CIPD Podcast 28 - Organisational development

Date: 02/02/09 Duration: 00:17:08

In this podcast Linda Holbeche, Director of Research and Policy at CIPD, Christine Lloyd, Director, People and Organisation Development for Cancer Research UK, James Anderson-Dixon, who works in the Business Services Department of Nationwide, a building society and Martina Platts, who has worked with many companies including PricewaterhouseCoopers and IBM Global Business Services, discuss organisation development and how they are using it to help meet business objectives.


Philippa Lamb: Hello and welcome to the programme where this month we’ll be exploring organisational development. Now although OD is a concept that’s been around for over 50 years there’s still quite a bit of confusion over what exactly it is and how it’s used in people management. So, we’re going to hear from three organisations that have been using OD to facilitate change and improve performance. We’ll be speaking to HR professionals from Cancer Research UK, Nationwide and IBM to get a better understanding of how they’ve used OD in their work.
First off I spoke to Linda Holbeche, she’s the CIPD’s Director of Research and Practice and a leading expert on OD. So how exactly does she define it?
Linda Holbeche: OD is really the development of the organisation as a whole system to create a healthy and effective organisation, so that’s the intent of it. It’s about consciously, deliberately trying to stimulate the conditions in which people can give of their best and the organisation can survive and thrive in its context and it’s a set of processes that are used to bring about change but it’s also very much working with the organisation as it is and trying to build the strengths of the organisation where they exist and also work across some of the internal barriers to performance that exist and try and get the organisation operating through its different parts more effectively.

PL: It’s a big concept to get your arms around isn’t it because it basically covers everything that organisations do because it’s about enhancing performance across the board, about getting the best out of everything that the organisation is there to do, so it’s a daunting thing isn’t it; how do people start with it?

LH: Well it is daunting and, as you say, because it’s holistic and it does really embrace both the human and the strategic aspects of organisations and, therefore, it’s got many complex subsets. At the same time it doesn’t have to be that complicated and, you know, arguably the best OD is where you start where you start as opposed to ‘I wouldn’t start from here’.

PL: So you don’t have to start with some enormous strategy?

LH: No and very much, if you listen to practitioners who are working within organisations as well as consultants who are consulting with organisations from the outside, very often it will be an issue that organisations are trying to fix that then if you just deal with that issue as if it’s something that can be solved in its own right, it’s highly unlikely that you’ll create a sustainable solution. So, almost invariably, wherever you start you can build out and understand how X interacts with Y and, actually, if you’re going to produce a sustainable result you’ve got to work with Y as well and part of that is using some of these more dynamic processes that bring lots of people together to understand this thing connects up with other things, that actually in itself starts to drive the change you want to see and build the capability.

PL: At Cancer Research UK Christine Lloyd, the People and Organisational Development Director, was brought in to head up an OD strategy a few years ago. I asked her why a strategy was needed.

Christine Lloyd: I think the context in which I started working was very much in the context of merger. A couple of years earlier the charity had been formed out of two smaller charities and my remit really was to create one CR UK culture and that’s how I started working within Cancer Research UK. But I think the interesting thing within probably six months what they said was the original remit actually turned out not to be the remit, so the remit originally was help us continue the work we’ve done on the merger and create one single culture. It took me about six months to realise that wasn’t the case and what we needed to do was actually respect the identity of all the diverse cultures and so the OD challenge was to actually keep the cultures as diverse as possible and find the minimum amount of glue that would actually join those cultures together.

PL: By no means an easy remit and a change that was going to take some time to bring about. I asked Christine how long it took for the full impact of the merger to become clear.

CL: The real sort of a hard moment for me, the real insight was about two years in where we did start to get kick back against centralisation and alignment and it suddenly became very clear, having got a certain degree of alignment and consistency, now was the time to let go and to really enable people to go back almost into their own cultural groupings but having had the understanding of the importance of some consistency. But really for the next year or so it was a period of encouraging and valuing diversity and I think that was a really important phase in our development of we value difference. So it’s the minimum amount of glue if you like that can hold the organisation together while still enabling innovation and creativity.

PL: So common goals but lots of autonomy; what next?

CL: I think now our next stage of our strategy is integration and this is what I mean about the oscillating nature of the OD work that we’ve been doing. People have gone into more functional areas, the next stage is now to regionalise a lot of our work into what we’re calling Cancer Research Centres and we’re quite London centric at the moment. We will have 20 centres around the country and if I just take one example, if I take Manchester. The idea of a centre is that we’ve have an NHS Trust, we’d have the research department of a university and we’ve have the Cancer Research fundraising and scientific work all happening on the same site.

PL: So this is devolution in a very big way.

CL: Yes and I think my challenges, certainly at the moment, is the constant tensions between centralisation and devolution.

PL: At Nationwide they’ve been using OD to try and encourage a healthy attitude towards change. James Anderson-Dixon is the Organisational Development Manager there and he’s been part of a team implementing a wellness management programme to help people to do this. So how effective has it been so far?

James Anderson-Dixon: The department itself has gone through (and is continuing to go through) a lot of change and trying to help people to remain positive during that change has been really really difficult and we’ve used this particular approach to help people to understand the impact that change is going to have on them individually and also how they can better manage and deal with change as it occurs. Off the back of the wellness programme we also developed a programme specifically to help people to manage change much more effectively and that’s gone down really well as well. 

PL: What sort of change are we talking about?

JA-D: It’s structural change within the departments, it’s the changes of roles and responsibilities that have been designed by my colleagues on the senior management team and these changes are driven by the need to be much more efficient and much more effective. I mean those are the kind of buzz descriptions at the moment but it’s very much about organisational effectiveness. It’s really tailored to help people to more effectively deal with change, to respond to changes in their roles and responsibilities and their sense of being, their sense of identity, which ultimately that can have an impact on as well.

