Summit approach suggests that
human organizing and change should be a relational process of inquiry, grounded in
affirmation and appreciation.35 The four steps in an AI summit are as follows:
1. Discover the organization’s positive core. With respect to the purpose of the summit,
participants first pair up with another person and conduct an appreciative interview. If
the summit is organized to take advantage of a new market opportunity, the questions
would generate stories about experiences where a group or organization was most
CHAPTER 11 ORGANIZATION PROCESS APPROACHES 317

successful in being entrepreneurial and swift. If the summit were about addressing poor
organization coordination, the questions and stories would be personal experiences
where two or more groups worked well together.
Following the interviews, the pairs join up with three other pairs to discuss their
answers to the questions. What is it that is common among all these stories? What
are the elements of successful entrepreneurship or collaboration, for example? These
small-group conversations are then aggregated to create a broad and inclusive list of
success factors and other themes associated with these successful experiences.
2. Dream about and envision a more desired and fulfilling future. In this step, par-
ticipants use the themes and success factors from the first activity to develop com-
pelling images of the future. In this visioning exercise, participants are encouraged to
make bold and provocative propositions about what could be in the future. To arrive
at a bold vision, small groups share their greatest hopes or act out skits and presen-
tations that convey what they believe is possible. Unlike open system or open-space
methods, there is very little prioritizing or culling out of the best or more compelling
themes. The positive approach believes that breadth and inclusiveness are the most
important way to galvanize organization change.
3. Design the structural and systems arrangements that will best reflect and support
the vision or dream. Members of the summit identify the design features (strategies,
structures, systems, processes) that will need to be in place to make the vision a real-
ity. This step allows participants to articulate the dream in concrete terms.
4. Create the specific action plans that will fulfill the organization’s destiny. The
primary task of the destiny step is to identify the projects, initiatives, and action
plans required to implement the design criteria. Task forces are formed, teams vol-
unteer to take on projects, and any governance mechanisms needed to coordinate
the effort are created.
Following Up on Meeting Outcomes Follow-up efforts are vital to implementing
the action plans from large-scale interventions. These efforts involve communicating
the results of the meeting to the rest of the organization, gaining wider commitment
to the changes, and structuring the change process. In those cases where all the members
of the organization were involved in the large group meeting, implementation can proceed
immediately according to the timetable included in the action plans.
11-4b Results of Large Group Interventions
The number of case studies describing the methods and results of large group interven-
tions has increased dramatically. Such interventions have been conducted at for-profit
firms like Allstate Insurance, Hewlett-Packard, Toyota, Boeing, Microsoft, Motorola, Mar-
riott, and Rockport, and at such governmental and nongovernmental organizations as Save
the Children, World Vision, the City of Carlsbad, California, and the U.S. Department of
Agriculture. Large group interventions are increasingly common in other countries, includ-
ing Pakistan, South Africa, China, Australia, England, Mexico, and India.36 Despite the
proliferation of practice, however, Purser and Griffin lament that “empirical research,
such as longitudinal studies, quasi-experimental field studies, and studies of large sample
sizes across a wide variety of large-group interventions are severely lacking. Data that is
available tends to be anecdotal or single case studies from practitioners and consultants
who have a commercial stake in promoting their own methods.”37 Yaeger, Sorensen, and
Bengtsson’s review of AI supports this criticism. Of the 34 reported empirical evaluations
of the AI Summit approach, all of them were case studies.38
318 PART 3 HUMAN PROCESS INTERVENTIONS

In response to some of these concerns, Worley, Mohrman, and Nevitt analyzed six
large group interventions conducted at Alegent Health in Omaha, Nebraska.39 The six
“decision accelerators” were nearly identical in purpose—to develop a new strategy and
vision—and in design. They varied only in the composition of the group and the specific
theme (e.g., cardiology versus women’s and children’s health) being addressed. The
study’s methods—a naturally occurring field experiment and independent measures—
allowed the researchers to isolate the relationships among group composition, process,
and outcomes and rule out various alternative explanations for the results.
Two conclusions were particularly important. First, the study supported the popular
assertion that group composition or “getting the whole system in the room” affected
group process, but as noted earlier, the data showed that it was “balanced representation”
that was important. When the decision accelerators were populated with relatively equal
numbers of organization members, physicians, and community representatives (e.g.,
patients, government officials, regulatory representatives, and vendors), the large group
process was more likely to consider the views of the different stakeholders and consider
a wider variety of strategy, vision, and change options. Second, although the study did
not support a relationship between group composition and outcomes, it did support the
hypothesis that characteristics of the group’s process had important influences on the
decision accelerator’s outcomes. In particular, the more “intense” the debate and discus-
sion of different issues in the meeting, the more comprehensive, aggressive, and innova-
tive was the strategy and vision as described by the participants.
Because large group interventions often set the stage for subsequent OD interven-
tions, it is difficult to isolate their specific results from those of the other changes. Anec-
dotal evidence from practitioners and case studies suggest that benefits can include
increased energy toward organizational change, improved feelings of community, ability
to see “outside the box,” increased speed of change, and improved relationships with sta-
keholders.40 In addition, several case studies have documented improved business out-
comes, such as decreased turnover, absenteeism, and costs.41 Clearly, more systematic
research is needed on this important system-wide process intervention.
SUMMARY
This chapter described three types of system-wide
process interventions: confrontation meetings, inter-
group interventions, and large group interventions.
The organization confrontation meeting is a way of
mobilizing resources for organizational problem solv-
ing and seems especially relevant for organizations
undergoing stress. The intergroup relations
approaches are designed to help solve a variety of
organizational problems. Microcosm groups can be
formed to address particular issues and use parallel
processes to diffuse group solutions to the organiza-
tion. The intergroup conflict resolution approach
involves a method for mitigating dysfunctional
conflicts between groups or departments. Conflict
can be dysfunctional in situations in which groups
must work together. It may, however, promote orga-
nizational effectiveness when departments are rela-
tively independent of each other. Large group
interventions are designed to focus the energy and
attention of a “whole system” around organizational
processes such as a vision, strategy, organization
design, or culture. It is best used when the organiza-
tion is about to begin a large-scale change effort or is
facing a new situation. These three process interven-
tions represent important, time-honored, and success-
ful methods of introducing change in organizations.
CHAPTER 11 ORGANIZATION PROCESS APPROACHES 319

NOTES
1. M. Weisbord, Productive Workplaces (San Francisco:
Jossey-Bass, 1987).
2. R. Beckhard, “The Confrontation Meeting,” Harvard
Business Review 4 (1967): 149–55.
3. B. B. Bunker and B. Alban, Large Group Interventions (San
Francisco: Jossey-Bass, 1997); N. Tichy and S. Sherman,
Control Your Destiny or Someone Else Will (New York:
HarperCollins, 1993).
4. This application was adapted from material in Bunker
and Alban, Large Group Interventions; and Tichy and
Sherman, Control Your Destiny or Someone Else Will.
5. R. Beckhard, Organization Development: Strategies and
Models (Reading, MA: Addison-Wesley, 1969).
6. W. Bennis, Organization Development: Its Nature,
Origins, and Prospects (Reading, MA: Addison-Wesley,
1969), 7.
7. C. Alderfer, “An Intergroup Perspective on Group
Dynamics,” in Handbook of Organizational Behavior,
ed. J. Lorsch (Englewood Cliffs, NJ: Prentice Hall, 1987),
190–222; C. Alderfer, “Improving Organizational Commu-
nication Through Long-Term Intergroup Intervention,”
Journal of Applied Behavioral Science 13 (1977): 193–210;
C. Alderfer, R. Tucker, C. Alderfer, and L. Tucker, “The
Race Relations Advisory Group: An Intergroup Interven-
tion,” in Organizational Change and Development, vol. 2,
ed. W. Pasmore and R. Woodman (Greenwich, CT: JAI
Press, 1988), 269–321.
8. Alderfer, “Intergroup Perspective.”
9. Ibid., 210.
10. Alderfer, “Improving Organizational Communication.”
11. Alderfer et al., “The Race Relations Advisory Group.”
12. K. Jehn, “A Multimethod Examination of the Benefits
and Detriments of Intragroup Conflict,” Administrative
Science Quarterly 40 (1995): 256–83.
13. D. Tjosvold, “Cooperation Theory and Organizations,”
Human Relations 37 (1984): 743–67.
14. R. Blake, H. Shepard, and J. Mouton, Managing Inter-
group Conflict in Industry (Houston, TX: Gulf, 1954).
15. Beckhard, Organization Development.
16. J. Fordyce and R. Weil, Managing WITH People
(Reading, MA: Addison-Wesley, 1971).
17. E. Neilson, “Understanding and Managing Intergroup
Conflict,” in Organizational Behavior and Admin-
istration, ed. P. Lawrence, L. Barnes, and J. Lorsch
(Homewood, IL: Richard D. Irwin, 1976), 291–305.
18. This application was written and submitted by Marianne
Tracy, who served as the OD practitioner in this case.
19. Blake, Shepard, and Mouton, Managing Intergroup Conflict
in Industry; Bennis, Organization Development; R. Golem-
biewski and A. Blumberg, “Confrontation as a Training
Design in Complex Organizations: Attitudinal Changes in
a Diversified Population of Managers,” Journal of Applied
Behavioral Science 3 (1967): 525–47; W. French and
C. Bell, Organization Development: Behavioral Science Inter-
ventions for Organization Improvement (Englewood Cliffs,
NJ: Prentice Hall, 1978); E. Huse and M. Beer, “Eclectic
Approach to Organizational Development,” Harvard Busi-
ness Review 49 (1971): 103–13; E. Huse, “The Behavioral
Scientist in the Shop,” Personnel 44 (May–June 1965): 8–16.
20. Huse, “The Behavioral Scientist in the Shop.”
21. A. Hubbard, “Cultural and Status Differences in Inter-
group Conflict Resolution: A Longitudinal Study of a
Middle East Dialogue Group in the United States,”
Human Relations 52 (1999): 303–23.
22. Weisbord, Productive Workplaces; M. Weisbord, Discov-
ering Common Ground (San Francisco: Berrett-Koehler,
1993); Bunker and Alban, Large Group Interventions;
H. Owen, Open Space Technology: A User’s Guide
(Potomac, MD: Abbott, 1992); J. Brown, D. Isaacs, and
the World Café Community, The World Cafe: Shaping
Our Futures Through Conversations That Matter (San
Francisco: Berrett-Koehler Publishers, 2005); J. Ludema,
D. Whitney, B. Mohr, and T. Griffin, The Appreciative
Inquiry Summit (San Francisco: Berrett-Koehler, 2003).
23. P. Holman, T. Devane, and S. Cady, The Change Hand-
book, 2nd ed. (San Francisco: Berrett-Kohler, 2007);
R. Axelrod, Terms of Engagement: New Ways of Leading
and Changing Organizations, 2nd ed. (San Francisco:
Berrett-Koehler, 2010); R. Purser and T. Griffin, “Large-
group Interventions: Whole Systems Approaches to
Organizational Change,” in Handbook of Organization
Development, ed. T. Cummings (Thousand Oaks, CA:
Sage Publications, 2007); Bunker and Alban, Large
Group Interventions.
24. B. Bunker and B. Alban, The Handbook of Large Group
Methods (San Francisco: Jossey-Bass, 2006); P. Holman
and T. Devane, eds., The Change Handbook: Group
Methods for Shaping the Future (San Francisco: Berrett-
Koehler, 1999).
25. J. Bartunek, J. Balogun, and B. Do, “Considering Planned
Change Anew: Stretching Large Group Interventions
Strategically, Emotionally, and Meaningfully,” The Academy
of Management Annals 5 (2011): 1–52; Purser and Griffin,
“Large Group Interventions.”
26. L. Bourgeois, “Strategic Goals, Perceived Uncertainty, and
Economic Performance in Volatile Environments,”
320 PART 3 HUMAN PROCESS INTERVENTIONS

Academy of Management Journal 28 (1985): 548–73;
C. West Jr. and C. Schwenk, “Top Management Team
Strategic Consensus, Demographic Homogeneity, and
Firm Performance: A Report of Resounding Nonfindings,”
Academy of Management Journal 17 (1996): 571–76.
27. Weisbord, Productive Workplaces.
28. C. Worley, S. Mohrman, and J. Nevitt, “Large Group
Interventions: An Empirical Field Study of Their Com-
position, Process, and Outcomes,” Journal of Applied
Behavioral Science 47 (2011): 404–31.
29. Bunker and Alban, Large Group Interventions; Purser and
Griffin, “Large Group Interventions.”
30. C. Krone, “Open Systems Redesign,” in Theory and
Method in Organization Development: An Evolutionary
Process, ed. J. Adams (Arlington, VA: NTL Institute for
Applied Behavioral Science, 1974), 364–91; G. Jayaram,
“Open Systems Planning,” in The Planning of Change,
3rd ed., ed. W. Bennis, K. Benne, R. Chin, and K. Corey
(New York: Holt, Rinehart and Winston, 1976), 275–83;
R. Beckhard and R. Harris, Organizational Transitions:
Managing Complex Change, 2nd ed. (Reading, MA:
Addison-Wesley, 1987); Cummings and Srivastva,
Management of Work.
31. Weisbord, Productive Workplaces.
32. Bunker and Alban, Large Group Interventions; Owen,
Open Space Technology; V. Prewitt, “Working in the
Café: Lessons in Group Dialogue,” The Learning
Organization 18 (2011): 189–202.
33. Owen, Open Space Technology.
34. F. Emery and E. Trist, Towards a Social Ecology (New
York: Plenum Publishing, 1973); R. Beckhard and
R. Harris, Organizational Transitions: Managing Complex
Change, 2nd ed. (Reading, MA: Addison-Wesley, 1987);
R. Lippitt, “Future Before You Plan,” in The NTL
Manager’s Handbook (Arlington, VA: NTL Institute,
1983), 38–41.
35. Ludema et al., The Appreciative Inquiry Summit.
36. Weisbord, Discovering Common Ground; Owen, Open
Space Technology; M. Manning and J. DelaCerda, “Build-
ing Organizational Change in an Emerging Economy:
Whole Systems Change Using Large Group Interventions
in Mexico,” in Research in Organization Change and
Development, ed. W. Pasmore and R. Woodman (Oxford:
JAI Press, 2003), 51–98.
37. Purser and Griffin, “Large Group Interventions.”
38. T. Yaeger, P. Sorensen, and U. Bengtsson, “Assessment of
the State of Appreciative Inquiry: Past, Present, and
Future,” in Research in Organization Change and Devel-
opment, ed. R. Woodman and W. Pasmore (Oxford:
Elsevier, 2005), 297–319.
39. Worley, Mohrman, and Nevitt, “Large Group Inter-
ventions.”
40. R. Purser, S. Cabana, M. Emery, and F. Emery, “Search
Conferencing: Accelerating Large-Scale Strategic
Planning,” in Fast Cycle Organization Development, ed.
M. Anderson (Cincinnati, OH: South-Western College
Publishing, 2000); D. Coghlan, “The Process of Change
through Interlevel Dynamics in a Large-Group Interven-
tion for a Religious Organization,” Journal of Applied
Behavioral Science 34 (1998): 105–20.
41. See, for example, the case studies on the AI Commons
website: http://appreciativeinquiry.case.edu.
CHAPTER 11 ORGANIZATION PROCESS APPROACHES 321

