Tuesday, June 23, 2009

OD Models to Support the Transformational Change Process


Abstract
This literature review examines various OD methodologies to select the most appropriate given the characteristics of the change process, the organization’s culture, and the strengths and areas of opportunity identified. The analysis reviews different OD models and tools for the entire OD process, starting with the entry and contracting phase, to continue with the organizational diagnosis phase, later, the selection of the OD intervention, and lastly the evaluation of impact and results phase.

Organizational development
OD aims at improving the results at the organization, group and individual levels. Robbins (2003), states that OD should increase performance at organizational and individual levels “OD… it’s a term used to encompass a collection of planned-change interventions built on humanistic-democratic values that seek to improve organizational effectiveness and employee well being” (p. 566).

French and Bell (1999), provide a more comprehensive definition that includes the role of top management, and the use of applied behavioral science methodologies and tools to improve the organization’s ability to visioning, empowering, learning and solving problems. “Organizational development is a long-term effort, led and supported by top management, to improve an organization’s visioning, empowerment, learning, and problem-solving processes, through an ongoing, collaborative management of organizational culture –with special emphasis on the culture of intact work teams and other team configurations –using the consultant-facilitator role and the theory and technology of applied behavioral science, including action research” (p. 25-26).

Another important consideration when implementing OD interventions is to attend two important, yet complementary perspectives: the task and the process. French and Bell examine three different models for managing OD interventions: Burke’s seven phase model which includes activities for the entry, contracting, and diagnosis, feedback, planning change, intervention, and evaluation phases.

Cummins and Worley emphasize the identification of key ingredients of successful change efforts, and describe a five phases model to effectively managing change processes “1) motivating change, 2) creating a vision, 3) developing political support, 4) managing the transition, and 5) sustaining momentum. Lastly, the authors analyzed the change management handbook developed by Berger, Sikora, and Berger for better aligning the organization’s socio-technical elements. The authors consider the process of managing change as the continuous alignment of the organization with the market to be more effective than competitors: “Aligning is the continuous synchronization of four key management levers –strategy, operations, culture, and reward” (p. 124).

Entry and contracting
Any OD intervention should clearly define the intervention’s goals, scope, and main expectations of key stakeholders. Lippitt and Lippitt (1986) describe six phases to effectively manage the entry and contracting phase in a consultant-client working relationship; “1) Engaging in initial contact and entry, 2) formulating a contract and establishing a helping relationship, 3) Identifying problems through diagnostic analysis, 4) setting goals and planning for action, 5) taking action and cycling feedback, and 6) competing the contract (continuity, support, and termination)” (p.11). Instead of offering a step-by step process,

French and Bell (1999) emphasize that contracting is repetitive, continually renewable, and should cover the psychological and financial aspects. Moreover, the authors suggest clarifying and agreeing on the intervention’s conditions, ground rules, deliverables, and price. Additionally, to ensure a successful consultant-client relationship, the authors suggest paying particular attention to trust issues, and five ethical dilemmas: “(1) Misrepresentation and collusion, (2) misuse of data, (3) manipulation and coercion, (4) value and goal conflicts, and (5) technical ineptness”. (p. 266). The analysis of information suggests paying special attention to the clarification of goals, and expectation in any OD intervention, furthermore, given the high visibility of the client, and the recent public scandals, any consultant-client relationship must address trust issues and ethical dilemmas.

Organizational diagnosis and assessment
Literature suggests identifying the most appropriate models and tools to conduct the organizational diagnosis and assessment. Harrison and Shirom (1999) propose the use of the sharp-image diagnosis to examine the organization as a whole, and later focusing on specific areas or issues. “…practitioners of sharp-image diagnosis start with a broad scan of an organization but then select core problems and organizational challenges for a close up examination” (p. 18).