PL: So what have they been doing to help employees through the change?

JA-D: We’ve set up a variety of different communities of practice, so these are virtual environments where we encourage people to basically share their learning. One of the things that the head of the department has been instrumental in doing is actually taking some of our suppliers, who actually in the big wide world are competitors, putting them in together and actually encourage them then to collaborate and that’s been a real, real challenge and actually one of our greatest successes.

PL: How have they responded to that?

JA-D: Initially some of them were very sceptical, weren’t quite sure what we were trying to achieve and we now have a collective of about six suppliers who as I mentioned out in the big wide world competitors but we’ve brought them together and they’re collaborating in a way that they themselves wouldn’t have believed with stuff that some organisations would view as kind of commercially sensitive. What they began to learn very very quickly, within about 18 months to two years, that actually retaining knowledge is about power and control, sharing it is about liberation and it’s made such a powerful difference to the effectiveness of this particular group of organisations and therefore the service that we actually provide to Nationwide and our stakeholders.

PL: A great example there of how OD is being used to positively change behaviour, encourage new approaches to business practices and produce real commercial benefits as well.
Martina Platts leads a division within Human Capital Management at IBM.

Martina Platts: We do the kind of what I would call the traditional organisation development, so there is a big change going on in a company, given that I work for IBM, a lot of these changes will be large systems that are being implemented or outsourcing, moving work from the company to IBM so there will be organisation development services around that. Then the other bit that is probably more specific to the people that I work with on a day to day basis is what we call transformation workforce management, so it’s basically how can we manage our workforce and our people to be the most productive and value adding and efficient for the business overall?

PL: If I’m understanding you rightly, you take a pretty structured approach to OD in a sense that you look at what you’ve got in terms of people and objectives and you prioritise and then it’s presumably a question of putting in place particular solution depending on which area you’re dealing with. But if I was one of your seven thousand people around the world, what would I experience as part of this whole process?

MP: It’s a good question. IBM is American owned, it’s a global company the way it operates but it’s an American company. We’re quoted on the stock exchange, we have quarterly results that we have to deliver against and I suppose my approach to OD or my job generally is it’s driving towards those very hard specific business measurements so it’s a mix of that along with well, you know, it is only about the people that we’ve got in our business or my part of the business and therefore if I don’t encourage them and motivate them, make them feel that they want to work in the culture. I suppose the performance orientated, it is quite a numbers and targets driven culture so people have to be the kind of people that really would like to work in that kind of organisation.

PL: Yes it’s a task orientated environment isn’t it? People know what they have to do, they go out and do it and they’re rewarded accordingly.

MP: And they’re rewarded accordingly, yeah, I mean I’m sure some people would kind of wince at describing it in that way and task orientated but yeah I think it is. You know, drum beats are provided to us on kind of targets on a very regular basis and therefore I have to organise around those things.

PL: So OD can be used in very different ways in organisations from facilitating major change to driving better performance but should it be seen as a one-off solution designed to solve a particular problem? Here’s James Anderson-Dixon at IBM. 
Is this an ongoing process or a closed ended project?

JA-D: Another good question. It’s very much an ongoing process because not only is change a constant but we’ve got to constantly deal with the changes that constantly come our way. It is what I would say is an emerging and never ending process.

PL: Here’s Linda Holbeche.

LH: It’s something that should be ongoing. It should be sort of built into the DNA of strategy really. How can we, whatever we want to do as organisation, how can we build our capability to deliver that? How do we need to have people interacting? How do we need to make sure that information flows appropriately and so on? And change, change management – which is sort of what you were alluding to – is a set of interventions that fit within that broader system. The challenge is that most people don’t take an OD approach, they’re not looking at building the organisations’ capabilities on an ongoing basis so then change management becomes like, in reality, it’s an interruption to business as usual as opposed to being part of business as usual where you know the kind of change you’re trying to bring about.

PL: As with any people management programme, demonstrating delivery against a strong business case is vital in maintaining the backing of senior managers. I asked Christine Lloyd how she does that at Cancer Research UK.

CL: Measurement is an interesting topic, as I think it is for all organisations. How do we measure? Obviously the amount of funds coming in is one of our measures or can we really persuade the public that we are making those scientific breakthroughs and so the amount of money we raise is all of the measures. A bit of a crude one but it’s an important one and we’ve grown double digit growth now for the last five years since the merger in 2002. Even in the current downturn, yes we’re predicting stabilisation of that but we’re not predicting huge shortfalls. We do believe that the general public see us as successful, have confidence in us and have trust in us, so I think our revenue is one of the major measures.

PL: It sounds as if this has been extremely successful so far and I take it it’s an ongoing process that will never come to a close.

CL: It’s certainly an ongoing process. Success in terms of the external world, we will be tested in the current downturn and we’re under no illusions, we know it will be much much harder to raise the money that our scientists are dependent on for the medical breakthroughs. Internally success absolutely now that my main measure might sound a strange one but it’s worked in all my organisations. It’s when I go into an organisation and people don’t understand what OD is but within hopefully (my timescale’s usually about three years to get to this state) three years I then have line managers telling me that this particular activity is an OD activity and that is my real measure, when line managers are saying we need the OD team in here or I’m thinking of doing this and it’s part of an organisational development strategy and I hear that language coming from them, that is my measure internally.

PL: For more information you can go to the OD factsheet on the CIPD website and there’ll be a lot more on OD at the CIPD’s annual HRD conference this April, including an all-day master class led by two experts from the US.
Next month we’ll be doing a redundancy special. We’ll be looking at the practical processes involved as well as how to go about managing the fallout and minimising the negative impacts. As well as a team of experts we’ll hear from HR professionals with direct personal experience of making redundancies. Until then, goodbye. 


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