S
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LINCOLN HOSPITAL: THIRD-PARTY INTERVENTION*
S
oon after the election of a new chief of sur-
gery, the president of Lincoln Hospital faced
a crisis. Lincoln, a 400-bed for-profit hospital
in the southwestern United States, was
experiencing severe problems in its operating
room (OR). Forty percent of the OR nurses had
quit during the previous eight months. Their
replacements were significantly less experi-
enced, especially in the specialty areas. Fur-
thermore, not all could be replaced; when the
crisis came to a head, the OR was short seven
surgical nurses.
Also, needed equipment often was not avail-
able. On several occasions, orthopedic surgeons
had already begun surgery before they realized
the necessary prosthesis (for example, an artifi-
cial hip, finger joint, or knee joint) was not ready,
or was the wrong size, or had not even been
ordered. Surgery then had to be delayed while
equipment was borrowed from a neighboring
hospital. Other serious problems also plagued
the OR. For example, scheduling problems
made life extremely difficult for everyone
involved. Anesthesiologists often were unavail-
able when they were needed, and habitually
tardy surgeons delayed everyone scheduled
after them. The nursing shortage exacerbated
these difficulties by requiring impossibly tight
scheduling; even when the doctors were ready
to begin, the scheduled nurses might still be
occupied in one of the other ORs.
The surgeons were at odds among them-
selves. Over 30 of them were widely regarded
as prima donnas who considered their own
time more valuable than anyone else’s and
would even create emergencies in order to
get “prime time” OR slots—for which, as
often as not, they were late. Worst of all, how-
ever, the doctors and nurses were virtually at
war. Specifically, Don, the new chief of sur-
gery, was at war with Mary, the veteran OR
director; indeed, he had campaigned on a
promise to get her fired.
Lincoln’s president was faced with a difficult
choice. On the one hand, he needed to satisfy
the physicians, who during the tenure of his pre-
decessor had become accustomed to getting
their way in personnel matters by threatening
to take their patients elsewhere. The market
was, as the physicians knew, increasingly com-
petitive, and the hospital was also faced with
escalating costs, changes in government regula-
tions, and strict Joint Commission on Accredita-
tion of Hospitals standards. Could the president
afford to alienate the surgeons by opposing their
newly chosen representative—who had a large
practice of his own?
On the other hand, could he afford to
sacrifice Mary? She had been OR director for
13 years, and he was generally satisfied with
her. As he later explained,
Mary is a tough lady, and she can be hard
to get along with at times. She also
doesn’t smile all that much. But she does
a lot of things right. She consistently stays
within her budget ….
Furthermore, whereas Don had long been
an outspoken critic of the hospital and was gen-
erally distrusted by its administrators, Mary was
loyal, a strict constructionist who adhered firmly
to hospital policies and procedures:
She is supportive of me, of the hospital,
and of our interests. She doesn’t let the
doctors get away with much. She has
been an almost faultless employee for
years, in the sense that she comes to
work, gets the job done, never complains,
and doesn’t make any waves. I really don’t
understand the reason for the recent pro-
blems. I trust her and want to keep her. It
would be extremely difficult to replace her.
The last point was a key one; a sister hos-
pital had spent almost three years unsuccess-
fully trying to recruit an OR director.
After talking with both nurses and doctors,
the president decided not to fire Mary. Instead,
he told both Mary and Don that they must
resolve their differences. They were to begin
*R. Wayne Boss, University of Colorado; Leslee S. Boss,
Organization Research and Development Associates;
Mark W. Dundon, Sisters of Providence Hospital.
322 PART 3 HUMAN PROCESS INTERVENTIONS

meeting right away and keep on meeting, however
long it took, until they got the OR straightened out.
The results were predictable. Neither party
wanted to meet with the other. Mary thought the
whole exercise was pointless, and Don saw it as a
power struggle that he could not afford to lose. The
president, who wanted an observer present, chose
Terry, the new executive vice president and chief
operating officer. Mary didn’t know Terry very well
so she asked that her boss, the vice president of
patient services, sit in. Don, who “didn’t trust either
Mary or her boss as far as he could throw them,”
countered with a request for a second of his own,
the vice president for medical services. When the
meeting finally occurred, it quickly degenerated into a
free-for-all, as Don and Mary exchanged accusations,
hotly defended themselves, and interpreted any inter-
ventions by the three “observers” as “ taking sides.”
DIAGNOSIS
At this point, Lincoln’s president called me. We
negotiated a psychological contract, where the
president shared the above historical information,
described the problem as he saw it, and identified
his expectations of me and for the project. I, in
turn, articulated my expectations of the president.
We then agreed to take no steps until I had inter-
viewed both Don and Mary.
Later that afternoon, Don expressed his anger
and frustration with the hospital administration
and, most of all, with Mary:
I don’t want to have anything to do with this
lady. She is a lousy manager. Her people can’t
stand to work with her. We don’t have the
equipment or the supplies that we need. The
turnover in the OR is outrageous. The best
nurses have quit, and their replacements
don’t know enough to come in out of the
rain.… All we want is to provide quality patient
care, and she refuses to let us do that. She
doesn’t follow through on things.
He particularly resented Mary’s lack of
deference.
Mary’s behavior is so disgraceful it is almost
laughable. She shows no respect whatsoever
for the physicians.… She thinks she can tell us
what to do and order us around; and I am not
going to put up with it any longer. When I
agreed to take this job as chief of surgery, I
promised my colleagues that I would clean
up the mess that has plagued the OR for
years. I have a mandate from them to do what-
ever is necessary to accomplish that. The docs
are sick and tired of being abused, and I am
going to deal with this lady head on. If we
got rid of her, 95% of our problems would go
away. She has just gone too far this time.
In his cooler moments, Don admitted that
Mary was only partly to blame for the OR’s prob-
lems, but he still insisted she must be fired, if only
to prove to the doctors that the hospital administra-
tion was concerned about those problems, and
that something was being done.
Observation: I am always a bit suspicious
about the objectivity of someone who has
reached the conclusion that someone must
be fired. There is almost always something
else that is going on that requires more
investigation.
Mary was both angry and bewildered. She saw
herself as fair and consistent in dealing with doc-
tors and nurses:
Things had gone relatively well until six months
ago. At that time, some of the ortho-pods
started scheduling surgeries and then canceling
them at the last minute, which, in turn, fouled
up the schedule for the rest of the doctors.
When I called them on it, Don went on a ram-
page. He is the leader of the pack, and now he
has blood in his eyes. I have tried to talk with
him about it, but he won’t listen.
And just as Don’s assessment echoed, in an
exaggerated form, the doctors’ perception of Mary
as an exceptionally strong-willed woman, Mary’s
assessment of Don echoed his reputation among
the orthopedic nurses and hospital administrators,
who feared and distrusted his quick temper and
sharp tongue:
Not only that, but I find his filthy mouth very
offensive. I am not going to cooperate with
SELECTED CASES 323

him when he behaves like that. Nobody else
talks to me that way and gets away with it.
Nobody, I won’t put up with it. As long as he
behaves that way, it is a waste of time to meet
with him. I am sure that I am doing things that
bother him, and I want the OR to run as
smoothly as possible. But there is no way we
can deal with these problems unless we can
sit down and talk about them without being
abusive.
Clearly, both Mary and Don had strong needs
to control other people’s behavior, while remaining
free of control themselves. It is significant that
each used the word abuse to describe the other’s
behavior. They did respect each other’s technical
abilities, but morally, Mary saw Don as “an egotis-
tical jerk,” and he saw her as a “rigid, petty tyrant.”
Neither trusted the other, thus, each was inclined
to misconstrue even unintentionally negative
comments—an especially disastrous state of
affairs in the gossipy environment at Lincoln,
where surgeons, nurses, and administrators were
quick to relay, and amplify, the signals of hostility.
It was obvious from these initial interviews
that Don and Mary were largely contributing to
the OR problems; but it was also obvious that
many others had a stake in the outcome of their
battle. I therefore went on to interview the surgical
head nurses, the vice presidents for patient ser-
vices and medical services, the executive vice
president, the president, and 25 physicians.
The vice presidents and the surgical head
nurses agreed with the president: Mary might not
be the hospital’s most personable manager, but
she was a good one. Her conservative, tenacious,
no-nonsense style had earned the trust of adminis-
trators and the respect of OR nurses, as well as
some physicians. As one nurse asserted: “Good
OR managers are hard to find and certainly Lincoln
is far better off with Mary than without her.”
The doctors, in general, supported Don,
though some of them had reservations. At one
extreme, an anesthesiologist began with a classic
disclaimer:
Now, I want you to know that I don’t have any
problems with Mary, personally. In fact, I really
like her. We have been friends for years, and
we get along just great.
Nevertheless, he was convinced the OR prob-
lems were “100% Mary’s fault. I have no doubt
about that.” Furthermore, although he claimed to
be, as an anesthesiologist, “a completely neutral
third party in this whole business,” he clearly shared
Don’s assumption that Mary’s job as an OR
manager was to keep the surgeons happy:
Her people hate her. She is a lousy manager.
She just can’t work with the MDs. Surgeons
are a rare breed, and there is no changing
them. You have got to get someone in there
who can work with them and give them what
they want.
His conclusion echoed Don’s: “She ought to
be fired, if for no other reason than to prove that
something is being done to address the problems
in the OR.”
Observation: I am always leery of someone
who says, “It is all her fault.” When some-
one is blamed for 100% of the problem, it
usually evidences either denial or a coverup.
There may be a completely innocent party in
an emotionally charged conflict, but I have
never met one. Emotionally charged conflicts
are always power struggles, and it takes two
parties to play that game.
A less enthusiastic partisan, a surgeon who was
a ten-year veteran of the Lincoln OR, was very con-
scious of the way expectations such as those
expressed by Don and the anesthesiologist were apt
to be viewed by others in the medical community:
Quite frankly, I am embarrassed to admit that I
am a surgeon in this town; by doing so, I am
automatically branded as an egotistical dimwit.
With only a few exceptions, those guys are a
group of conceited, narcissistic technicians
who are so caught up with themselves that
they have no clue about what is going on
around them. Some of them are bullies, and
they push the rest of us around because we
don’t have the patient census they do.
His assessment of blame was correspondingly
more moderate than the anesthesiologist’s: “A lot
324 PART 3 HUMAN PROCESS INTERVENTIONS

of people would like you to think that this problem
is one sided, and that Mary is totally responsible
for this mess. But that isn’t true.” And while he
supported Don, whom he described as reasonable
and willing to listen to logic, his principal wish was
to avoid personal involvement: “I am glad he is
fighting this battle. I won’t. The thought of getting
caught between him and Mary scares me to
death.”
This last wish was vividly elaborated by
another surgeon, who also highlighted the general
perception of Mary as a strong personality:
I don’t mess with Mary at all. I’m not stupid.
It’s true that I don’t like some of the things that
she does. Sometimes she is just plain ornery.
But I also am not willing to take her on. In fact,
at this point, I will do whatever she wants,
whenever she wants it. If the other docs are
smart, they won’t mess with her either. They
can talk big in their meetings, but if they have
any sense, they won’t mess with that lady.
She controls too many of the resources I
need to do my job. So far she has been very
helpful, and she has gone out of her way to do
me some favors. I don’t want to mess that up.
I think it is great that Don is willing to take her
on, and I wish him success. That way, if she
wins, it will be him that gets beat up, not me.
The high turnover among OR nurses was a
particularly sore point among the surgeons in gen-
eral, whose frustration was explained by Don:
I don’t think the administration has a clue as to
how urgent this matter really is. It takes at least
five years for a surgical nurse to gain the
necessary skills to be useful. In the last two
months, we have lost some of the best nurses
I have ever worked with in my life. As a result, I
had to start the training process all over again. It
has seemed like I’ve been working with a group
of student nurses! This turnover has cut my
productivity by more than 50%.
Most of the doctors blamed the high turnover
on the nursing managers’ inability to retain quali-
fied personnel, whereas the managers blamed it
on the doctors’ verbal abuse. And in fact, a signifi-
cant number of doctors were widely regarded by
some of their peers as well as by the nurses as
impatient, intolerant perfectionists who demanded
far more of others than they did of themselves.
From the extended interviews, it was obvious
that while Mary had greater credibility with the
hospital administration and Don had more backing
from the doctors, each had a certain amount of
power over the other’s constituency: Mary con-
trolled the surgeons’ working conditions, while
Don controlled a significant portion of the hospital’s
patient flow. The OR problems could not be
resolved without genuine cooperation from both of
them—especially from Don, who was outside the
formal hierarchy of the hospital and could not be
coerced by the president.
I met again privately with each of them to
determine whether they were honestly committed
to improving their working relationship. Both were
skeptical about the possibility of real change but
said they were willing to do everything they could
to help, as long as their own basic values were not
violated. Each defined the kind of help he or she
was willing to accept from me and the circum-
stances under which that help was to be given.
INTERVENTION
Only at this point did actual third-party facilitation
intervention begin. I used a design that included
perception sharing, problem identification, con-
tracting, and follow-up meetings. At their first for-
mal meeting together with me and the three vice
presidents who acted as observers, Mary and Don
began by writing answers to three questions:
1. What does he or she do well?
2. What do I think I do that bugs him or her?
3. What does he or she do that bugs me?
The very process of writing things down was
helpful. It gave them time to get used to this
explicitly confrontational situation before either of
them had a chance to “pop off” at the other, and
it forced an element of rationality into an emotion-
ally charged situation. Also, the questions required
specific answers concerning behaviors, not subjec-
tive generalizations about personalities. Listing
specific behaviors made each of them realize that
at least some of the things they disliked about the
other could be changed.
They then explained these responses orally, in
the order shown in Figure 1. Because of their
SELECTED CASES 325

FIGURE 1
Participant Responses to Three Questions in the Third-Party Facilitation Model
1. What does Mary admire about Don and think he does well?
• He is very concerned about patient care.
• I admire him for his skills as a surgeon. I would have no problem sending a member of
my family to him.
• He is interested and wants to work out issues that we have with each other.
• He can be very gentle and considerate at times.
• He is well respected for his skills by his peers and by the OR nursing staff.
2. What does Don admire about Mary and think that she does well?
• She is honest in her work.
• She has met my needs in orthopedics in getting us the instruments and equipment
we need.
• She has a lot of external pressures on her and she has handled them well.
• She deals well with the various groups that are pulling at her: patients, staff,
administration, physicians.
• She manages the overall picture very well in the OR.
3. What does Don think he does that bugs Mary?
• I am impatient. (Mary agrees)
• I am demanding of personnel in surgery, but everyone can’t always get what they want,
when they want it. (Mary disagrees)
• She is uncertain as to how much I am willing to support her this coming year.
(Mary agrees)
• I am not the best listener. (Mary agrees)
4. What does Mary think she does that bugs Don?
• I don’t listen to him. (Don agrees)
• I appear defensive at times. (Don agrees)
• I respond to some directives in a very detailed manner. (Don agrees)
5. What does Mary do that bugs Don?
• She is difficult to communicate with. I can talk to her, but I am not sure that she is listening.
• She doesn’t assume the responsibility for some specific problems, such as not being
able to do an operation without a full set of prosthesis available.
• She doesn’t effectively manage the personnel that she supervises in OR. Specifically,
there is a great deal of disruption going on. And there are also morale problems,
particularly as they relate to their trust of her and her trust of them in the OR.
6. What does Don do that bugs Mary?
• He generalizes and is not very specific with examples, even when questioned.
• The staff labels him as a whiner, in terms of “nothing is ever right,” his complaining, etc.
This also relates to laying out problems and then walking away.
• He sometimes says one thing but means another—and gives mixed messages.
An explanation of this is my asking him how things are going, he says fine, but
then I find out that he has problems later in the day.
• I do not feel a full measure of support from him, and that bugs me.
• He doesn’t always listen to my concerns.
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326 PART 3 HUMAN PROCESS INTERVENTIONS

mutual hostility, I thought it safer to require that at
first they address their remarks only to the third
party, not to each other. Each, however, was
required to hear the other’s presentation so each
would understand the other’s perceptions. And
because both were guaranteed an uninterrupted
speech, each was more likely to listen to the
other. Taking up the positive perceptions first
helped. As Don later explained:
I was stunned to hear her say those positive
things, particularly the part about me taking
care of her family. For a long time, I had seen
her as my enemy, and I expected only the
worst. I was amazed that she had so much
respect for me. As a result, many of my nega-
tive feelings for her began to leave. It is really
tough to stay angry at someone who says so
many nice things about you. I also found that
I was much more willing to listen to what I do
that bugs her. Somehow, criticism is always
easier to take when it is accompanied by
something positive.
It also helped that before making any accusa-
tions against each other, they were required to
examine their own behavior. As Mary acknowl-
edged, neither had ever taken the time to figure
out specifically how he or she might be causing
problems for the other:
It had never really occurred to me that I may
be doing something that caused Don to react
that way. Vaguely, I suspected that I may be
doing something that he didn’t like, but I was
hard pressed to identify what it was. I really
had to stand back and say to myself, “What
is it that I am doing that is making this work-
ing relationship go sour?” I had spent so
much time concentrating on what he
was doing that bugged me that I hadn’t
looked at myself.
The oral discussion of this question made it
obvious that neither was intentionally causing
problems for the other, making both parties less
hypersensitive to imaginary insults. Also, because
both were much harder on themselves than they
were on each other, the milder criticisms they did
subsequently direct at each other were not nearly
as offensive as they would otherwise have been.
The next step was to identify specific prob-
lems for Mary and Don to address. They wrote
their responses to question three on a sheet of
newsprint, assigning vectors to represent the rela-
tive seriousness of the problem. Some of the most
serious problems could be resolved immediately;
others were going to take longer, but at least Don
and Mary now knew what their priorities had to be.
Finally, it became possible for them to agree
on specific behavioral changes that might help.
Don and Mary each defined what they wanted
from the other and negotiated what they them-
selves were willing to undertake; I moderated the
meeting and wrote down the decisions. (At the
end of the meeting, Don, Mary, and the three
observers each received a copy of these
commitments.) Because Mary and Don were inter-
dependent, either could easily have sabotaged the
other’s efforts. Therefore, in defining each action
item, I reminded them to specify responsibilities
for both parties:
• What will Don (Mary) do to resolve this
problem?
• What will Mary (Don) do to help the other
succeed?
This technique made both parties jointly
responsible for resolving each problem and thus
changed the whole dynamic of the relationship—
from mutual isolation to collaboration, from denial
of responsibility to acceptance of responsibility,
and from a focus on problems to a focus on
solutions.
During the next year, I had four more meetings
with Don, Mary, and the three vice presidents.
Before each meeting, I interviewed each partici-
pant privately. At the beginning of each meeting,
the participants gave general reports on what was
going on, between Mary and Don and in the OR in
general. In particular, I asked the two to list positive
events and specific behaviors on each other’s part
that they appreciated. They then reviewed the
commitments they had made during the previous
meeting. In almost every case, both Mary and Don
had kept these commitments, thus building a basis
of trust for further commitments during the latter
part of the meeting. Where they had not kept the
commitments, plans were made to ensure follow-
through before the next meeting.
SELECTED CASES 327