Additionally, the authors emphasize on the need to use the open systems (OS) framework to guide the initial phases of the organizational diagnosis, and then move to a specific areas of analysis. The OS frame which includes various components -inputs, outputs, systems processing, the environment, structure, culture, and systems dynamics, may be applied at organization, group and individual levels. “The OS framework can help practitioners of diagnosis develop a broad overview of the focal organization and its challenges” (p. 48). Furthermore, Harrison and Shirom (1999) encourage the need to conduct targeted assessments to further findings of the organizational diagnosis. “…the term assessment refers to more narrowly focused examinations, whereas diagnosis is reserved for the preliminary stage of diagnosing basic problems and challenges” (p. 183).

OD interventions
An articulated OD intervention should address key issues identified during the diagnosis phase, and should be consistent with the organization’s culture and objectives. Schein (1992) sustains that the analysis of organizational culture is a prerequisite to implement successful OD interventions “Organizational learning, development, and planned change cannot be understood without considering culture as the primary source of resistance to change” (p.xiv).

Moreover, Schein emphasizes that planned change processes must be managed by the top, highlighting the attention of power issues, and the management of the organizational subcultures. “Much of the work of organizational development practitioners deals with knitting together diverse and sometimes warring subcultures, helping leaders, the dominant coalition, or the whole managerial subculture client figure out how to integrate constructively the multiple agendas of different groups” (p. 316). Additionally, the author mentions that leaders play an important role to embed their assumptions on a work group, and therefore in the creation of a new culture. He sustains that in mature organizations, people start reflecting on what has worked in the past instead of the primary agenda of the leader.

Furthermore, to effectively manage a cultural change, Schein suggests working on six mechanisms to embed the leader’s assumptions on the organizational culture. These six elements are: 1) the areas where leaders pay attention to and reward, 2) how the leader allocate resources, 3) the modeling behavior, 4) how the leader deals with critical incidents, 5) the criteria the leader use for recruitment, selection, promotion, and 6) the way a leader communicates.

Additionally, and contrary to common organizational practices, Schein suggests to focus on secondary mechanisms to reinforce the desired culture, among them the following: 1) the organization design, and structure, 2) the organizational systems and procedures, 3) the organizational rites and rituals, 4) the design of physical space, facades, 5) the stories, legends, and myths about people and events, and 6) the formal statements of organizational philosophy, values, and creed. Additionally, to the understanding of organizational culture, OD interventions should use specific OD models and tools to manage resistance, engage key stakeholders, and develop internal capabilities.

Bridges (1991, 2003) provides useful advice to manage the period of uncertainty in any change process. He advocates the management of the transition process, the “three-phased process that people go through as they internalize and come to terms with the details of the new situation that the change brings about” (p. 3). Strebel (1996) considers that most change initiatives lack the attention of personal compacts: the reciprocal obligations and commitments made by employees and organizations.

The author classify personal compacts in three dimensions: formal dimension, which relates to the understanding of new functions and responsibilities, the psychological dimension, which addresses elements of mutual expectation and reciprocal commitment, and the social dimension which relates to the alignment of stated values and mission and the company’s practices and management’s attitudes towards them.

Literature analysis for OD interventions at organizational and group levels, also indicate the need to implement a collaborative and participative approach. French & Bell (1999) examine large scale, group, and individual OD interventions, emphasizing that confrontation meeting and strategic management activities are better suited for management groups, while future search conferences are better suited for a wide spectrum of organizational stakeholders.

Additionally, French and Bell advocate the appreciative inquiry (AI) method to focus on the strengths of the organization and future things that are valued by its members. Furthermore, Hammond (1996) promotes the use of AI to look into the future while accentuating positive aspects of the organization, “Appreciative inquiry suggests that we look for what works in an organization. The tangible results of the inquiry process are a series of statements that describes where the organization wants to be, based on the high moments of where they have been. Statements are grounded in real experience and history, people know how to repeat their success” (p.7).

AI uses a summit to engage participants in a collaborative process to discover what the organization has done to be successful in the past; subsequently participants collectively dream about the new future, and later design the specific strategies and objectives to achieve the organization’s destiny.

Additionally, AI helps to gain the commitment of people to advance the implementation phase, “Through a workshop format, the participants stir up memories of energizing moments of success creating a new energy that is positive and synergistic. Participants walk away with a sense of commitment, confidence, and affirmation that they have been successful” (p.7) Marquardt (1999) propose action learning, a methodology to find practical solutions for problems, while enhancing the team’s ability to learn. “Simply described, action learning is both a process and a powerful program that involves a small group of people solving real problems while at the same time focusing on what they are learning and how their learning can benefit each group member and the organization as a whole” (p. 4)

Contrary to the collective and provocative AI method, Kotter & Cohen (2002) advocate a 8 step methodology to manage organizational change: “Increase urgency, build the guiding team, get the vision right, communicate for buy-in, empower action, create short term wins, don’t let up, make changes stick” (p. 7).

Senge (1990) promotes a systemic and interrelated approach to manage change in organizations, while transforming them into learning organizations. Senge explains that organizations face learning disabilities that affect their capacity to continually learn, and transform. These learning disabilities result in lack of flexibility to adapt to new demands, incompetence to critically analyze internal performance, failure to correct behavior, and ineffectiveness to implement deep and sustained changes. To correct those learning disabilities, Senge proposes the use and practice of five disciplines: personal mastery, mental models, shared vision, team learning, and systems thinking. According to Senge (1990) a learning organization is “an organization that is continually expanding its capacity to create its future” (p. 14). Furthermore, Senge, Kleiner, Roberts, Ross & Smith (1992) provide practical examples and case studies to guide companies in their transformation to learning organizations.

Another important element for consideration in the implementation of OD interventions is the definition of a dedicated team to work full time in the implementation with specific roles, and objectives. Moss Kanter, Stein & Jick (1992), define three key roles in a change intervention: a) the strategist, a role reserved for visionary leaders, whose main function is to identify the need for change and create the conditions to make it happen, b) the change implementer who will develop the required strategies and plans to execute change initiatives, manage resistances and make changes happen, and c) the role of change recipients that represent the vast variety of individuals that must adapt and adopt new changes. As literature suggests OD interventions vary from a large-scale, group, and individual approaches.

Therefore, any change intervention should employ a combination of OD models and tools best suited for the culture of the organization, the characteristics of the change process, and past experiences. Additionally, the intervention should pay attention to the psychological and emotional elements that people go through as they internalize the change process. Furthermore, the use of Kotter & Cohen’s 8 step change management process model will provide an effective framework to target deliberate change efforts to effectively alter individual, group and organizational performance.

Measuring results and impact of OD interventions
Processes utilized for measuring results and impact of OD interventions range from the analysis of qualitative elements such as the adherence to a company’s policies and processes, to more elaborated approaches, such as cost-benefits analysis, and the use of quantitative and qualitative metrics, balanced scorecards, and sophisticated models to determine the return of investment.

Herman, and Renz (1998) examine approaches used by nonprofit organizations to measure their results. They identified the adherence to policies and procedures to measure the achievement of the nonprofit organization’s outcomes. “Institutional theory predicts that when outcomes are difficult to measure, organizations are likely to emphasize following approved procedures to achieve or maintain their legitimacy (p. 29). The authors conducted a study to determine the relationship between board effectiveness and organizational effectiveness. Among the effectiveness measures cited by senior executives of nonprofit organizations were the following: its mission statement, the use of a form to measure client satisfaction, organization’s planning documents, the use of a performance appraisal form, by-laws containing a statement of purpose, etc.

Sawhill, J. & Williamson D. (2001) reviewed the model for measuring performance in the nature conservancy consisting of three broad areas: impact, activity and capacity. The authors conclude the importance of strategic alignment for the nature conservancy “An integrated system of performance measures is no substitute for a compelling mission, uplifting vision, clear goals, and innovative strategies. It would be a serious error to imagine that a nonprofit can develop effective measures in the absence of strategic alignment” (p. 385)

Berry, Fisk, and Zimmerman (1997) suggest the use of a more objective measurement approach to identify the value of a defined program and make a decision: a cost-benefits analysis. “Cost-benefit analysis consists of three steps: calculate costs, calculate benefits, and compare results….In short, cost-benefits analysis helps trainers and managers decide what to do..” (p. 143).