Questions
1. If you had been called by Lincoln’s presi-
dent to help resolve the problems
described in the case, how would you have
carried out the contracting and diagnosis
stages? What would you have done dif-
ferently than what the OD consultant did?
2. Is third-party intervention an appropriate
intervention in this case? Other possible
OD interventions?
3. How effective was the third-party inter-
vention? Next steps?
328 PART 3 HUMAN PROCESS INTERVENTIONS

S
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s LARGE GROUP INTERVENTIONS AT AIRBUS’ ICT
ORGANIZATION*
A
irbus, an EADS company, is one of the lead-
ing aircraft manufacturers in the world. Its
customer focus, commercial know-how,
technological leadership, and manufactur-
ing efficiency have propelled it to the forefront
of the industry. With revenues of over €38 bil-
lion in 2012 and an industry record backlog of
4,682 aircraft valued at over €523 billion, Airbus
today consistently captures about half of all
commercial airliner orders.
Headquartered in Toulouse, France, Airbus
is a truly global enterprise of some 55,000
employees, with fully owned subsidiaries in the
United States, China, Japan, and the Middle
East; spare parts centers in Hamburg, Frankfurt,
Washington, Beijing, Dubai, and Singapore; train-
ing centers in Toulouse, Miami, Hamburg,
Bangalore, and Beijing; and more than 150 field
service offices around the world round out its
physical footprint. Airbus also relies on industrial
cooperation and partnerships with major compa-
nies all over the world, and a network of some
1,600 suppliers in 30 countries.
This case describes the launch of a trans-
formation process that has taken root in Airbus’
Information and Communication Technology
(ICT) function. ICT is a transnational group of
around 1,300 information system professionals
located wherever Airbus operates. ICT devel-
ops, maintains, and operates—24 hours a
day, 365 days a year—every facet of the infor-
mation systems that enable Airbus’ core busi-
ness processes.
THE CHANGE CHALLENGE
Guus Dekkers joined Airbus as Chief Informa-
tion Officer in June 2008. The organization he
inherited had been split, integrated, and split
again in a series of reorganizations over the pre-
vious seven years. Not surprisingly, he faced a
change-fatigued and cynical ICT workforce.
Moreover, the reorganizations had not produced
the results that Airbus top management was
expecting with respect to time, cost, and quality
objectives in projects or improved productivity in
service delivery.
At the same time, the continuing global
financial and economic crisis along with the
intense competition in the aircraft manufactur-
ing industry resulted in increasing budget pres-
sures, growing business demands, changing
business models, and increasingly disen-
chanted internal customers. The performance
of his function needed to improve significantly
and fast.
In his first year, Dekkers formed a new
executive team with a mix of experienced inter-
nal managers, newcomers from outside Airbus,
and others from outside the aviation industry. He
worked with his new team and a core group of
middle managers to define ICT’s new vision,
mission, and customer-facing transnational orga-
nization (Figure 1). However, he knew that these
changes were only the beginning. It could take
months, or even years, to formulate and imple-
ment the necessary changes.
Dekkers asked Susan Donnan to guide the
implementation process as his internal change
agent. She had the right background, educa-
tion, and experience to facilitate large-scale
change in organizations. She joined Dekker’s
team in July 2009.
THE CHANGE STRATEGY
Working from her belief that high performance
results when all parts of an organization’s design
are aligned, Donnan searched for a change
methodology that would simultaneously recon-
figure design features and engage a critical
mass of organizational members at all levels.
She had studied large group interventions during
her Masters of Science in Organization Develop-
ment (MSOD) degree program at Pepperdine
University. In addition, through her consulting
work, she had experienced a variety of large
group interactive events as a participant, a mem-
ber of a design team, and a member of a logis-
tics team that supported an event. She was
convinced that such an intervention should be
*Susan Donnan, Airbus; Roland L. Sullivan, Sullivan
Transformation Agents Pte. Ltd.
SELECTED CASES 329

a central element of the change methodology. She
considered a variety of these large group methods,
including the Appreciative Inquiry Summit and
Future Search, but was concerned that the current
culture would not support such approaches.
In the end, she selected a process known as
Whole Systems Transformation (WST), a process
developed and refined by Roland Sullivan. Like
other large group interventions, it is designed to
help leaders engage a large, critical, and represen-
tative segment of the organization. It combines
best practices in action research, small group
dynamics, and large group dynamics. Unlike other
large group interventions, it leads with alignment
and transformation of the executive team, then
transforms a critical mass of the organization, and
follows up with efforts to sustain the transforma-
tion. In her experience, Donnan knew too well that
an aligned leadership team was a critical success
factor for transformation. She contracted with
Sullivan to provide external consulting support.
INITIATING CHANGE AT ICT
Phase 1: Contracting with the Leadership
Team
Like most large organizations, Airbus had adopted a
traditional change management approach—top
management announced the change and facilitated
it through extensive communication. To implement
a change strategy that was clearly outside the
organization’s norm, Donnan needed to convince
Dekkers and his team that the traditional approach
would be too slow and produce incremental change
at best.
Her process began by securing executive com-
mitment one-step-at-a-time while painting the pic-
ture for the whole journey. For example, Donnan
presented a roadmap (Figure 2) that outlined the
different milestones for the WST process.
She emphasized that transforming the execu-
tive team into a group with “one brain, one heart”
would be a critical pre-requisite for launching the
“transform the ICT critical mass” phase. Commit-
ting ICT to such a radically different approach was
a leap of faith and a courageous act for the execu-
tive team, especially for Dekkers. The executive
team knew that they would need to learn and
become different leaders to lead the transforma-
tion but they were willing to trust Donnan and
Sullivan to guide them through the process.
She also recommended—because she knew
from previous experience—that the organization
needed to put an infrastructure in place to drive
and support the transformation process. Figure 3
describes the ICT transformation infrastructure
that was agreed to by the ICT executive team to
support the change. Finally, she paid special atten-
tion to ICT’s Human Resource Business Partners.
She was convinced that the HR organization
needed to be fully on board if the change was to be
successful.
FIGURE 1
The New ICT Organization (~2009)
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330 PART 3 HUMAN PROCESS INTERVENTIONS

FIGURE 2
ICT Transformation Roadmap
FIGURE 3
Whole System Transformation Team Organization
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Phase 2: Transform the Leadership Team
ICT’s transformation process began with a two-
and-a-half-day leadership retreat for the executive
team in November 2009 that was jointly facilitated
by Donnan and Sullivan. The retreat aimed to improve
the effectiveness and alignment of the team and to
develop “one brain and one heart” so that the team
members could speak with “one voice.”
In preparation for the retreat, Donnan and
Sullivan conducted ICT manager focus groups and
executive team interviews. Executives were asked
about the key issues in becoming a higher perform-
ing leadership team, helping ICT to become a higher
performing function, thrilling internal customers, and
deserving the role of a trusted business partner. The
focus group and interview data were synthesized
into data reports that were shared with the entire
team prior to the retreat. Dekkers saw the data as
reliable, valid, and rich, and it was used to ensure
that the retreat addressed the right topics. Two
members of the executive team worked with
Donnan and Sullivan to co-design the event, acting
as sounding board and providing valuable feedback.
Three important outcomes were achieved dur-
ing the retreat:
1. Using the feedback in the data reports, the par-
ticipants explored issues of trust within the
team and worked on improving their relationship
with Dekkers and each other. They exchanged
appreciation for each other’s strengths, provided
suggestions for improvements, and made
requests and offers with each other. As a
recently formed executive team, an important
practical outcome of this conversation was
new team norms and meeting ground rules. In
addition, they developed a new annual calendar
with dedicated meetings for operational reviews
and strategic topics. Together, these deliver-
ables had an important and positive impact on
the team’s process effectiveness.
2. In addition to working on their relationships
and team performance, the executive team
visualized and described how ICT would look
when its vision, mission, and strategy were
fully achieved. They identified the priorities to
be addressed to take ICT from where it was to
where they wanted it to be: a trusted business
partner delighting its internal customers. They
agreed on actions and commitments that they
would either personally or collectively perform
to implement the ICT strategy. These included
defining and refining the operating model,
specifying ICT career paths, developing make
or buy strategies with respect to ICT activities,
building sourcing strategies for the ICT supply
chain, and clearly articulating a convergence
strategy to simplify the complex portfolio of
business applications.
3. A final important outcome was the decision to
hold the first two-and-a-half-day ICT summit in
February 2010 with a clearly defined purpose
and set of outcomes. Two members of the
executive team volunteered to be sponsors for
the summit. The summit participants would
represent a carefully selected, diagonal cross-
section or microcosm of ICT with all sub-
functions, all locations, and all levels involved.
The executive team nominated and empowered
a design team of 13 members, representative of
the summit participants, to design the event.
Phase 3: Transform a Critical Mass of ICT
Members
Between November 2009 and February 2010,
Donnan and Sullivan co-facilitated three two-
and-a-half-day sessions with the design team to
plan the summit. In the beginning, the consultants
intentionally allowed the process to be ambiguous.
At times, it was a messy and disruptive process,
an emotional roller coaster for the team’s mem-
bers. However, it was necessary to creating a
safe environment where design team members
could speak openly and directly about the organiza-
tion’s challenges, their fears about the transforma-
tion’s success, and their hopes for the future.
Several design team members were skeptical of
the need for change and did not believe that they
would be empowered. To address this issue, exec-
utive team members participated in the design
sessions at different times, often in two’s or
three’s, to show their support, to give their inputs,
to answer questions, and to give feedback on the
emerging summit design. The design team was
surprised and impressed by the alignment in the
executive team and how much they acted as
one. Over the three-month period, this new group
332 PART 3 HUMAN PROCESS INTERVENTIONS

formed into a high-performing team. They were
motivated and committed to creating an impactful,
memorable, and transformative experience for the
participants.
With Donnan and Sullivan’s guidance, the
team used the following principles to guide the
design of the summit:
• The participants should represent a critical
mass of the ICT organization, including believ-
ers and skeptics of change.
• The design should create a safe place for peo-
ple to speak openly and truthfully by ensuring
that all small group discussions involved a
maximum mix (“max-mix”) of people from dif-
ferent levels and sub-functions, and by ensur-
ing no one in the group was from the same
hierarchy or chain of command. All report-
outs would come from the table as a whole
so no individual would be exposed.
• Table activities, breakout groups, and plenary
sessions should engage each participant’s
“whole brain,” both rational and emotional.
• The purpose and outcomes for each activity
should be defined clearly for participants.
• Allow the large group to alternate between diver-
gent and convergent activities and report-outs.
• Diverse perspectives and the awareness of
multiple realities should be generated through
divergent activities, such as generating ideas,
creating multiple views of today’s frustrations,
or visioning tomorrow’s hopes and dreams.
• Make effective, collective, and integrated deci-
sions through convergent activities, such as
“preferring” (i.e., a voting process) to identify
priorities and expert panels to share views
from customers or senior management.
• Leverage Beckhard’s change formula to drive
change activities in the summit: change is
more likely to occur when the dissatisfaction
with the status quo, multiplied by the vision
of the future, multiplied by the clarification of
first steps is greater than the resistance to
change.
The design team worked long and hard to
define the purpose and outcomes (Figure 4) for
the summit. They debated and deliberated until
everyone on the team was satisfied. Whenever
the team could not agree, they referred back to
the summit’s purpose and outcomes and used
those as “tiebreakers.”
Eventually, the team designed the summit to
take the participants through a process that
FIGURE 4
ICT Summit 2010 Purpose and Outcomes
Purpose:
• The purpose of the summit is to accelerate the continued implementation of our ICT vision and
mission by creating a single team with one mind and one voice, fully engaged and committed
to change—enabling the success of Airbus.
Tangible Outcomes:
• Identified improvement and concrete actions.
• Personal commitment to change (measurable) things.
• Communication and involvement plans to involve and engage the rest of the ICT organization.
• Formal mechanisms to ensure execution/implementation and measurement of success.
Intangible Outcomes:
• Clear understanding and buy-in of the Vision, Mission and Strategy of ICT.
• System wide understanding of operational activities and how we each contribute.
• Increased respect and trust.
• Change in attitude and mindset.
• Commitment to being ICT ambassadors.
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SELECTED CASES 333

mirrored the roller coaster they had experienced
in the event design process. Figure 5 shows the
high-level agenda.
The first day of the summit began with a
dramatic video that was edited just for this event,
featuring the maiden flight of the A380 aircraft. Fol-
lowing the video, Fernando Alonso, who was the
leader of the flight crew for the maiden voyage,
spoke about the importance of trust. He talked pas-
sionately about the confidence he had in the A380
aircraft and its expected performance on that first
flight. He described what it was like having the
world’s attention on them but knowing that the flight
crew would not decide to take off unless every team
member was ready. He shared that ultimately his
trust extended beyond the flight crew to the entire
Airbus organization. No one, at any Airbus meeting,
had ever spoken about emotions, like trust, as the
key to success. Immediately, the participants knew
that the summit was to be unlike any other meeting
they had ever attended.
At the max-mix tables, participants reflected
on the meaning and the implications of Alonso’s
talk on trust. They reflected on and celebrated per-
sonal, team, and ICT achievements over the last 12
to 18 months. Then, after listening to ICT executive
team members describe the vision, mission, and
strategy, participants were encouraged to ask clar-
ifying questions.
For the first time in their history, participants
found themselves having deep and meaningful
conversations sitting face-to-face with their collea-
gues, middle managers, and senior managers. The
executive team, who were equally distributed
among the tables, were coached by the design
team to “trust the process.” They were encour-
aged to listen, be supportive of diverse ideas, and
answer questions directly.
Participants then discussed what was working
well and what was not working well, focusing on
ICT’s mission, operating model, customers, and
people. These strengths and weaknesses were
posted around the room and each participant was
given green and red dots to identify his/her top
three “working” and “not working” focus areas.
The top issues for the group quickly emerged and
“dotting” has since become a favorite means to
arrive at consensus at ICT.
As the last activity of the day, participants
were given the opportunity to pose “elephant”
questions—something that they had always
wanted to ask but were afraid to ask. Next, partici-
pants were invited to write down their feedback for
the day. Finally, Dekkers closed the day with his
reflections. He spontaneously asked participants
to use their green “thumbs up” or red “thumbs
down” signs to indicate how they felt the summit
was going, and he was rewarded with a sea of
green and a few red dots sprinkled around.
Participants continued to socialize and network
in the evening over drinks and dinner with old
friends and new colleagues. Because many of the
FIGURE 5
ICT Summit 2010 High-level Agenda
Day 1 Day 2 Day 3
• Powerful opening
• Purpose and outcomes
• Building table teams
• Achievements
• Vision, Mission and Strategy
• Whole system working and
not working
• Customer view
• Elephant questions
generated
• CIO reflections
• Feedback from Day 1
• Elephant questions answered
• Articulation of success
• Barry Oshry’s top/middle/bottom
• Intergroup breakouts—
(Exec/Mgrs/Non-mgrs)
• Whole system action planning
• Breakouts—Transversal action
planning
• Elephant questions answered
• CIO reflections
• Feedback from Day 2
• Elephant questions
answered
• Breakouts—How to
engage rest of ICT
• System-wide
communication
• Appreciative feedback
• Personal commitments
• CIO inspirational
sendoff
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334 PART 3 HUMAN PROCESS INTERVENTIONS