Kaplan and Norton D. (1996) propose the use of quantitative and qualitative elements in the evaluation process. They advocate the use of the balanced scorecard to translate strategy into action. The authors state that the balanced scorecard is a management system to channel the energies, abilities, and specific knowledge held by people throughout the organization toward achieving long-term strategic goals. Furthermore, Kaplan (2001) reveals that nonprofit organizations lack financial measures to track their performance.

After an elaborated literature review on the topic, Kaplan recommends the use of balanced scorecard for managing nonprofit organizations “Thus, the literature concurs with the need to articulate a multidimensional framework for measuring and managing nonprofit effectiveness. This scorecard would seem to provide just such a framework”. (p. 357).

Additionally, Kaplan emphasizes the importance of aligning strategy with performance measurement “Strategy and performance measurement should focus on what output and outcomes the organization intends to achieve, not what programs and initiatives are being implemented” (p. 357). He sustains that the use of the balanced scorecard in nonprofit organizations helps align staff’s day-to-day activities with the organization’s mission and key initiatives “The balanced scorecard has enabled the nonprofit organizations to bridge the gap between vague mission and strategy statements and day-to-day operational actions” (p.369) The model uses 4 key perspectives with specific objectives, metrics, targets, and initiatives.

The financial perspective includes examples applicable to nonprofit organizations, such as net amount of funds raised, or the improvement in net asset and liquidity to support new service development. The customer perspective includes satisfaction and retention of clients, and market growth. The learning and growth perspective has objectives and metrics to improve training, career development, and employee retention. The internal perspective contains research and development activities to support the achievement of the organization’s mission, and to improve client satisfaction and retention.

Following the line of sophisticated measurement systems, Phillips (1994) declares that although top management requires more sophisticated calculations such as return of investment (ROI), only a few programs should be measured using ROI because of complexity of the evaluation. “In the ROI formula the costs of a program are subtracted from the total benefits to produce the net benefits, which are then divided by the costs” (p. 12). Additionally, the author sustains that OD programs are among the most difficult HRD programs to evaluate, because the several factors included.

References
Berry, K., Fisk, C.& Zimmerman, P. (1997). How to Conduct a Cost-Benefit Analysis. ASTD (9007), 143-158.
Bridges, W., (1991, 2003). Managing Transitions: Making the Most of Change. Cambridge, MA: Da Capo Press.
Cooperrider, D. & Whitney, D. (2005). Appreciative Inquiry: A Positive Revolution in Change. San Francisco, CA: Berrett-Koehler Publishing Inc.
French, W., & Bell, C. (1999). Organization development: Behavioral science interventions for organization improvement. Upper Saddle River, NJ: Prentice-Hall.
Hammond, S. A. (1998). Thin Book of Appreciative Inquiry (2nd edition). Thin Book Publishing Co.
Harrison, M.I. & Shirom, A. (1999) Organizational Diagnosis and Assessment: Bridging Theory and Practice, Thousand Oaks, CA: Sage Publications.
Harvard Business Review. (1996), Harvard Business Review on Change. Boston, MA: Harvard Business Review School Press.
Kaplan, R.S. (Spring, 2001). Strategic performance measurement and management in nonprofit organizations. Nonprofit Management & Leadership, (11) 3, 353-370.
Kaplan, R.S. & Norton, D. P. (1996), The Balanced Scorecard: Translating Strategy into Action, Harvard Business School Publishing.
Sawhill, J.C. & Williamson, D. (Spring, 2001). Mission impossible? Measuring success in nonprofit organizations. Nonprofit Management & Leadership, (11) 3, 371-386.
Kotter, J. & Cohen, D., (2002), The Heart of Change: Real-Life Stories of How People Change their Organizations. Boston, MA: Harvard Business School Press.
Marquardt, M. Action Learning in Action: Transforming Problems and people for World-Class Organizational Learning. Palo Alto, CA: Davies-Black Publishing.
Moss Kanter, R, Stein B. & Jick T., (1992). The Challenge of Organizational Change: How Companies Experience it and Leaders Guide It. New York: Free Press. Phillips, J. (1994), In Action: Measuring Return on Investment. Alexandria, VA: American Society for Training and Development (ASTD).
Robbins, S. (2003), Organizational Behavior (10th, Ed.). Patparganj, Delhi, India: Pearson Education (Singapore) Pte.Ltd.
Schein, E. (1992), Organizational Culture and Leadership (2nd Ed.). San Francisco, CA: Jossey-Bass Publishers.
Senge P. (1990). The fifth discipline: the art and practice of the learning organization. New York: Currency Doubleday.
Senge P, Kleiner A., Roberts C., Ross R., & Smith B. (1994). The fifth discipline fieldbook: Strategies and tools for building a learning organization. New York: Currency Doubleday.

Thursday, June 18, 2009

How to survive and thrive in a matrix management organizational structure?

In an effort to succeed and thrive in an increasingly competitive global business environment, organizations commonly make changes to their organizational structures, making them flatter, customer-driven, and product-centered. Several organizations have implemented a matrix management approach to leverage economies of scale, increase product development capabilities, and augment customer satisfaction levels (Corporate Leadership Council [CLC], 2002). The CLC emphasizes that matrix organizations combine functional and product expertise to keep pace with short product development cycles. The CLC also indicates the strategies employed by organizations to successfully implement a matrix management reporting relationship. These include a common understanding of the company vision and strategy, formalizing reporting relationships, managing matrix issues upfront, and aligning functionally.

Additionally, the CLC identified that strong communication skills, teamwork, adaptability, and shared goal and rewards systems play a critical role for the success of matrix management.
Kochansky and Donnolo (2005) note experiences gained from organizations like GM in the use of matrix organizational structures, and offers valuable suggestions to making them more effective by including a clear definition of roles, development of key competencies such as collaboration and teamwork, the development of supervisors within the structure, and a redefinition of the company’s operational model.

Despite the benefits reported by some organizations with the use of matrix organization structures, the CLC (2002) also notes that organizations frequently abandon this organizational arrangement because of two main reasons: duplication of efforts and inefficiencies. Other important issues reported by the CLC around matrix management are the lack of accountability, and frequent conflicts over allocation of resources and division of authority.

As literature indicates, the use of a matrix organizational structure may provide important benefits to global organizations; however, its implementation requires new organizational arrangements, and increased focus on measurable results, giving up power, and the development of new competencies such as teamwork and collaboration.

References:
Corporate Leadership Council. (2002). Matrix management (CLC1UR1UD): Fact brief, Corporate Executive Board, Washington, DC.
Kochansky, J. & Donnolo, M. (2005). Enter the matrix GM: The general manager for today’s markets. Sibson Consulting. Retrieved on October 5, 2006 from:
http://www.imakenews.com/sibson/e_article000384170.cfm?x=b4k945J,b1vhTtNh,ww

Wednesday, June 17, 2009

Future employability: The business case for competencies

The world is moving and evolving. Global competition, technological changes, leaner production cycles, and younger generations are driving change and innovation in the workplace. Product development cycles are being constantly shortened, bringing new products and services cheaper, faster, and with higher quality.

Despite the significant progress and advancement in all fields, the business environment faces major challenges: ethical issues are on the rise, resulting in crisis of the human, financial, and social systems. The world’s natural resources are gradually diminishing, and most countries struggle to improve democracy, and reduce poverty and inequalities.

Are the labor markets easily adapting to the current business environment?

Unfortunately, the answer is no. There is a lack of talent to respond to current and future business needs. Governments and organizations make a great effort to maintain a competent workforce but the labor markets fall behind. Leading organizations have understood the importance of having a competent workforce, and heavily invest in training and education, but even those organizations struggle to develop and maintain key competencies for their staff.