participants came from around the world and
worked virtually, the time for personal interaction
was appreciated.
The second day of the summit began with the
ICT executive team answering honestly some of
the “elephant” questions developed by the partici-
pants the day before. The participants were both
surprised and satisfied with the openness and will-
ingness of the executives to answer in a spirit of
vulnerability, honesty, and sensitivity.
Working at their tables, participants visualized
what success would look like in five years’ time.
The sharing of their creative presentations of the
“future” was one of the high points of the summit.
With vivid pictures of success and knowledge of
the top issues, they identified actions needed
from the individual, sub-function, and ICT levels to
move ICT to where they would like it to be. This
was breakthrough work. The day ended with
Dekkers’ reflections and participants’ feedback, fol-
lowed by social activities and more networking.
The third day of the summit also began with
answering additional “elephant” questions from
the first day. This was followed by activities to
define ways to engage the rest of the ICT organi-
zation after the summit. The participants agree on
ways to communicate to the rest of the ICT com-
munity going forward. After rounds of appreciative
feedback at the tables, the summit closed with the
ICT executive team making personal commitments
on stage in front of all, for which they received a
standing ovation.
Phase 4: Implement and Sustain the Change
Immediately after the summit, the 300 participants
returned to their offices and acted as ambassadors
for change. At the top of the list was the wish to
communicate the process and the results of the
summit to the rest of the organization. Supported
by communication kits and a web-based e-journal
with photos and videos provided by Donnan, this
occurred in all sub-functions and all locations.
In addition to communication, summit actions
were translated into projects and personal objec-
tives. Examples of projects included: harmonization
and standardization of ICT activities using industry
best practices; understanding these activities’ dri-
vers and costs and measuring their performance;
fighting bureaucracy and streamlining processes;
working with its business partners to drive improve-
ments on demand management and prioritization;
and developing the competencies and careers of
ICT employees.
ICT Executive Team members drove cross-
functional or within function transformation in their
respective groups. The design team volunteered to
stay on as the transformation network. Together
with Donnan, they monitored progress and sup-
ported the executives in driving implementation
of summit actions in their respective functions.
Donnan met monthly with the transformation net-
work to share insights and best practices.
For the next 12 months, ICT Transformation
remained a priority for the executive team.
Many of the transformation projects delivered
bottom-line savings and enabled company objec-
tives. The ICT organization got measurably better
at delivering on its projects, services, and cost pro-
mises. Communication up, down, and across ICT
improved appreciably.
Last but not least, the collaborative approach
to change sent a clear message that transforma-
tion could not be successful without the engage-
ment of ICT employees. Grass roots initiatives and
volunteerism were actively encouraged. People at
all levels felt greater empowerment. For example,
in multiple locations, people chose to become local
change agents and organized local transformation
and social events, some of which continue today.
MAINTAINING THE CHANGE MOMENTUM
Following the success of the first ICT summit,
the (1) align and transform the executive team,
(2) assess and plan the next cycle of change,
(3) align and transform a critical mass of organiza-
tion members, and (4) implement and sustain
change process became institutionalized and has
occurred every year since. A new design team
and a compelling focus from the leadership team
underpins the annual cycle of the process.
For example, the focus for the 2010–2011 cycle
was cross-unit or cross-functional breakthroughs
involving the leadership population of about 200
ICT managers. The theme of the summit was
“Leading as ONE.” The focus of the 2011–2012
cycle was creating an ICT environment that actively
encourages agility, innovation, and leadership. Unlike
previous summits, the third summit did not focus on
SELECTED CASES 335

what was not working or broken; rather it focused
on new way of thinking and working. Participants
learned about design thinking through a simulated
innovation project, explored psychological concepts
that contribute to innovative thinking, and applied
those concepts to four dynamics in the organization:
agility and stability; anticipation and reaction; cus-
tomization and standardization; and innovation and
standardization.
During the months that followed the 2011–2012
summit, ICT dealt with a difficult business challenge
using a collaborative approach that most people
agreed would not have been possible three years
earlier. It received, together with its customers, five
2012 Awards for Excellence, three of which were in
the “Drive Improvement and Innovation” category
and one of these won the Top Award of the Year.
In addition, ICT has made the greatest improve-
ment in employee engagement in the company
over a three-year period as measured by the Gallup
Q12. Through productivity improvements, ICT also
succeeded in handling 25% in volume growth while
maintaining a flat budget in the same period.
ICT’s efforts have made important contribu-
tions to implementing its vision, mission, and strat-
egy. It has achieved operational excellence, a
critical foundation or prerequisite for becoming a
trusted business partner. Going forward, the exec-
utive team would like to evolve ICT’s way of work-
ing: to be better immersed in the business strategy
and business processes of its customers, to better
anticipate their business needs, to focus sharply on
value for Airbus, and to quickly propose and pro-
vide right-sized solutions. The journey continues.
LEARNING
Ever since her MSOD days at Pepperdine, Donnan
had been searching for ways to facilitate system-
wide alignment and to accelerate change. For her,
the WST process has been the most effective
methodology for achieving both. She reflected on
her learning.
• The importance of aligned leadership. Break-
throughs in the ICT executive team enabled
breakthroughs in ICT as a whole. When leaders
speak with one voice, provide a unified direc-
tion in vision and strategy, demonstrate a
sense of urgency, and walk their talk, it gives
organization members the confidence to act in
alignment for the health of the whole. On the
other hand, when leaders are not aligned and
give conflicting directions, this causes conflicts
and confusion that cascades all the way down
the organization.
• The critical roles of the event design team.
The ICT case would not have been a success
without the effective use of the event design
team. In addition to bringing in data from across
the ICT organization and mirroring the organiza-
tion’s current state as part of the design pro-
cess, the event design team members took
an active role in facilitating different modules
in the summit, listening to the participants dur-
ing the summit, synthesizing the participants’
daily feedback, and refining the summit design
based on their feedback. The teamwork within
the team was critical for the smooth execution
of the summit.
• The real work of transformation occurs
between large group interventions. While
many people focus on how a large group
event “releases the magic” of a paradigm
shift, the real work of transformation occurs
after the event or between events in the
“implement and sustain change” phase. ICT
is part of a global organization that has experi-
enced and continues to experience tremen-
dous growth and challenge. Managers are
typically overloaded just running and delivering
today’s business; requests to transform the
business for the future are often overwhelm-
ing. Moreover, saying “no” to lesser priorities
remains difficult for the organization. As a
result, finding the resources and time for trans-
formation remains a challenge. ICT’s experi-
ments with a mix of structured and emergent
approaches yielded two major lessons. First,
do not launch more actions than the organiza-
tion can handle, and second, focus more on
cross-functional improvements that optimize
overall results rather than local maximization.
• The lead and lag indicators of success.
Organization change is a journey that takes
time and requires incredible patience. Follow-
ing a large group interactive event, the lead
indicators of success are team spirit, con-
fidence, commitment, relationships, energy,
336 PART 3 HUMAN PROCESS INTERVENTIONS

trust, inclusiveness, transparency, and align-
ment. These are difficult to measure but can
be felt, observed, and captured in anecdotal
stories. Later, improvement projects lead to
more tangible results, such as behavioral and
engagement changes. However, only when
the improvement projects are successfully
implemented can improved business results
be seen. These are the lag indictors of suc-
cess. Executives and managers must under-
stand that the easy-to-measure lag indicators
of success will come if they recognize, sup-
port, and nurture the difficult-to-measure but
equally valuable lead indicators of success.
Many change initiatives fail because execu-
tives insist on instant results, give up too
soon and move onto the next change.
• Transforming how the organization deals
with change. The ultimate measure of organi-
zation development is the degree to which the
ability to change again is enhanced or dimin-
ished. Without any doubt, the WST process
has helped people in ICT build a change capa-
bility. Realizing that transformation is a journey
and not a destination, ICT people are no longer
paralyzed by change and are more likely to
embrace change as an opportunity rather
than a threat. They have developed greater
capacity and capability to act in aligned ways.
In reflecting on the organization’s journey,
Dekkers said, “Today, our ICT community is
better mobilized and motivated to change.”
• WST needs to be repeated regularly. In
today’s complex, chaotic, and uncertain world,
an organization’s ability to learn and innovate at
the individual, team, and organizational levels
allows the organization to adapt. Change is a
constant and the days of returning to stability or
business-as-usual are gone. To ensure a sus-
tained long-term journey, the WST process
must be repeated to regularly restore whole
system alignment while adapting to internal
and external drivers for change.
In conclusion, each year that the ICT has used
the WST process, it became more and more com-
petent to self-direct and master its own change
process. The organization is becoming better at
doing what it says it will do, more respected by
its customers, and more agile. ICT people is learn-
ing how to learn in real time as an entire function.
Questions
1. What is your analysis and evaluation of the
design of this intervention? What large-group
intervention theories and models were applied
in this case? Do you believe that the interven-
tions made a difference in this organization?
• If your analysis is positive, what do you
think were the critical intervention
features that led to success?
• If your analysis is negative, what changes
would you make in the intervention’s
design or implementation?
2. What do you think of the summit’s agenda and
flow? Do you think the right activities were
planned and executed given the objectives of
the intervention?
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SELECTED CASES

© Pixmann/Imagezoo/Getty Images
PART 4
TECHNOSTRUCTURAL
INTERVENTIONS
12 Restructuring Organizations
13 Employee Involvement
14 Work Design
City of Carlsbad, California: Restructuring the Public
Works Department (A)
The Sullivan Hospital System
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Restructuring Organizations
learning
objectives
Describe the most common organization structures used today and
understand their strengths and weaknesses.
Present the process of downsizing.
Describe and evaluate the reengineering intervention.
I
n this chapter, we begin to examine techno-
structural interventions—change programs
focusing on the technology and structure of
organizations. Increasing global competition and
rapid technological and environmental changes
are forcing organizations to restructure them-
selves from rigid bureaucracies to leaner, more
flexible designs. These new forms of organi-
zing are highly adaptive and innovative, but
require more sophisticated managerial capabilities
to operate successfully. They often result in fewer
managers and employees and in streamlined work
flows that break down functional barriers.
Interventions aimed at structural design include
moving from more traditional ways of dividing the
organization’s overall work, such as functional,
divisional, and matrix structures, to more integrative
and flexible forms, such as process, customer-centric,
and network structures. Diagnostic guidelines help
determine which structure is appropriate for particular
organizational environments, technologies, and
conditions.
Downsizing seeks to reduce costs and
bureaucracy by decreasing the size of the organi-
zation. This reduction in personnel can be accomp-
lished through layoffs, organization redesign, and
outsourcing, which involves moving functions that
are not part of the organization’s core competence
to outside contractors. Successful downsizing is
closely aligned with the organization’s strategy.
Reengineering radically redesigns the organi-
zation’s core work processes to give tighter
linkage and coordination among the different
tasks. This workflow integration results in faster,
more responsive task performance. Reengineering
often is accomplished with new information
technology that permits employees to control and
coordinate work processes more effectively.
12-1 Structural Design
Organization structure describes how the overall work of the organization is divided into
subunits and how these subunits are coordinated for task completion. Based on a contin-
gency perspective shown in Figure 12.1, organization structures should be designed to
fit with at least four factors: the environment, organization size, technology, and
339

organization strategy. Organization effectiveness depends on the extent to which its
structure is responsive to these contingencies.1
Organizations traditionally have structured themselves into one of three forms: func-
tional departments that are task specialized; self-contained divisional units that are ori-
ented to specific products, customers, or regions; or matrix structures that combine both
functional specialization and self-containment. Faced with accelerating changes in com-
petitive environments and technologies, however, organizations increasingly have rede-
signed their structures into more integrative and flexible forms. These more recent
innovations include process structures that design subunits around the organization’s
core work processes, customer-centric structures that focus attention and resources on
specific customers or customer segments, and network-based structures that link the
organization to other, interdependent organizations. The advantages, disadvantages, and
contingencies of the different structures are described below.
12-1a The Functional Structure
The most widely used organizational structure in the world today is the basic functional
structure, depicted in Figure 12.2. The organization usually is divided into functional
units, such as marketing, operations, research and development, human resources, and
finance. This structure is based on early management theories regarding specialization,
line and staff relations, span of control, authority, and responsibility.2 The major func-
tional units are staffed by specialists from those functions. It is considered easier to man-
age specialists if they are grouped together under the same head and if the head of the
department has been trained and has experience in that particular function.
Table 12.1 lists the advantages and disadvantages of functional structures. On the
positive side, functional structures promote specialization of skills and resources by
FIGURE 12.1
Contingencies Influencing Structural Choices
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340 PART 4 TECHNOSTRUCTURAL INTERVENTIONS

grouping people who perform similar work and face similar problems. This grouping
facilitates communication within departments and allows specialists to share their
expertise through standardized processes. It also enhances career development within
the specialty, whether it is accounting, finance, engineering, or sales. The functional
FIGURE 12.2
The Functional Structure
TABLE 12.1
Advantages, Disadvantages, and Contingencies of the Functional Structure
ADVANTAGES
• Promotes and develops technical specialization
• Supports flexibility of deployment and reduces duplication of scarce resources
• Enhances career development for specialists within large departments
• Facilitates communication and performance because superiors share expertise with their subordinates
• Supports the development of common processes
DISADVANTAGES
• Emphasizes routine tasks, which encourages short time horizons
• Fosters narrow perspectives by managers, not business metrics and broader criteria for decision making
• Processes cut across functions, which can make coordination and scheduling difficult (the “white
space” problem)
• Obscures accountability for overall outcomes; managers and employees may not have a line of
sight to the business
• Difficulty developing general management capability
CONTINGENCIES
• Stable and certain environment
• Small- to medium-size
• Routine technology, interdependence within functions
• Goals of efficiency and technical quality
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structure reduces duplication of services because it makes the best use of people and
resources.
On the negative side, functional structures tend to promote routine tasks behaviors
with a limited orientation. Department members focus on their own tasks, rather than on
the organization’s overall value-added processes. This can lead to conflict across functional
departments when each group tries to maximize its own performance without considering
the performances of other units. Coordination and scheduling among departments, often
called the “white space” problem, can be difficult when each emphasizes its own perspec-
tive. As shown in Table 12.1, the functional structure tends to work best in small- to
medium-size firms in environments that are relatively stable and certain, although there
are exceptions. Cisco Systems claims to be one of the largest functionally organized com-
panies in the world. These organizations typically have a small number of products or ser-
vices, and coordination across specialized units is relatively easy. This structure also is best
suited to routine technologies in which there is interdependence within functions, and to
organizational goals emphasizing efficiency and technical quality.
12-1b The Divisional Structure
The divisional structure represents a fundamentally different way of organizing. Also
known as a product or self-contained-unit structure, it was developed at about the
same time by General Motors, Sears, Standard Oil of New Jersey (now ExxonMobil),
and DuPont.3 It groups organizational activities on the basis of products, services, custo-
mers, or geography. All or most of the resources and functions necessary to accomplish a
specific objective are set up as a division headed by a product or division manager. For
example, General Electric has plants that specialize in making jet engines and others that
produce household appliances. Each plant manager reports to a particular division or
product vice president, rather than to a manufacturing vice president. In effect, a large
organization may set up smaller (sometimes temporary) special-purpose organizations,
each geared to a specific product, service, customer, or region. Many organizations use
the divisional structure to expand globally. Samsung Electronics, for example, structures
self-contained business units around particular product groups that are responsible for
their respective products worldwide. Colgate-Palmolive forms self-contained units
around geographic regions with each region responsible for the firm’s products in that
area. A typical division structure is shown in Figure 12.3. It is interesting to note that
the formal structure within a self-contained unit often is functional in nature.
Table 12.2 lists the advantages and disadvantages of divisional structures. These
organizations recognize key interdependencies and coordinate resources toward an over-
all outcome. This strong outcome orientation ensures accountability and promotes cohe-
sion among those contributing to the self-contained unit. These structures provide
employees with opportunities for learning new skills and expanding knowledge because
workers can move more easily among the different specialties within the unit. As a
result, divisional structures are well suited for developing general managers.
Divisional structures do have certain problems. They may not have enough specialized
work to use people’s skills and abilities fully. Specialists may feel isolated from their profes-
sional colleagues and may fail to advance in their career specialty. The structures may promote
allegiance to a specific product, service, customer, or region rather than to the organization’s
objectives. They also place multiple demands on people, thereby creating stress.
The divisional structure works best in conditions almost the opposite of those favoring
a functional organization, as shown in Table 12.2. The organization needs to be relatively
large to support the duplication of resources assigned to the units. Because each unit is
342 PART 4 TECHNOSTRUCTURAL INTERVENTIONS