The 2008 ASTD’s State of the Industry report revealed that organizations are incorporating important efficiency gains, technology innovations, and maintain a sustained financial support to the workplace learning and performance function. The average direct learning expenditure per employee increased from $1,040 in 2006 to $1,103 in 2007, and the average number of training hours per employee increased from 35.1 in 2006 to 37.4 in 2007.

Furthermore, benchmarking organizations –a group of large Fortune 500 companies and public sector organizations, increased their proportion of their payroll to learning and performance activities, augmenting from 2.20 percent in 2006 to 2.70 percent in 2007. Despite the financial commitment and support, the education and training efforts prove to be ineffective to keep the pace with technology and process innovations.

Lack of preparation and obsolescence is present, and gradually restrains the organizations’ capability to change and renew. How to change this equation? Without any doubt governments, organizations, and individuals have to find new mechanisms to accelerate the adoption of new and critical competencies, fostering a culture for lifelong learning and performance; where individuals take an active role for increasing not only the skills required for today’s work, but also maximizing their ability to learn, to adapt to new situations, and to renew their personal, interpersonal, and technical competencies in order to achieve higher levels of performance and future employability.

Achieving employability by developing competencies

Individuals and organizations have gradually replaced the traditional paradigm of employment –especially new generations; instead of looking for a solid and stable place to work, young individuals focus on work that expose them to challenging work experiences and key learning that guarantee their future employability.

The new paradigm of employment relates job security with the acquisition of new competencies. The term employability aspires to create the conditions where people have the required knowledge, skills, and abilities to have a decent work that provides income to cover basic needs. Employability will ensure that individuals keep up with the accelerated pace of change and innovation.

Rather than focusing on acquiring tacit knowledge or narrowed skills, the competency approach shift the gear toward a more holistic and multidimensional model that effectively link personal, interpersonal, and technical skills to produce higher levels of performance.

Simply described, competencies are the combination of knowledge, skills, and abilities that when effectively applied, produce a successful performance in a defined function or activity. Competencies are observable, measurable, and can be developed to reinforce competitive advantages and future performance.

Dubois, D. & Rothwell, W. (2004) define competencies as the multi-dimensional characteristics linked to the desired level of performance “Competencies.. are the characteristics that individuals have and use in appropriate, consistent ways in order to achieve desired performance. These characteristics include knowledge, skills, aspects of self-image, social motives, traits, though patterns, mind-sets, and ways of thinking, feeling, and acting”. (p.16).

Mulder’s definition of competency (Brockmann, M. 2008) expands the term capability to the personal, interpersonal, functional, and organizational arenas: “Competence is the capability of a person or an organization to reach specific achievements. Personal competencies comprise: integrated performance-oriented capabilities, which consist of clusters of knowledge structures and also cognitive, interactive, affective and where necessary psychomotor capabilities, and attitudes and values, which are conditional for carrying out tasks, solving problems and more generally, effectively functioning in a certain profession, organization, position or role” (p.564)

The competency approach includes a multi-dimensional analysis at the individual, interpersonal, role, and industry levels; analyzing both, the competencies required to successfully perform on today’s environment, and also the competencies requires to successfully perform in the future.

The exercise requires visioning and anticipation; furthermore, it requires an active role of employees in the learning process. For example if a teacher sees his/her work as the process to transfer knowledge to students, the objective will be to be an effective, energetic and motivational speaker. Nonetheless, when we analyze this function in the future, probably there will not be teachers anymore, students will be learning by themselves from a wide variety of sources of information, changing the role from recipients to active learners. The functions and required competencies are completely different.

This example is a reality in today’s learning arena, where students are active learners and teachers are knowledge facilitators, whose main function is helping students learn, find solutions to problems, successfully adapt to changes, and effectively respond to unexpected situations.

Competencies are expressed in behaviors. For Green (1999) a behavior can be observed, described and measured. Dubois, D. & Rothwell, W. (2004) defined the term behavior as an observable and purposeful action: “A behavior is an observable action that is taken to achieve results or that contribute to an accomplishment” (p. 20).

When competencies are described in specific behaviors, they can be measured, allowing the identification of strengths and gaps at the individual, group, and organizational levels. If the process for measuring competencies is reliable and transparent, the information may support critical acquire/buy decisions to reinforce the organization’s competitive advantages.

Furthermore, when competencies are integrated into the human resources management processes –workforce planning, recruitment, selection, integration, onboarding, performance management, learning and development, compensation, succession planning, leadership development, etc., there’s a better connection and alignment of the organization’s strategy and objectives with day-to-day work performed by staff.

A study prepared by the Corporate Leadership Council (2006) demonstrated the link of competencies with business results. The study revealed that the top 20 organizations –measured in financial terms, had leadership competencies; furthermore, most of those organizations reported having aligned those competencies with key HR processes, such as succession planning, training and development, performance management, and long-term and short-term incentives. From the remaining companies, 73% reported having leadership competencies, and a fewer percentage reported the alignment of those competencies with key HR processes.

References
2008 ASTD State of the Industry Report. (November 2008). American Society for Training and Development. USA
Brockmann Michaela, Clarke Linda & Winch Christopher (2008). Knowledge, skills, competence: European divergences in vocational education and training (VET): The English, German and Dutch cases. Oxford Review of Education, vol. 34, n° 5, p. 547–567.
Corporate Leadership Council. (February 2006). Literature Key Findings: Transitioning to a Competency-based workforce. Washington, DC: Corporate Leadership Council. Dubois, D. & Rothwell, W. (2004).
Competency-Based Human Resources Management. Palo Alto, CA: Davies Black Publishing.
Green, P. (1999). Building Robust Competencies: Linking human resource systems to organizational strategies. San Francisco: Jossey-Bass.

Tuesday, June 9, 2009

The five elements to foster leadership


Introduction
What is required to provoke and sustain organizational development in an increasingly complex and challenging environment? Organizations are trying a wide variety of formulas to succeed, such as the diversification of products and markets, outsourcing, business process reengineering, the strategic use of technology, and, the development of a unique and competent workforce. Today’s organizations need leaders to help them succeed in an ever changing and complex environment. This literature review, examines how to transform --if that is possible, ordinary individuals into visionary, ethical, and courageous leaders.


How to transform into a leader?
Is a leader born or can a leader be formed? That question has been debated for centuries, and still, there is no agreement. While some authors consider that leadership is a born trait, there are others who think that leadership skills can be developed. If this is true, what conditions/elements foster the development of leaders?

1) Developing a “leadership mindset”
Most authors consider that a personal transformation is required to become an effective leader. Koestenbaum (1991) mentions that “Leadership requires a change in how you act, preceded by a conversion-like transformation in how you think” (p. 6). Furthermore, he sustains that leadership can not be taught, no school, professor or coach can teach you how to be a good leader; leadership has to be learned by own experience. Koestenbaum proposes the development of a “leadership mindset” which implies thinking big and new, realism to see things as they are, strong ethical values, and courage to make decisions and to accept responsibility of own actions and inactions.

2) Exercising humanistic and ethical values
The quantitative analysis of leadership characteristics conducted by the Corporate Leadership Council (2001) revealed ten top values and behaviors to effective leadership: “honesty and integrity, communication of expectations, recognition and value achievement, adaptation to changing circumstances, inspiring others, putting the right people in the right roles at the right time, passion to succeed, identify and articulate long-term vision for the future, persuade and encourage others to move in desired direction, and accept responsibility for successes and failures” (p. 10b). Furthermore, the study identified two interesting findings; the first revealed that current leadership teams lack the ability to see the big picture, thus, losing sight of the future. The second is a call for attention for human resources; the approximately 8,000 leaders that participated in the study reported that their organizations commonly failed to provide them with the training programs required to develop key leadership skills.


3) Understanding people’s motivations and engaging collaboration and commitment
Strebel (1996) considers that leaders must understand people’s inner motivations and engage them with the use of personal compacts that are the reciprocal obligations and commitments made by employees and organizations. Personal compacts could be classified in three dimensions: formal dimension, which relates to the understanding of functions and responsibilities, the psychological dimension, which addresses elements of mutual expectation and reciprocal commitment, and the social dimension which relates to the alignment of stated values and mission and the company’s practices and management’s attitudes towards them.