FIGURE 12.3
The Divisional Structure
TABLE 12.2
Advantages, Disadvantages, and Contingencies of the Divisional Structure
ADVANTAGES
• Recognizes sources of interdepartmental dependencies, reduces complexity
• Fosters an orientation toward divisional outcomes and clients
• Allows diversification and expansion of skills and training
• Ensures accountability by departmental managers and so promotes delegation of authority and
responsibility
• Heightens departmental cohesion and involvement in work
DISADVANTAGES
• May use skills and resources inefficiently: coordination, sharing, and learning across divisions is difficult
• Limits career advancement by specialists to movements out of their departments
• Impedes specialists’ exposure to others within the same specialties; hard to create common processes
• Puts multiple-role demands on people and so creates stress
• Line of sight is to business and may promote divisional objectives over organization objectives
CONTINGENCIES
• Unstable and uncertain environments
• Large-size
• Technological interdependence across functions
• Goals of product specialization and innovation
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designed to fit a particular niche, the structure adapts well to uncertain conditions. Divi-
sional units also help to coordinate technical interdependencies falling across functions and
are suited to goals promoting product or service specialization and innovation.
12-1c The Matrix Structure
Some organization development (OD) practitioners have focused on maximizing the
strengths and minimizing the weaknesses of both the functional and the divisional struc-
tures, and this effort has resulted in the matrix structure.4 It superimposes a lateral structure
that focuses on product or project coordination on a vertical functional structure, as shown
in Figure 12.4. Matrix structures originally evolved in the aerospace industry where chang-
ing customer demands and technological conditions caused managers to focus on lateral
relationships between highly specialized functions to develop a flexible and adaptable system
of resources and procedures, and to achieve a series of project objectives. Matrix structures
now are used widely in manufacturing, service, nonprofit, governmental, and professional
organizations.5
Every matrix organization contains three unique and critical roles: the top manager
(e.g., President or General Manager), who heads and balances the dual chains of com-
mand; the matrix bosses (functional and product or program vice presidents), who
share subordinates; and a few “two-boss” managers, who report to the two different
FIGURE 12.4
The Matrix Structure
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matrix leaders and manage workers deployed to the specific product or program.
In Figure 12.4, only the Software (SW) Manager and Hardware (HW) Manager have
two bosses. The SW and HW team members take their day-to-day direction from the
software and hardware managers but belong to the Engineering function.
Each of these roles has its own unique requirements. For example, functional matrix
leaders are expected to maximize their respective technical expertise within constraints
posed by market realities. Two-boss managers, however, must accomplish work within
the demands of supervisors who want to achieve technical sophistication on the one
hand, and to meet customer expectations on the other. Thus, a matrix organization has
more than its matrix structure. It also must be reinforced by matrix performance man-
agement systems that get input from both functional and project bosses, by matrix lead-
ership behavior that operates comfortably with lateral decision making, and by a matrix
culture that fosters open conflict management and a balance of power.6
Matrix structures, like all organization structures, have both advantages and disad-
vantages, as shown in Table 12.3. On the positive side, they enable multiple orientations.
Specialized, functional knowledge is integrated with a focus on a particular business or
project. New products or projects can be implemented quickly by using people flexibly
and by moving between product and functional orientations as circumstances demand.
Matrix structures allow functional expertise learned in one business or program to be
transferred to another product, program, or business. For many people, matrix structures
are motivating and exciting.
TABLE 12.3
Advantages, Disadvantages, and Contingencies of the Matrix Structure
ADVANTAGES
• Emphasizes cross-functional product or program focus and integration of functional excellence
• Uses people flexibly, because departments maintain reservoirs of specialists
• Permits functional learning to be carried between projects or programs
• Recognizes and provides mechanisms for dealing with legitimate, multiple sources of power in the
organization
• Can adapt to environmental changes by shifting emphasis between project and functional aspects
DISADVANTAGES
• Can be very difficult to introduce without a preexisting supportive management climate
• Conflicts between businesses and functions over methods, resources, priorities is always present
• Increases role ambiguity, stress, and anxiety by assigning people to more than one department
• Without power balancing between product and functional forms, lowers overall performance
• Makes inconsistent demands, which may result in unproductive conflicts and short-term crisis
management
• May reward political skills as opposed to technical skills
CONTINGENCIES
• Dual focus on unique product demands and technical specialization
• Pressure for high information-processing capacity
• Pressure for shared resources
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CHAPTER 12 RESTRUCTURING ORGANIZATIONS 345

On the negative side, these structures can be difficult to manage. To implement and
maintain them requires heavy managerial costs and support. IT managers must deal with
the often conflicting tensions between technical excellence and customer responsiveness.
When people are assigned to more than one department, there may be role ambiguity
and conflict, and overall performance may be sacrificed if there are power conflicts
between functional departments and project structures. People can get confused about
how the matrix operates, and that can lead to chaos and inefficiencies. To make matrix
structures work, organization members need interpersonal and conflict management
skills as well as some tolerance for ambiguity.
As shown in Table 12.3, matrix structures are appropriate under three important
conditions.7 First, there must be real outside pressures for a dual focus. For example, a
matrix structure works well when there are many customers with unique demands, on
the one hand, and strong requirements for technical sophistication, on the other. The
OD practitioner must work with management to determine whether there is real pres-
sure for a dual focus. Managers often agree, without carefully testing the assumption,
that both functional and product orientations are important. Second, a matrix organiza-
tion is appropriate when the organization must process a large amount of information.
Circumstances requiring such capacity are few and include the following: when external
environmental demands change unpredictably; when the organization produces a broad
range of products or services, or offers those outputs to a large number of different mar-
kets; when the relevant technologies evolve quickly; and when there is reciprocal interde-
pendence among the tasks in the organization’s technical core. In each case, there is
considerable complexity in decision making and pressure on communication and coordi-
nation systems. Third, there must be pressures for shared resources. When customer
demands vary greatly and technological requirements are strict, valuable human and
physical resources are likely to be scarce. The matrix works well under those conditions
because it facilitates the sharing of scarce resources. If any one of the foregoing condi-
tions is not met, a matrix organization is likely to fail.
12-1d The Process Structure
A relatively new logic for structuring organizations is to form multidisciplinary teams
around core processes, such as product development, order fulfillment, sales generation,
and customer support.8 As shown in Figure 12.5, process-based structures emphasize lateral
rather than vertical relationships.9 All functions necessary to produce a product or service
are placed in a common unit usually managed by a role labeled a “process owner.” There
are few hierarchical levels, and the senior executive team is relatively small, typically con-
sisting of the chief executive officer, the chief operating officer, and the heads of a few key
support services such as strategic planning, human resources, and finance.
Process structures eliminate many of the hierarchical and departmental boundaries
that can impede task coordination and slow decision making and task performance.
They reduce the enormous costs of managing across departments and up and down the
hierarchy. Process-based structures enable organizations to focus most of their resources
on serving customers, both inside and outside the firm.
The use of process-based structures is growing rapidly in a variety of manufacturing
and service companies. Typically referred to as “horizontal,” “boundaryless,” or “team-
based” organizations, they are used to enhance customer service at such firms as Ameri-
can Express Financial Advisors, Healthways, Johnson & Johnson, 3M, Xerox, and
General Electric Capital Services. Although there is no one right way to design process-
based structures, the following features characterize this new form of organizing:10
346 PART 4 TECHNOSTRUCTURAL INTERVENTIONS

• Processes drive structure. Process-based structures are organized around the three
to five key processes that define the work of the organization. Rather than products
or functions, processes define the structure and are governed by a “process owner.”
Each process has clear performance goals that drive task execution.
• Work adds value. To increase efficiency, process-based structures simplify and
enrich work processes. Work is simplified by eliminating nonessential tasks and
reducing layers of management, and it is enriched by combining tasks so that
teams perform whole processes.
• Teams are fundamental. Teams are the key organizing feature in a process-based
structure. They manage everything from task execution to strategic planning, are
typically self-managing, and are responsible for goal achievement.
• Customers define performance. The primary goal of any team in a process-based
structure is customer satisfaction. Defining customer expectations and designing
team functions to meet those expectations command much of the team’s attention.
The organization must value this orientation as the primary path to financial
performance.
• Teams are rewarded for performance. Appraisal systems focus on measuring team
performance against customer satisfaction and other goals, and then provide real
recognition for achievement. Team-based rewards are given as much, if not more,
weight than is individual recognition.
FIGURE 12.5
The Process Structure
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• Teams are tightly linked to suppliers and customers. Through designated mem-
bers, teams have timely and direct relationships with vendors and customers to
understand and respond to emerging concerns.
• Team members are well informed and trained. Successful implementation of a
process-based structure requires team members who can work with a broad range
of information, including customer and market data, financial information, and per-
sonnel and policy matters. Team members also need problem-solving and decision-
making skills and abilities to address and implement solutions.
Table 12.4 lists the advantages and disadvantages of process-based structures. The
most frequently mentioned advantage is intense focus on meeting customer needs, which
can result in dramatic improvements in speed, efficiency, and customer satisfaction.
Process-based structures remove layers of management, and consequently information
flows more quickly and accurately throughout the organization. Because process teams
comprise multiple functional specialties, boundaries between departments are removed,
thus affording organization members a broad view of the workflow and a clear line of
sight between team performance and organization effectiveness. Process-based structures
also are more flexible and adaptable to change than are traditional structures.
TABLE 12.4
Advantages, Disadvantages, and Contingencies of the Process-Based
Structure
ADVANTAGES
• Clear line of sight focuses resources on customer satisfaction
• Improves speed and efficiency, often dramatically
• Responds to environmental change and customer requests rapidly
• Strong cross-functional collaboration and integration
• Develops broad knowledge and increases ability to see total work flow
• Enhances employee involvement
• Lowers costs because of less overhead structure
DISADVANTAGES
• Changing to this structure can threaten middle managers and staff specialists
• Must learn to balance competing demands for fluidity and efficiency
• Can be difficult to supervise multiple functions, requires changes in command-
and-control mindsets
• Duplicates scarce resources, sharing learnings can be difficult
• Requires new skills and knowledge to manage lateral relationships and teams
• May take longer to make decisions in teams and result in internal focus
• Can be ineffective if wrong processes are identified
CONTINGENCIES
• Uncertain and changing environments
• Moderate- to large-size
• Nonroutine and highly interdependent technologies
• Customer-oriented goals
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A major disadvantage of process structures is the difficulty of changing to this new
organizational form. These structures typically require radical shifts in mindsets, skills,
and managerial roles—changes that involve considerable time and resources and can be
resisted by functional managers and staff specialists. Managers must learn to balance
competing demands for organization fluidity and efficiency.11 Moreover, process-based
structures may result in expensive duplication of scarce resources and, if teams are not
skilled adequately, an overly internal focus and slower decision making as they struggle
to define and reach consensus. Finally, implementing process-based structures relies on
properly identifying key processes needed to satisfy customer needs. If critical processes
are misidentified or ignored altogether, performance and customer satisfaction are likely
to suffer.
Table 12.4 shows that process structures are particularly appropriate for highly
uncertain environments where customer demands and market conditions are changing
rapidly. They enable organizations to manage nonroutine technologies and coordinate
workflows that are highly interdependent. Process-based structures generally appear in
medium- to large-size organizations having several products or projects. They focus
heavily on customer-oriented goals and are found in both domestic and global
organizations.
Application 12.1 describes the process-based structure proposed as part of the struc-
tural change process at Healthways Corporation.
12-1e The Customer-Centric Structure
Closely related to the process-based structure, the customer-centric structure focuses sub-
units on the creation of solutions and the satisfaction of key customers or customer
groups.12 As shown in Figure 12.7, these customer or market-facing units are supported
by other units that develop new products, manufacture components and products, and
manage the supply chain. A variety of organizations, including the Lord Corporation,
Dow, IBM, and Citibank, have implemented these complex structures. Also known as
front–back organizations, these structures excel at putting customer needs at the top of
an organization’s agenda.
Galbraith notes that globalization, e-commerce, and the desire for solutions have
greatly enhanced the power of the customer to demand organizational structures that
service their needs. These new structures highlight the radical differences between
product-focused organizations, like the function or divisional structure, and customer-
centric organizations as shown in Table 12.5. In a product-centric organization, the
goal is to provide customers with the best product possible and to create value by devel-
oping new products and innovative features. Product-centric structures have core struc-
tural features that include product groups and teams that are measured by product
margins. The most central process is new-product development.
Customer-centric structures have a very different look and feel. In a customer-
centric structure, the organization develops the best solution for the customer by offering
a customized bundle of products, services, support, and education. Their core structures
focus attention and resources on customers with market-facing units organized around
large individual customers or customer segment teams that attempt to maximize cus-
tomer profit and loss. These core units are supported by sophisticated customer relation-
ship management processes and integrating mechanisms that link the market-facing
units with the support units.
While any one of these differences may seem obvious, a careful look will show that
the product-centric dimensions represent important and deeply rooted assumptions in
CHAPTER 12 RESTRUCTURING ORGANIZATIONS 349

a
p
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lica
tio
n
1
2
1
HEALTHWAYS’ PROCESS STRUCTURE
H
ealthways Corporation (HC) (www.
healthways.com) is a provider of specialized
disease management services to health
plans and hospitals. In fiscal year 2002,
HC had revenues of $122 million. The company,
founded in 1981 as American Healthcorp
(AMHC), originally owned and managed hospi-
tals. In 1984 it offered its first disease manage-
ment service focused on diabetes. Under the
name Diabetes Treatment Centers of America,
it worked with hospitals to create “centers of
excellence” to improve hospital volumes and
lower costs. After going public in 1991, it offered
in 1993 its first diabetes management program
to health plans—an entirely new customer seg-
ment. This shift in customer base was a key
event in the company’s history, and two new
disease management programs for cardiac and
respiratory diseases were offered in 1998 and
1999, respectively. By 2000, hospital revenues,
once 100% of the company’s mix, had dropped
to 38% as the health plan business grew.
The organization recognized that its cur-
rent structure would not support the expected
growth. As part of its structural change effort,
the initial organization design and development
task force (the ODD group) recommended a
process-based organization structure to the
senior leadership team. The organization was
described in terms of five core processes:
understand the market and plan the business,
acquire and retain customers, build value solu-
tions, deliver solutions and add value, and man-
age the business (Figure 12.6).
• The understand-the-market process was
responsible for scanning AMHC’s external
environment for business opportunities,
trends, regulatory changes, and competi-
tive intelligence. The process also was
responsible for generating new product
ideas, based on their environmental scan-
ning activities, and for developing and driv-
ing the strategic planning process of the
organization.
• Based on the outputs of the understand-
the-market process, the build-value-solutions
process was responsible for translating
business or product opportunities into repro-
ducible products. This included more fully
developing the business case initially identi-
fied by the understand-the-market process,
devising performance metrics, developing
new products and testing them, and creating
marketing materials.
• The acquire-and-retain-customers process
involved the sales and marketing organiza-
tion. It was responsible for finalizing market-
ing materials, identifying new customers,
selling and signing contracts, developing
relationships with key stakeholders, imple-
menting marketing plans, and responding to
requests for proposals.
• The deliver-solutions-and-add-value process
was responsible for delivering on contrac-
tual commitments, managing accounts
and upselling, maintaining product integrity,
and building delivery capacity.
• In the manage-the-business process, the
small corporate headquarters was respon-
sible for human resources, financial gover-
nance, information technology standards,
medical leadership, and corporate image
and branding. It was to act as a shared
services organization supporting the
value-adding process organizations.
Each process was to be staffed with an
appropriate mix of functional experts. The opera-
tional basis of the new organization was a cross-
functional team that could represent the different
perspectives at each stage of the business. For
example, the acquire-and-retain-customers pro-
cess included not only sales and marketing
expertise, but also functional expertise in
account management, information technology,
finance, medical and clinical specialties, and
product development. In recommending that a
core process be staffed with the appropriate
mix of functional expertise, the task force
also suggested that the structure within a
core process be team-based. The acquire-and-
retain-customers process could flexibly organize
cross-functional teams to address a specific cus-
tomer’s requirements and then recombine
resources to pursue a different customer.
350 PART 4 TECHNOSTRUCTURAL INTERVENTIONS

most organizations. Deciding to execute a customer-centric organization is a substantial
undertaking.
As shown in Table 12.6, customer-centric structures have important strengths and
weaknesses. Customer-centric structures present one face to the customer. Divisional
structures, for example, can confuse customers when each division sends its own sales
team. When one team is dedicated to a customer or customer group, it develops a deep
understanding of the customer’s needs, preferences, and industry trends. This knowledge
supports the customization of solutions and helps to build a robust customer-satisfaction
capability.
In terms of weaknesses, customer teams can become too inwardly focused and lose
sight of the larger organization strategy. This can make it difficult to share learning from
successful innovation or customization with the rest of the organization. One of the most
important weaknesses of the customer-centric organization is its reliance on lateral
In addition, appropriate metrics for monitoring
the effectiveness of each process as well as the
relationships between any two processes in the
organization were specified. In terms of effective-
ness metrics, the key outcome for all processes
was customer satisfaction. The acquire-customer
process was judged primarily on the extent to
which it acquired customers and contracts that the
deliver-solutions-and-add-value process believed
could be managed. In terms of relationships, any
new business opportunities identified by the
understand-the-market process required certain
approvals by senior management before being
handed off to the build-value-solutions process.
This “go-no go” decision assured that the organi-
zation had sufficient investment resources to fund
new business or product development and that
good opportunities, not just a lot of opportunities,
were being forwarded to the build-value-solutions
process.
FIGURE 12.6
HC’s Proposed Process Structure
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FIGURE 12.7
The Customer-Centric Structure
TABLE 12.5
Comparing Product-Centric with Customer-Centric Structures
Organizational Feature Product-Centric Customer-Centric
Goal Best product for customer Best solution for customer
Source of value New products, new features Customized bundles of products, services,
support, education, and consulting
Core structures Product teams, product reviews,
product profit centers
Customer teams and segments, customer
P&Ls
Core processes New-product process Customer relationship management
processes and integration/solutions
SOURCE: Adapted from J. Galbraith, Designing the Customer-centric Organization (San Francisco: Jossey-Bass, 2005).
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mechanisms and relationships. To be effective, a customer-centric organization must
have strong lateral capabilities, including information systems, capital allocation pro-
cesses, resource prioritization systems, and the like, to integrate the front and back
end of the organization. Few organizations have developed this capability. Finally,
customer-centric organizations must decide where to put the marketing function. Should
marketing be done by the “front” or “back” of the organization? This is a question not
easily answered.
Customer-centric organizations work best in large organizations, where there are
strong and powerful customer forces in the industry and where technology and market
changes are highly complex and uncertain. In addition, as noted above, the organization
has to have a certain amount of maturity. It is unlikely that an organization can success-
fully implement a customer-centric structure without a strong lateral capability.
12-1f The Network Structure
A network structure manages the diverse, complex, and dynamic relationships among
multiple organizations or units, each specializing in a particular business function or
task.13 Organizations that utilize network structures have been called shamrock organiza-
tions and virtual, modular, or cellular corporations.14 Less formally, they have been
described as pizza structures, spiderwebs, starbursts, and cluster organizations. Some of
the confusion over the definition of a network can be clarified by a typology describing
four basic types of networks.15
TABLE 12.6
Advantages, Disadvantages, and Contingencies of the Customer-Centric
Structure
ADVANTAGES
• Presents one integrated face to the customer
• Generates a deep understanding of customer requirements
• Enables organization to customize and tailor solutions for customers
• Builds a robust customer response capability
DISADVANTAGES
• Customer teams can be too inwardly focused
• Sharing learnings and developing functional skills is difficult
• Managing lateral relations between customer-facing and back office units is
difficult because some processes are split apart
• Developing common processes in the front and back is problematic
• Clarifying the marketing function is problematic
CONTINGENCIES
• Highly complex and uncertain environments
• Large organizations
• Goals of customer focus and solutions orientation
• Highly uncertain technologies
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1. An internal market network exists when a single organization establishes each sub-
unit as an independent profit center that is allowed to trade in services and
resources with each other as well as with the external market. Asea Brown Boveri’s
(ABB) 50 worldwide businesses consist of 1,200 companies organized into 4,500
profit centers that conduct business with each other.
2. A vertical market network is composed of multiple organizations linked to a focal
organization that coordinates the movement of resources from raw materials to
end consumer. Nike, for example, has its shoes manufactured in different plants
around the world and then organizes their distribution through retail outlets.
3. An intermarket network represents alliances among a variety of organizations in dif-
ferent markets and is exemplified by the Japanese keiretsu, the Korean chaebol, and
the Mexican grupos.
4. An opportunity network is the most advanced form of network structure. It is a tem-
porary constellation of organizations brought together to pursue a single purpose.
Once accomplished, the network disbands. Li and Fung is a Hong Kong–based trad-
ing company that pulls together a variety of specialist supplier organizations to
design and manufacture a wide range of products.
These types of networks can be distinguished from one another in terms of whether
they are single or multiple organizations, single or multiple industries, and stable or
temporary.16 For example, an internal market network is a stable, single-organization,
single-industry structure; an opportunity network is a temporary, multiple-organization
structure that can span several different industries.
As shown in Figure 12.8, the network structure redraws organizational boundaries
and links separate organizations or business units to facilitate task interaction. The
essence of networks is the relationships among organizations that perform different
aspects of work. In this way, organizations do the things that they do well. For example,
a firm that is good at selling products might outsource manufacturing to other organiza-
tions that perform that task better than it does. Network organizations use strategic
FIGURE 12.8
The Network Structure
SOURCE: © 1992 by The Regents of the University of California. Reprinted from the California Manage-
ment Review Vol. 34, No. 4. By permission of The Regents.
354 PART 4 TECHNOSTRUCTURAL INTERVENTIONS

alliances, joint ventures, research and development consortia, licensing agreements, and
wholly owned subsidiaries to design, manufacture, and market advanced products, enter
new international markets, and develop new technologies. Companies such as Apple
Computer, Benetton, Liz Claiborne, Nike, and Merck have implemented fairly sophisti-
cated vertical market and intermarket network structures. Opportunity networks also are
commonplace in the construction, fashion, and entertainment industries, as well as in
the public sector.17
Network structures typically have the following characteristics:
• Vertical disaggregation. This refers to the breaking up of the organization’s busi-
ness functions, such as production, marketing, and distribution, into separate orga-
nizations performing specialized work. In the film industry, for example, separate
organizations providing transportation, cinematography, special effects, set design,
music, actors, and catering all work together under a broker organization, the studio.
The particular organizations making up the opportunity network represent an impor-
tant factor in determining its success.18 Increasingly, disintermediation, or the replace-
ment of whole steps in the value chain by information technology—specifically the
Internet—has fueled the development and numbers of network structures.
• Brokers. Networks often are managed by broker organizations or “process orches-
trators” that locate and assemble member organizations. The broker may play a cen-
tral role and subcontract for needed products or services, or it may specialize in
linking equal partners into a network. In the construction industry, the general con-
tractor typically assembles and manages drywall, mechanical, electrical, plumbing,
and other specialties to erect a building.
• Coordinating mechanisms. Network organizations generally are not controlled by
hierarchical arrangements or plans. Rather, coordination of the work in a network
falls into three categories: informal relationships, contracts, and market mechanisms.
First, coordination patterns can depend heavily on interpersonal relationships
among individuals who have a well-developed partnership. Conflicts are resolved
through reciprocity; network members recognize that each likely will have to com-
promise at some point. Trust is built and nurtured over time by these reciprocal
arrangements. Second, coordination can be achieved through formal contracts,
such as ownership control, licensing arrangements, or purchase agreements. Finally,
market mechanisms, such as spot payments, performance accountability, technology
standards, and information systems, ensure that all parties are aware of each other’s
activities and can communicate with each other.
Network structures have a number of advantages and disadvantages, as shown in
Table 12.7.19 They are highly flexible and adaptable to changing conditions. The ability to
form partnerships with different organizations permits the creation of a “best-of-the-best”
company to exploit opportunities, often global in nature. They enable each member to
exploit its distinctive competence. They can accumulate and apply sufficient resources and
expertise to large, complex tasks that single organizations cannot perform. Perhaps most
important, network organizations can have synergistic effects whereby members build on
each other’s strengths and competencies, creating a whole that exceeds the sum of its parts.
The major problems with network organizations are in managing such complex
structures. Galbraith and Kazanjian describe network structures as matrix organizations
extending beyond the boundaries of single firms but lacking the ability to appeal to a
higher authority to resolve conflicts.20 Thus, matrix skills of managing lateral relations
across organizational boundaries are critical to administering network structures. Most
organizations, because they are managed hierarchically, can be expected to have
CHAPTER 12 RESTRUCTURING ORGANIZATIONS 355

difficulties managing lateral relations. Other disadvantages of network organizations
include the difficulties of motivating organizations to join such structures and of sustain-
ing commitment over time. Potential members may not want to give up their autonomy
to link with other organizations and, once linked, they may have problems sustaining the
benefits of joining together. This is especially true if the network consists of organiza-
tions that are not the “best of breed.” Finally, joining a network may expose the organi-
zation’s proprietary knowledge and skills to others.
As shown in Table 12.7, network organizations are best suited to highly complex
and uncertain environments where multiple competencies and flexible responses are
needed. They seem to apply to organizations of all sizes, and they deal with complex
tasks or problems involving high interdependencies across organizations. Network struc-
tures fit with goals that emphasize organization specialization and innovation.
Application 12.2 describes how Amazon.com’s network structure was configured to
align with its strategy and how relationships are managed.21
12-2 Downsizing
Downsizing refers to interventions aimed at reducing the size of the organization.22 This
typically is accomplished by decreasing the number of employees through layoffs, attri-
tion, redeployment, or early retirement or by reducing the number of organizational
units or managerial levels through divestiture, outsourcing, reorganization, or delayering.
TABLE 12.7
Advantages, Disadvantages, and Contingencies of the Network-Based
Structure
ADVANTAGES
• Enables highly flexible and adaptive response to dynamic environments
• Creates a “best-of-the-best” organization to focus resources on customer and
market needs
• Enables each organization to leverage a distinctive competency
• Permits rapid global expansion
• Can produce synergistic results
DISADVANTAGES
• Managing lateral relations across autonomous organizations is difficult
• Motivating members to relinquish autonomy to join the network is troublesome
• Sustaining membership and benefits can be problematic
• May give partners access to proprietary knowledge/technology
CONTINGENCIES
• Highly complex and uncertain environments
• Organizations of all sizes
• Goals of organizational specialization and innovation
• Highly uncertain technologies
©
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356 PART 4 TECHNOSTRUCTURAL INTERVENTIONS

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2 AMAZON.COM’S NETWORK STRUCTURE
A
mazon.com (www.amazon.com) was
launched in mid-1995 as the “Earth’s Big-
gest Bookstore.” It offered more than one
million titles to online buyers, more than
three times the number offered at traditional
bookstores. Since then, it has evolved into a
powerful network structure involving both
other Internet retailers as well as more tradi-
tional retailers, including other bookstores.
Amazon also has expanded into information
services, offering a variety of network services
to firms under the banner Amazon Web
Services. At the center of it all is Amazon’s
massive website, Amazon.com. By pairing
Amazon’s state-of-the-art technology, built-in
traffic, and industry-leading fulfillment and
customer-service processes with its partners’
products and their own strengths, a complex
network of organizations is working together to
make everyone more successful.
The company went public in the first quar-
ter of 1997 riding the dot.com wave. Its reve-
nue grew from $147.8 million in 1997 to over
$61 billion in fiscal year 2012 and is predicted
to exceed $100 billion in 2015. Despite this
impressive sales growth, there has been
increasing pressure to deliver profits, which
occurred for the first time in fiscal year 2002.
From at least one point of view, the develop-
ment of Amazon’s network structure is an
important reason for this profitability.
From the beginning, Amazon operated as a
virtual organization and leveraged its network
structure. For example, it developed and oper-
ated the Amazon.com website to draw in custo-
mers and to learn about creating an effective
online customer experience. However, the com-
pany owned little or no inventory, warehouses,
distribution centers, or customer-service opera-
tions. Early on, order fulfillment was left to
Ingram Book Distributors, one of the largest
book wholesalers, who also contracted out
delivery to third-party vendors, such as UPS.
In June of 1998, Amazon began selling
CDs, and added DVDs and videos in November
1998. It added electronic products, toys, soft-
ware, and video games in 1999, and tools,
health and beauty products, kitchen products,
and photo services in 2000. It also expanded
internationally starting in 1999, opening up
markets in Canada, Europe, and Asia over the
next decade. Amazon’s first West Coast distri-
bution center was built in 1996 and an East
Coast distribution center was added in 1997.
In 1999, in anticipation of the Christmas rush,
Amazon built five warehouse and distribution
facilities and several customer-service centers
to improve its order fulfillment capabilities.
Amazon’s initial forays into a broader net-
work began in 1999 but were compartmental-
ized on the website. Non-Amazon products,
such as used books or individuals auctioning off
different products, were not allowed to infiltrate
Amazon’s millions of book, CD, and DVD pages.
Third-party products were put under “tabs” that
roughly described the kind of commerce to be
conducted, such as the “auction” tab or the
“zShops” tab, which contained a variety of ven-
dor products. Thus, traditional Amazon products
were separated from products offered by others.
Continued profit pressure, however, forced the
organization to look at relationships differently.
Jeff Bezos, company founder and CEO,
stated as follows:
“We realized that what was most important
to the marketplace sellers was demand—
access to prospective buyers. So, the idea
of the “single store” was to give them a
level of access equal to our own—listing
their goods right alongside ours.”
With the “single store” strategy, Amazon.
com transformed itself from an Internet retailer
to a platform for commerce. Small businesses
and individuals, which used to be in the Auctions
or zShops sections, were given the opportunity
to place their products on Amazon’s most visited
sites. In exchange for this visibility, Amazon
developed a contract that included a fee sched-
ule and described the responsibilities and activi-
ties that each organization would perform.
Amazon quickly expanded its network to include
partnerships with large companies as well as
partially- and fully-owned affiliates, gaining over
CHAPTER 12 RESTRUCTURING ORGANIZATIONS 357

In practice, downsizing generally involves layoffs where a certain number or class of
organization members is no longer employed by the organization. Although traditionally
associated with lower-level workers, downsizing increasingly has claimed the jobs of staff
specialists, middle managers, and senior executives especially during the recent economic
turndown.
An important consequence of downsizing has been the rise of the contingent work-
force. In companies like Cisco or Motorola, less expensive temporary or permanent part-
time workers often are hired by the same organizations that just laid off thousands of
employees. A study by the American Management Association found that nearly a
third of the 720 firms in the sample had rehired recently terminated employees as inde-
pendent contractors or consultants because the downsizings had not been matched by an
appropriate reduction in or redesign of the workload.23 Overall cost reduction was
achieved by replacing expensive permanent workers with a contingent workforce.
Few corporations or government agencies have escaped the massive downsizing
brought on by the recent global recession. In the United States, for example, layoffs
reached a yearly peak of over three million workers in 2009; although declining in sub-
sequent years, almost 8% of the workforce was unemployed in 2012.24 In addition to lay-
offs, organizations have downsized by redeploying workers from one function or job to
another. When IBM’s business shifted from hardware to software and services in the
1990s, more than 69,000 people were laid off, yet the size of the total workforce
increased by 16,000 employees.25
two million third-party sellers by 2013. It leveraged its
state-of-the-art transaction-processing systems and
networking capabilities to provide sellers with access
to an immense customer base and rapid, low-cost
sales and order fulfillment. Driven by a “culture of
metrics,” Amazon was able to provide its sellers
with access to unprecedented amounts of real-time
data on customer product preferences and purchas-
ing behavior.
Amazon also engaged in more traditional mar-
keting arrangements where the Amazon.com web-
site served as a marketing vehicle for other
companies. From the Amazon website, users were
transferred over to the vendor’s website and Amazon
received a fee based on the number of customers
exposed to the vendor’s marketing message or on
the number of customers referred. Amazon made
its first set of partnerships with Drugstore.com,
Living.com, and Wine.com among others. As
Amazon affiliates, they paid Amazon placement and
referral fees for advertising on the Amazon website.
This was called the Amazon Commerce Network.
Given the vast scale of the information storage
and computing infrastructure needed to run
Amazon’s marketplace, Amazon Web Services
was launched in 2002 to sell excess infrastructure
capacity as well as information services to other
companies. This logical extension of Amazon’s
network grew rapidly into over 25 proprietary
Web-based services that have attracted over
300,000 developer customers, making Amazon
the market leader in cloud computing worldwide.
Amazon Web Services is expected to have reve-
nue of $3.8 billion in 2013 and could be worth up
to $30 billion if it were a standalone company.
By excelling at particular aspects of retailing in
the Internet environment, Amazon has been able
to leverage those competencies into a powerful
network of alliances and partnerships. It has been
able to expand its business beyond the Internet
marketplace to the information services arena.
The network structure is one important reason
Amazon has been one of the few Internet start-
ups to actually post a profit.
358 PART 4 TECHNOSTRUCTURAL INTERVENTIONS

Downsizing is generally a response to at least four major conditions. First, it is asso-
ciated increasingly with mergers and acquisitions as redundant jobs are eliminated to
gain labor efficiencies. Second, it can result from organization decline caused by loss of
revenues and market share and by technological and industrial change. As a result of fuel
oil prices, terrorism, and other changes, nearly a quarter of U.S. airline jobs were lost in
the first decade of the twentieth century. Third, downsizing can occur when organiza-
tions implement one of the new organizational structures described previously. For
example, creation of network-based structures often involves outsourcing work that is
not essential to the organization’s core competence. Fourth, downsizing can result from
beliefs and social pressures that smaller is better.26 In the United States, there is strong
conviction that organizations should be leaner and more flexible. Hamel and Prahalad
warned, however, that organizations must be careful that downsizing is not a symptom
of “corporate anorexia.”27 Organizations may downsize for their own sake and not think
about future growth. They may lose key employees who are necessary for future success,
cutting into the organization’s core competencies and leaving a legacy of mistrust among
members. In such situations, it is questionable whether downsizing is developmental as
defined in OD.
12-2a Application Stages
Successful downsizing interventions tend to proceed by the following steps:28
1. Clarify the organization’s strategy. As a first step, organization leaders specify cor-
porate strategy and communicate clearly how downsizing relates to it. They inform
members that downsizing is not a goal in itself, but a restructuring process for
achieving strategic objectives. Leaders need to provide visible and consistent support
throughout the process. They can provide opportunities for members to voice their
concerns, ask questions, and obtain career counseling if necessary.
2. Assess downsizing options and make relevant choices. Once the strategy is clear,
the full range of downsizing options can be identified and assessed. Table 12.8
describes three primary downsizing methods: workforce reduction, organization
redesign, and systemic change. A specific downsizing strategy may use elements of
all three approaches. Workforce reduction is aimed at reducing the number of
employees, usually in a relatively short timeframe. It can include attrition, retirement
incentives, outplacement services, and layoffs. Organization redesign attempts to
restructure the firm to prepare it for the next stage of growth. This is a medium-
term approach that can be accomplished by merging organizational units, eliminat-
ing management layers, and redesigning tasks. Systemic change is a longer-term
option aimed at changing the culture and strategic orientation of the organization.
It can involve interventions that alter the responsibilities and work behaviors of
everyone in the organization and that promote continual improvement as a way of
life in the firm.
Case Construction, a manufacturer of heavy construction equipment, used a
variety of methods to downsize in the mid-1990s, including eliminating money-
losing product lines; narrowing the breadth of remaining product lines; bringing
customers to the company headquarters to get their opinions of new-product design
(which surprisingly resulted in maintaining, rather than changing, certain preferred
features, thus holding down redesign costs); shifting production to outside vendors;
restructuring debt; and spinning off most of its 250 stores. Eventually, these changes
led to closing five plants and to payroll reductions of almost 35%.29 The number of
CHAPTER 12 RESTRUCTURING ORGANIZATIONS 359