4) Managing uncertainty, paradoxes, and resistance
Is the future intriguing and threatening for you? For most of the people it is, but not for leaders, leaders need to effectively manage uncertainty, paradoxes, and natural resistances from people. Handy in the Age of Unreason (1989, 1990) keenly observes that leaders delight with the unknown, and have the ability to identify new opportunities, and create new paradigms.
The relationship between leadership and change is intrinsic. Leaders provoke changes and assist the creation of new conditions. According to Moss Kanter, Stein & Jick (1992), “Deliberate change is a matter of grabbing hold of some aspect of the motion and steering it in a particular direction that will be perceived by key players as a new method of operating or as a reason to reorient one’s relationship and responsibility to the organization itself, while creating conditions that facilitate and assists that reorientation” (p. 10). Mc Laghan (2001, 2002) reinforces the notion that leaders must be active learners to effectively guide their teams into the new ventures, joggling their own personal change challenges.

5) Understanding how change occurs and how to sustain changes
Kanter, Stein & Jick (1992) emphasize the need for leaders to understand and manage change in organizations. The authors describe how difficult is to find practical examples of focused, innovative, and flexible organizations, since change is not so easy to understand, and difficult to replicate successful change initiatives. Kanter at all, emphasize the need for leaders to address the following five barriers to change: (i) the difficulty to make changes stick, (ii) the limitations of managerial action in making change, (iii) the attempts to carry out programmatic continuing change through isolated single efforts, (iv) the lack of resources to implement change, and (v) the uniqueness of change initiatives (there is no recipe for successful change, some change initiatives are successful and others fail).


Conclusions
Since ancient times, leaders have played a strategic role helping individuals, groups and organizations to transform, adapt to new conditions, and break traditional paradigms. With an increasingly faster pace of change in today’s environment, people are more prepared to adapt to new situations, nevertheless, adaptation is no longer the key for achieving success. We are living in the age of knowledge, characterized by faster changes, where the value of an organization is not given by their assets, but by their capacity to create and deliver innovative products and services. Organizations, as an effort to improve and maintain their position in the market implement a wide variety of change initiatives: diversification of markets and products, new technology, business process reengineering, outsourcing, among others, but there’s one key initiative that remains as a constant since ancient times; the need to attract, retain and develop visionary, courageous and ethical leaders. There are fashions that fade with the time, flavors of the month, but there’s something that remains constant: the search for leadership. The characteristics of leadership remain the same as of ancient times, a great vision which implies the ability to see what others do not see, the courage to pursue higher goals, humanistic and ethical values, ability to understand people’s motivations, and how change occurs, and competence to manage uncertainty, paradoxes and natural resistance. Today’s organizations face new challenges, and leadership provides solutions to solve today’s complex problems to take advantage of new developments and create competitive advantages. Only the organizations that effectively implement plans to attract, retain and develop new leaders will provoke and sustain organizational development. Those organizations will be leading the era of knowledge.

Question for readers:
What conditions/elements foster the development of leaders? (Please drop a comment and share with us your insights!)


References
Corporate Leadership Council. (2001). Voice of the Leader: A Quantitative Analysis of Leadership Bench Strength and Development Strategies. Washington, DC: Corporate Executive Board. Pag. 10b.
Handy, C. (1989, 1990), The Age of Unreason. Boston, MA: Harvard Business School Press.
Kanter, R, Stein B. & Jick T., (1992). The Challenge of Organizational Change: How Companies Experience it and Leaders Guide It. New York: Free Press.

Koestenbaum, P. (1991), Leadership: The Inner Side of Greatness: A Philosophy for Leaders by Peter Koestenbaum. San Francisco, CA: Jossey-Bass Publishers.
McLagan, P. (2001, 2002), Change is Everybody’s Business. San Francisco, CA: Berret-Koehler Publiser Inc.