jobs lost would have been much greater, however, if Case had not implemented a
variety of downsizing methods.
Unfortunately, organizations often choose obvious solutions for downsizing,
such as layoffs, because they can be implemented quickly. This action produces a
climate of fear and defensiveness as members focus on identifying who will be sepa-
rated from the organization. Examining a broad range of options and considering
the entire organization rather than only certain areas can help allay fears that favor-
itism and politics are the bases for downsizing decisions. Moreover, participation of
organization members in such decisions can have positive benefits. It can create a
sense of urgency for identifying and implementing options to downsizing other
than layoffs. Participation can provide members with a clearer understanding of
how downsizing will proceed and can increase the likelihood that whatever choices
are made are perceived as reasonable and fair.
3. Implement the changes. This stage involves implementing methods for reducing
the size of the organization. Several practices characterize successful implementation.
First, downsizing is best controlled from the top down. Many difficult decisions are
required, and a broad perspective helps to overcome people’s natural instincts to
protect their enterprise or function. Second, specific areas of inefficiency and high
cost need to be identified and targeted. The morale of the organization can be hurt
if areas commonly known to be redundant are left untouched. Third, specific actions
should be linked to the organization’s strategy. Organization members need to be
TABLE 12.8
Three Downsizing Tactics
Downsizing Tactic Characteristics Examples
Workforce reduction Aimed at headcount reduction
Short-term implementation
Fosters a transition
Attrition
Transfer and outplacement
Retirement incentives
Buyout packages
Layoffs
Organization redesign Aimed at organization change
Moderate-term implementation
Fosters transition and, potentially,
transformation
Eliminate functions
Merge units
Eliminate layers
Eliminate products
Redesign tasks
Systemic redesign Aimed at culture change
Long-term implementation
Fosters transformation
Change responsibility
Involve all constituents
Foster continuous improvement and
innovation
Simplification
Downsizing: a way of life
SOURCE: K. Cameron, S. Freeman, and A. Mishra, “Best Practices in White-Collar Downsizing: Managing Contradictions,”
Academy of Management Executive 5 (1991), 62.
360 PART 4 TECHNOSTRUCTURAL INTERVENTIONS

reminded consistently that restructuring activities are part of a plan to improve the
organization’s performance. Finally, communicate frequently using a variety of
media. This keeps people informed, lowers their anxiety over the process, and
makes it easier for them to focus on their work.
4. Address the needs of survivors and those who leave. Most downsizing eventually
involves reduction in the size of the workforce, and it is important to support not
only employees who remain with the organization but also those who leave. When
layoffs occur, employees are generally asked to take on additional responsibilities
and to learn new jobs, often with little or no increase in compensation. This added
workload can be stressful, and when combined with anxiety over past layoffs and
possible future ones, it can lead to what researchers have labeled the “survivor
syndrome.”30 This involves a narrow set of self-absorbed and risk-averse behaviors
that can threaten the organization’s survival. Rather than working to ensure the
organization’s success, survivors often are preoccupied with whether additional lay-
offs will occur, with guilt over receiving pay and benefits while coworkers are strug-
gling with termination, and with the uncertainty of career advancement.
Organizations can address these survivor concerns with communication pro-
cesses that increase the amount and frequency of information provided. Communi-
cation should shift from explanations about who left or why to clarification of where
the company is going, including its visions, strategies, and goals. The linkage
between employees’ performance and strategic success is emphasized so that remain-
ing members feel they are valued. Organizations also can support survivors through
training and development activities that prepare them for the new work they are
being asked to perform. Senior management can promote greater involvement in
decision making, thus reinforcing the message that people are important to the
future success and growth of the organization.
Given the negative consequences typically associated with job loss, organizations
have developed an array of methods to help employees who have been laid off. These
include outplacement counseling, personal and family counseling, severance packages,
office support for job searches, relocation services, and job retraining. Each service is
intended to assist employees in their transition to another work situation.
5. Follow through with growth plans. This final stage of downsizing involves imple-
menting an organization renewal and growth process. Failure to move quickly to
implement growth plans is a key determinant of ineffective downsizing.31 For example,
a study of 1,020 human resource directors reported that only 44% of the companies
that had downsized in the previous five years shared details of their growth plans
with employees; only 34% told employees how they would fit into the company’s new
strategy.32 Organizations must ensure that employees understand the renewal strategy
and their new roles in it. Employees need credible expectations that, although the orga-
nization has been through a tough period, their renewed efforts can move it forward.
Application 12.3 describes how the City of Menlo Park, California, successfully
responded to a serious fiscal downturn through effective downsizing initiatives.33 It
demonstrates how straightforward communication and active engagement with key sta-
keholders can inform downsizing decisions, gain commitment to implementing them,
and mitigate their negative consequences. The application also shows the complexity of
downsizing in the public sector where there are often multiple competing interests and
that even a relatively small organization can mount a sophisticated and effective down-
sizing intervention.
CHAPTER 12 RESTRUCTURING ORGANIZATIONS 361

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DOWNSIZING IN MENLO PARK, CALIFORNIA
M
enlo Park is a modest-sized city of
around 32,000 residents located in the
San Francisco Bay area. Like many
California municipalities, Menlo Park ex-
perienced challenging fiscal problems well
before the global economic crisis erupted in
2008. In 2004–2005, the city had an operat-
ing budget of $29.2 million and 230 full-
time equivalent (FTE) employees. Over the
previous four years, Menlo Park was forced to
reduce spending in line with declining revenues.
Sales-tax revenue had dropped about 50% in
two years (from $12 million to $6 million) and
the state of California had diverted local govern-
ment revenue to help balance its budget. Worse
yet, the city’s costs had been rising significantly
primarily because of retiree benefit expenses.
According to Audrey Seymour, the Assis-
tant City Manager at the time, Menlo Park
moved strategically to remedy these fiscal pro-
blems. It trimmed more than $4 million from its
annual operating budget and reduced its work-
force by about 13%, the equivalent of 30 FTEs.
To minimize the negative impact of these
changes on the city and its employees, Menlo
Park’s elected officials and administrators imple-
mented the following downsizing initiatives:
• Involve employees early and often. All-
employee forums were used to communi-
cate to members and to listen to their reac-
tions and suggestions. These meetings
helped everyone clearly understand the
magnitude and causes of the city’s fiscal
problem. Then, action teams were formed
in each city department comprised of
employees from all levels. The teams
were given guidelines and support and
asked to devise plans to streamline opera-
tions, cut costs, and enhance revenues.
The city also used suggestion boxes and
the intranet to solicit ideas from employ-
ees. To keep everyone abreast of what
was occurring, the city manager used
both personal and electronic forms of com-
munication, frequently holding employee
briefings and sending emails. After cuts
were implemented, informal debriefing
sessions were held and counselors from
the city’s employee assistance program
helped employees deal with the impacts
of the changes on their lives.
• Work with unions to achieve common goals.
Cost cutting started with reducing expenses
and eliminating vacant positions, and then
moved to filled positions. The city worked
closely with union representatives to find
ways to avoid layoffs while still reducing
the size of the workforce. The union offered
several ideas and worked with the city to
develop a voluntary separation process that
offered employees in service areas targeted
for reduction early retirement, enhanced
severance, or shorter hours.
• Seek community input. Because the down-
sizing efforts would adversely affect city
services, Menlo Park started an initiative
called “YourCity/YourDecision.” This pro-
gram included sending a survey to commu-
nity households asking residents to rank
order the importance of city services.
From a total of 15,500 households, more
than 1,000 surveys were returned. As a
follow-up to the survey, interactive commu-
nity workshops were conducted across the
city to gain further input into specific ideas
residents would recommend to balance the
budget in line with the priorities identified in
the survey. In addition, each of the city’s
commissions was asked for suggestions
to simplify policies and procedures to save
money. The feedback from all of these out-
reach efforts helped the City Council make
tough choices about which services to fund
and at what level. The information also
guided city staff in developing budget-
balancing strategies.
• Keep elected officials in the loop. City
administrators held a half-day retreat and
a series of meetings with City Council
members to discuss the details of the fis-
cal problems and to get guidance about
high-priority service areas and possible
cost reductions. Council members were
asked to rate city services and these
362 PART 4 TECHNOSTRUCTURAL INTERVENTIONS

12-2b Results of Downsizing
The empirical research on downsizing is mostly negative.34 A review conducted by the
National Research Council concluded, “From the research produced thus far, downsizing
as a strategy for improvement has proven to be, by and large, a failure.” A number of
studies have documented the negative productivity and employee consequences. One
survey of 1,005 companies that used downsizing to reduce costs reported that fewer
than half of the firms actually met cost targets. Moreover, only 22% of the companies
achieved expected productivity gains, and consequently about 80% of the firms needed
to rehire some of the same people that they had previously terminated. Fewer than 33%
of the companies surveyed reported that profits increased as much as expected, and only
21% achieved satisfactory improvements in shareholder return on investment. Another
survey of 1,142 downsized firms found that only about a third achieved productivity
goals. In addition, the research points to a number of problems at the individual level,
including increased stress and illness, loss of self-esteem, reduced trust and loyalty, and
marriage and family disruptions.35
Research on the effects of downsizing on financial performance also shows negative
results.36 One study examined an array of financial-performance measures, such as
return on sales, assets, and equity, in 210 companies that announced layoffs. It found
that increases in financial performance in the first year following the layoff announce-
ments were not followed by performance improvements in the next year. In no case
did a firm’s financial performance after a layoff announcement match its maximum
levels of performance in the year before the announcement. These results suggest that
layoffs may result in initial improvements in financial performance, but such gains are
temporary and not sustained at even prelayoff levels. In a similar study of 16 firms that
wrote off more than 10% of their net worth in a five-year period, stock prices, which
averaged 16% below the market average before the layoff announcements, increased on
data, along with the community survey results,
were used to determine service-area cuts.
Council members also spent time discussing
which criteria were most important to consider
when weighing potential budget cuts. Follow-
up activities included periodic phone calls to
Council members to update them on the
downsizing process and to answer any ques-
tions. This kept members informed in case
they had to respond to questions from employ-
ees, union leaders, or the press. The city also
brought in a panel of experts to give projec-
tions on the regional economy, thus providing
information about what the fiscal future might
hold for Menlo Park. All of these activities
made the difficult decision-making process
and the adoption of the city budget easier.
As a result of these downsizing initiatives,
Menlo Park was able to bring its operations and
spending in line with tough fiscal realities. It did
this in a way that mitigated damage to community
services and to workplace morale. The city was
better able to prioritize community services and
to allocate funds accordingly. Because the down-
sizing process had wide involvement from the
union, City Council, the community, and employ-
ees, the city gained the necessary guidance and
commitment from these stakeholders to make
tough decisions and to continue to deliver on
core community priorities. In the end, Menlo Park
was able to reduce the size of its workforce with-
out having to make any layoffs. It was able to trim
its operating budget without having to reduce
essential community services.
CHAPTER 12 RESTRUCTURING ORGANIZATIONS 363

the day that the restructuring was announced but then began to decline steadily. Two
years after the layoff announcements, 10 of the 16 stocks were trading below the market
by 17–48%, and 12 of the 16 were below comparable firms in their industries by 5–45%.
These research findings paint a rather bleak picture of the success of downsizing.
The results must be interpreted cautiously, however, for three reasons. First, many of the
survey-oriented studies received responses from human resources specialists who might
have been naturally inclined to view downsizing in a negative light. Second, the studies
of financial performance may have included a biased sample of firms. If the companies
selected for analysis had been poorly managed, then downsizing alone would have been
unlikely to improve financial performance. There is some empirical support for this view
because low-performing firms are more likely to engage in downsizing than are high-
performing firms.37 Third, disappointing results may be a function of the way downsiz-
ing was implemented. A number of organizations, such as Florida Power and Light,
General Electric, Motorola, Texas Instruments, Boeing, and Hewlett-Packard, have
posted solid financial returns following downsizing.38 A study of 30 downsized firms in
the automobile industry showed that those companies that implemented effectively the
process described above scored significantly higher on several performance measures
than did firms that had no downsizing strategy or that implemented the steps poorly.39
Several studies have suggested that when downsizing programs adopt appropriate OD
interventions or apply strategies similar to the process outlined above, they generate
more positive individual and organizational results.40 Thus, the success of downsizing
efforts may depend as much on how effectively the intervention is applied as on the
size of the layoffs or the amount of delayering.
12-3 Reengineering
The final restructuring intervention is reengineering—the fundamental rethinking and rad-
ical redesign of business processes to achieve dramatic improvements in performance.41
Reengineering transforms how organizations traditionally produce and deliver goods and
services. Beginning with the Industrial Revolution, organizations have increasingly frag-
mented work into specialized units, each focusing on a limited part of the overall produc-
tion process. Although this division of labor has enabled organizations to mass-produce
standardized products and services efficiently, it can be overly complicated, difficult to
manage, and slow to respond to the rapid and unpredictable changes experienced by
many organizations today. Reengineering addresses these problems by breaking down spe-
cialized work units into more integrated, cross-functional work processes. This streamlines
work processes and makes them more efficient with faster cycle times and better informa-
tion handling capabilities. Consequently, work processes are more responsive to changes in
competitive conditions, customer demands, product life cycles, and technologies.42 Reengi-
neering has been applied to work processes in manufacturing and service industries, in
business firms, not-for-profits, and government agencies; and in diverse global settings,
such as Australia, India, Ireland, Turkey, and South Africa.
As might be expected, successful reengineering requires an almost revolutionary
change in how organizations design their work structures. It identifies and questions the
often-unexamined assumptions underlying how organizations perform work and why do
they do it in a particular way. This effort typically results in major changes in thinking
and work methods—a shift from specialized jobs, tasks, and structures to integrated pro-
cesses that deliver value to customers. Such revolutionary change differs considerably
from incremental approaches to performance improvement, such as continuous
364 PART 4 TECHNOSTRUCTURAL INTERVENTIONS

improvement and total quality management (Chapter 13), which emphasize small, yet
constant, changes in existing work processes. Because reengineering radically alters the
status quo, it seeks to produce dramatic increases in organization performance.
Reengineering seeks to leverage the latest developments in information technology
to enable significant change in large-scale business processes, such as supply-chain logis-
tics.43 It can help organizations break out of traditional ways of thinking about work and
embrace entirely new ways of producing and delivering products. For example, the most
popular software systems, SAP and PeopleSoft, standardize information flows and help
to integrate data on a range of tasks and to link work processes together. On the other
hand, many existing information systems do not provide the data needed to operate inte-
grated business processes.44 Such legacy systems can make reengineering difficult if not
impossible to implement because they do not allow interdependent departments to inter-
face with each other; they often require new information to be entered manually into
separate computer systems before people in different work areas can access it.
Reengineering has been associated with downsizing. Reengineering can result in pro-
duction and delivery processes that require fewer people and fewer layers of manage-
ment. Conversely, downsizing may require subsequent reengineering interventions.
When downsizing occurs without fundamental changes in how work is performed, the
same tasks simply are being performed with a smaller number of people. Thus, expected
cost savings may not be realized because lower salaries and fewer benefits are offset by
lower productivity.
Reengineering also can be linked to transformation of organization structures and
work design. Its focus on work processes helps to break down the vertical orientation
of functional and divisional organization structures. Reengineering identifies and assesses
core business processes and redesigns work to account for key task interdependencies
running through them. That typically results in new jobs or teams that emphasize mul-
tifunctional tasks, results-oriented feedback, and employee empowerment—
characteristics associated with motivational and sociotechnical approaches to work
design (Chapter 14). Regrettably, reengineering initially failed to apply these approaches’
attention to individual differences in people’s reactions to work to its own work-design
prescriptions. It advocated enriched work and teams, without consideration for the
wealth of research that shows that not all people are motivated to perform such work.45
12-3a Application Stages
Early reengineering interventions emphasized identifying which business processes to
reengineer and technically assessing the workflow. Efforts that are more recent have
extended reengineering practice to address issues of managing change, such as how to
deal with resistance to change and how to manage the transition to new work
processes.46 The following application steps are included in most reengineering efforts,
although the order may change slightly from one situation to another:47
1. Prepare the organization. Reengineering begins with clarification and assessment of
the organization’s competitive environment, strategy, and objectives. This effort
establishes and communicates the need for reengineering and the strategic direction
that the process should follow. For example, preparing for reengineering at the U.S.
Veterans Administration (VA) health care system was made easier because everyone
agreed the health care delivery process was broken. Veterans’ groups were outspo-
ken in their complaints of quality care, the system was publicly ridiculed in the
movie The Fourth of July with Tom Cruise, and many patients were figuratively
CHAPTER 12 RESTRUCTURING ORGANIZATIONS 365

“falling through the cracks.” The old way of doing business, reinforced by years of
government protection and a long period of peace, seriously saddled the organiza-
tion with high costs, old systems, and siloed processes.48 The VA’s leadership, led
by Kenneth Kizer, recognized that the keys to the health care system’s success were
low costs and customer satisfaction. Consequently, they set dramatic goals of
increasing patient visits while holding annual cost per patient steady. Defining
these objectives gave the reengineering effort a clear focus.
A final task in preparing the organization is to communicate clearly—through
words and deeds—why reengineering is necessary and the direction it will take.
The VA’s preparation included not only traditional communications through
speeches, newsletters, and meetings, but visible commitments such as reorganizing
the pharmacy organization and making substantial technology commitments to an
electronic medical record system. Thus, senior executives were careful to communi-
cate, both verbally and behaviorally, that they were fully committed to the change
effort. Demonstration of such unwavering support seems necessary if organization
members are to challenge their traditional thinking about how business should be
conducted.
2. Fundamentally rethink the way work gets done. This step lies at the heart of reen-
gineering and involves these activities: identifying and analyzing core business pro-
cesses, defining their key performance objectives, and designing new processes.
These tasks are the real work of reengineering and typically are performed by a
cross-functional design team that is given considerable time and resources to accom-
plish them.49
a. Identify and analyze core business processes. Core processes are considered
essential for strategic success. They include activities that transform inputs into
valued outputs. Core processes typically are assessed through development of a
process map that identifies the three to five activities required to deliver an
organization’s products or services. For a health care system, the core processes
include the intake of patients through the primary care physician, inpatient and
outpatient services, and medical records and billing.
Analysis of core business processes can include assigning costs to each of the
major phases of the workflow to help identify costs that may be hidden in the
activities of the production process. Traditional cost-accounting systems do not
store data in process terms; they identify costs according to categories of expense,
such as salaries, fixed costs, and supplies.50 This method of cost accounting can
be misleading and can result in erroneous conclusions about how best to reduce
costs. For example, most traditional accounting systems suggest that salaries and
fringe benefits account for the largest percentage of total costs—an assessment
that supports workforce downsizing as the most effective way to lower costs. An
activity-based accounting system often reveals a different picture—that rework,
errors, and delays during the workflow are major sources of unnecessary cost.
Business processes also can be assessed in terms of value-added activities—
the amount of value contributed to a product or service by a particular step in
the process. For example, early in the VA’s process, senior managers learned
that only 10% of the patients covered by the VA had a primary care physician.
By assigning a primary care physician to each veteran patient, the total cost of
care was greatly reduced. Patients saw one physician who could address many
issues rather than making multiple visits to a variety of specialists. Conversely,
organizations often engage in a variety of process activities that have little or no
added value.
366 PART 4 TECHNOSTRUCTURAL INTERVENTIONS

b. Define performance objectives. Challenging performance goals are set in this
step. The highest possible level of performance for any particular process is iden-
tified, and dramatic goals are set for speed, quality, cost, or other measures of per-
formance. These standards can derive from customer requirements or from
benchmarks of the best practices of industry leaders. For example, at Andersen
Windows, the demand for unique window shapes pushed the number of different
products from 28,000 to more than 86,000.51 The pressure on the shop floor for a
“batch of one” resulted in 20% of all shipments containing at least one order dis-
crepancy. As part of its reengineering effort, Andersen set targets for ease of
ordering, manufacturing, and delivery. Each retailer and distributor was sold an
interactive, computerized version of Andersen’s catalog that allowed customers
to design their own windows. The resulting design is then given a unique “license
plate number” and the specifications are sent directly to the factory. Four years
later, new sales had tripled at some retail locations, the number of products had
increased to 188,000, and fewer than 1 in 200 shipments had a discrepancy.
c. Design new processes. This task involves designing new business processes to
achieve breakthrough goals. It often starts with a clean sheet of paper and
addresses the question “If we were starting this company today, what is the
most effective and efficient way to deliver this product or service?” Each essen-
tial process is then designed according to the following guidelines:52
• Begin and end the process with the needs and wants of the customer.
• Simplify the current process by combining and eliminating steps.
• Use the “best of what is” in the current process.
• Attend to both technical and social aspects of the process.
• Do not be constrained by past practice.
• Identify the critical information required at each step in the process.
• Perform activities in their most natural order.
• Assume the work gets done right the first time.
• Listen to people who do the work.
An important activity that appears in many successful reengineering efforts
is implementing “early wins” or “quick hits.” Analysis of existing processes
often reveals obvious redundancies and inefficiencies for which appropriate
changes may be authorized immediately. These early successes can help gener-
ate and sustain momentum in the reengineering effort.
3. Restructure the organization around the new business processes. This last step in
reengineering involves changing the organization’s structure to support the new
business processes. This endeavor typically results in the kinds of process-based
structures that were described earlier in this chapter. Reengineered organizations
typically have the following characteristics:53
• Work units change from functional departments to process teams.
• Jobs change from simple tasks to multidimensional work.
• People’s roles change from controlled to empowered.
• The focus of performance measures and compensation shifts from activities to
results.
• Organization structures change from hierarchical to flat.
• Managers change from supervisors to coaches; executives change from score-
keepers to leaders.
The VA’s experience reflects many of these features. As suggested earlier, the key to
a reengineered organization is often its commitment to and development of an
CHAPTER 12 RESTRUCTURING ORGANIZATIONS 367

integrated information system. During the VA’s reengineering, it was an electronic med-
ical record system that integrated nearly every step in the patient care process. The fol-
lowing examples support how the information system radically transformed the way
patient care was delivered:
• A physician gets a computerized reminder that one of his patients in the hospital, a
44-year-old diabetic, is due to have an eye exam. Through the system, the doctor
asks the floor nurse to send the patient to the eye clinic on the second floor, where
an ophthalmologist administers the test. An alert soon flashes on the doctor’s moni-
tor saying the exam has been completed.
• A nurse on a different floor uses the same computer network to make sure she’s
giving the right medication to a 60-year-old patient with high blood pressure. With
a handheld device, she scans a bar-coded bracelet on her patient’s wrist and then a
bar code on the drug bottle. A nearby computer linked to the hospital pharmacy
confirms that she’s giving the right drug to the right patient.
• In the Tele-Health unit, a nurse reads the vital statistics of a 57-year-old patient that
were sent to her computer via an electronic system that the VA has rigged at the
patient’s home. Today the news is worrisome: The patient, who is suffering from
heart disease, has gained three pounds overnight, indicating that he’s retaining
fluids. After a few quick phone calls to the patient and his doctor, the nurse tells
him to double his diuretic medication today. “We caught him before his condition
got worse,” she says with satisfaction.
Application 12.4 describes the reengineering efforts at Honeywell’s Industrial Auto-
mation and Control business. It highlights the importance of mapping current processes
and aligning the rest of the organization to support the change, especially information
technology.54
12-3b Results from Reengineering
The results from reengineering vary widely. Industry journals and the business press reg-
ularly contain accounts of dramatic business outcomes attributable to reengineering. On
the other hand, the best-selling book on reengineering reported that as many as 70% of
the efforts failed to meet their cost, cycle time, or productivity objectives.55 One study
polled 497 companies in the United States and 1,245 companies in Europe, and found
that 60% of U.S. firms and 75% of European firms had engaged in at least one reengi-
neering project. Eighty-five percent of the firms reported little or no gain from the
efforts.56 Despite its popularity, reengineering is only beginning to be evaluated system-
atically, and there is little research to help unravel the disparate results.57
One evaluation of business process reengineering examined more than one hundred
companies’ efforts.58 In-depth analyses of 20 reengineering projects found that 11 cases
had total business-unit cost reductions of less than 5%, whereas six cases had total cost
reductions averaging 18%. The primary difference was the scope of the business process
selected. Reengineering broad value-added processes significantly affected total business-
unit costs; reengineering narrow business processes did not.
Similarly, performance improvements in particular processes were associated
strongly with changes in six key levers of behavior, including structure, skills, informa-
tion systems, roles, incentives, and shared values. Efforts that addressed all six levers pro-
duced average cost reductions in specific processes by 35%; efforts that affected only one
or two change levers reduced costs by 19%. Finally, the percentage reduction in total unit
costs was associated with committed leadership. Similarly, a survey of 23 “successful”
368 PART 4 TECHNOSTRUCTURAL INTERVENTIONS

a
p
p
li
ca
ti
o
n
1
2
4 HONEYWELL IAC’S TOTALPLANT™ REENGINEERINGPROCESS
H
oneywell (www.honeywell.com) is a diver-
sified technology and manufacturing orga-
nization that serves customers worldwide
with aerospace products and services;
control technologies for buildings, homes, and
industry; automotive products; and specialty
materials. Its industrial automation and control
(IAC) business unit in Phoenix, Arizona, is
responsible for the design, manufacture, and
configuration of world-class process control
equipment marketed as the TDC 3000X family
of systems. IAC’s customer base includes
refineries, chemical plants, and paper mills
around the world.
In response to declining performance
results, IAC management set out to implement
an ISO 9000 certified quality program named
TotalPlant™ as part of an effort to optimize
global customer satisfaction. The objectives of
this initiative were reducing defects, minimizing
production cycles, and optimizing resource
management. The TotalPlant™ initiative was a
business process reengineering intervention
based upon four principles: process mapping,
fail-safing, teamwork, and communication.
Cross-functional multiskilled teams were cre-
ated and given responsibility for an entire mod-
ule or product line. Each team member was
then trained in each of the principles and
empowered to enact them to create improve-
ments within their work groups.
Process mapping is a methodology that
converts any business activity into a graphical
form. It creates a common visual language that
can be used to enhance an employees’ ability
to see beyond the boundaries of their work
process. It is also the basis of radical change
in business processes. As part of the Total-
Plant™ initiative, process mapping consisted
of eight major stages.
• The first three stages were to select the
process to be reviewed, identify all custo-
mers, and set the boundaries of the pro-
cess. Through consensus decision making,
these simple steps kept the participants
focused on the process being mapped. In
addition, the team reviewed its composition
to ensure that all appropriate functions were
represented.
• Fourth, the team developed an “as is” map.
This required members to outline and docu-
ment the existing process. By creating a
visual map the team was able to identify
the flow of both the product and the informa-
tion related to the process. Cross-functional
decision points and dependencies became
visually apparent through the process. Fifth,
the “as is” map was used by the team to
calculate cycle times, the elapsed times
between the start of a process and the con-
clusion of a process, as well as the distance
the product travels during that cycle. Both
the mean and the range were calculated
for each process cycle time.
• Sixth, the team identified areas of improve-
ment that did not require additional costs or
resources. Non-value-added steps, extended
approval processes, and processes with
highly variant cycle times were analyzed
and either streamlined or completely elimi-
nated. Following this step, the seventh
stage was to develop a “should be” map
that described the improved process.
• Finally, the eighth step directed the team
to develop a process implementation plan,
establish confirmation from a steering
committee, and then implement it. New
goals were established and results tracked
for each of the process steps.
The second major component of the Total-
Plant™ process was the fail-safing process. Fail-
safing is a five-step process intended to create a
product that is defect free by identifying and
analyzing defects, and understanding their root
causes. A root cause has three characteristics:
(1) it is defined as being the cause of the defect;
(2) it is possible to change the cause; and (3) if
eliminated, the defect will be removed or at
least significantly reduced. Once the root
cause is identified, a set of alternative solutions
CHAPTER 12 RESTRUCTURING ORGANIZATIONS 369

is developed to eliminate the defect in future
products. Each alternative is evaluated for ease of
implementation, cost, and time to implement.
Once a solution is agreed upon, the team imple-
ments the PDCA (Plan, Do, Check, Act) process to
move the solution forward. Planning includes devel-
oping a full implementation plan, which includes
areas impacted, timing, resource requirements, and
costs. This becomes a living document outlining the
action items needed to implement the change.
“Doing” consists of executing against the imple-
mentation plan. Once the new process has been
implemented, the results are “checked” to ensure
that they are in line with the desired results. Finally,
the team must “act” to determine the next steps for
continuous improvement.
Teamwork was the critical third piece of the
TotalPlant™ process. Honeywell realized that the
transition to a team environment needed to happen
gradually. Through the process mapping and fail-
safing process, they gave people real problems to
address and systematic tools with which to solve
them. With the addition of education and training
around teams, these “hard-skill” activities became
the fertile soil for team development. As team
members were asked to own the whole process,
an environment that fosters teamwork was created.
Creativity, innovation, and risk taking were rewarded
and the values of the organization moved to trust,
respect, and empowerment. Managers were
trained to support the teams, not to run them, in
order to further enrich the team environment.
The final and foundational element of the
TotalPlant™ process was communication. Top man-
agement’s successful communication of the Total-
Plant™ paradigm shift was pivotal to the initiative’s
success. Through their everyday actions, top man-
agers lived the values of open communication
throughout the organization. In addition, teams were
given training in conflict resolution, problem solving,
and listening skills to enhance the overall effective-
ness of communication within the teams. The crea-
tion of a positive, open environment became critical
to the success of the change initiative. Top manage-
ment understood that the environment needed to
shift to consistently support teamwork, creativity,
and “new thinking.” The major challenges within the
process took the form of middle-management resis-
tance. The new team concepts made managers, who
had been functional or process experts, move outside
their comfort zone by requiring them to look at pro-
cesses across functions and to broaden their view of
success. Top management was required to move
from command and control to a more facilitative and
empowering approach to support this type of behavior
change.
In addition to the four major components of the
TotalPlant™ process, Honeywell made significant
changes in the technology strategy to support the
business strategy. The information systems group
was converted into an information technology
shop where all technology was developed in direct
support of the ICA business unit and its operations.
All systems were fully integrated to optimize the
timeliness and accuracy of information.
After three years, performance results indi-
cated a reduction in defects of 70%, customer
rejects declined by 57%, and there was a 46%
reduction in inventory investments. Honeywell’s
execution against its vision is what set this busi-
ness process reengineering apart from others.
Top managers did not just speak the vision, they
lived and supported it through active participation
in the entire change process. Another critical com-
ponent was that the organizational structure was
redesigned to align with the new processes and
strategies. Top management at Honeywell under-
stood that change of this magnitude takes time
and therefore was able to set the organization’s
expectations accordingly. Additionally, it commit-
ted appropriate levels of training and financial
resources to make the initiative a success.
The Honeywell case provides some excellent
learning for making a reengineering initiative suc-
cessful. First, people are the key enablers of change.
They must be trained, developed, and rewarded to
support the change process. Second, people must
be able to question all of their assumptions. Nothing
can be sacred as each process is deconstructed and
then rebuilt. Third, process mapping provides people
with a systematic process for analyzing and improv-
ing existing systems and processes. Next, manage-
ment must be able to create dissatisfaction with the
existing process and allow the teams to own the
solution. An environment conducive to change
must be created and supported by management’s
attitudes and behaviors. This includes active partici-
pation at all stages of the process.
370 PART 4 TECHNOSTRUCTURAL INTERVENTIONS

reengineering cases found that they were characterized by a clear vision of the future,
specific goals for change, use of information technology, top management’s involvement
and commitment, clear milestones and measurements, and the training of participants in
process analysis and teamwork.59
SUMMARY
This chapter presented interventions aimed at restruc-
turing organizations. Several basic structures, such as
the functional, divisional, and matrix structures, domi-
nate most organizations. Three newer forms, process-
based, customer-centric, and network-based structures,
were also described. Each of these structures has corre-
sponding strengths and weaknesses, and supportive
conditions must be assessed when determining which
structure is an appropriate fit with the organization’s
environment, strategy, technology, and size.
Two restructuring interventions were described:
downsizing and reengineering. Downsizing decreases
the size of the organization through workforce reduction
or organizational redesign. It generally is associated with
layoffs where a certain number or class of organization
member are no longer employed by the organization.
Downsizing can contribute to organization development
by focusing on the organization’s strategy, using a vari-
ety of downsizing tactics, addressing the needs of all
organization members, and following through with
growth plans. Reengineering involves the fundamental
rethinking and radical redesign of business processes to
achieve dramatic improvements in performance. It seeks
to transform how organizations traditionally produce
and deliver goods and services. A typical reengineering
project prepares the organization, rethinks the way work
gets done, and restructures the organization around the
newly designed core processes.
NOTES
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ability to actively implement and execute against
the plan. By keeping its eye on the end goal,
Honeywell was able to successfully optimize
its customer satisfaction through this process.
CHAPTER 12 RESTRUCTURING ORGANIZATIONS 371

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CHAPTER 12 RESTRUCTURING ORGANIZATIONS 373

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54. This application was written and submitted by Ann
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55. Hammer and Champy, Reengineering the Corporation.
56. CSC Index, “State of Reengineering Report, 1994,”
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374 PART 4 TECHNOSTRUCTURAL INTERVENTIONS

PART 3 HUMAN PROCESS INTERVENTIONS
10 Interpersonal and Group Process Approaches
11 Organization Process Approaches
PART 4 TECHNOSTRUCTURAL INTERVENTIONS
12 Restructuring Organizations