1. Transcript of the talk given by M.P. Sriram , Partner ,Aventus Partners at the “National Seminar on
Innovation and Strategic Business Practices” conducted by SNGIST on 15.10.14
Introduction
Good Morning. I have been asked to speak on “Organizational Development - An effective strategy “.
I have however taken the liberty of modifying the topic to “Organizational development -Effective strategies” as I don’t think there is one single strategy which will help us effectively deliver on all Organizational Development (OD) initiatives.
When I was invited by the institute I was told to speak on “Innovations in HR”. I am therefore going to take a few minutes to share with you an illustration of how a small innovative action taken by an organization can potentially have a significant impact in terms of the culture that it is trying to build.
HR - Innovation in Action
The organization that I am going to talk about is the Virgin Group which was founded by Richard Branson.
Two or three weeks back the founder of the group Richard Branson announced a new “No caps on leave policy”. He said Employees henceforth would be allowed to take as many days of leaves as they required in a year without any ceiling. The policy is being piloted with a group of 170 people who report directly to Mr Branson.
The philosophy behind the entire initiative is a belief that people will be responsible to the organization, responsible to their teams and responsible to their own self and their careers. The broad cultural

2. implication is a message that clearly says that the organization views people as responsible individuals. While this might be a small action that has been taken by the founder of the organization it can have profound implications in terms of the culture that the organization is trying to build or change.
I also see two very clear collateral benefits emerging. One a strong reinforcement of the employer brand . Two an interesting analysis which says that there is a huge financial implication for the organization mainly because they don’t have to provision any more for “leave in cash credits”. This is a significant issue with lot of old and large organizations, because when employees resign or retire they need to provision for cash out of accumulated leaves if they have a policy of leave accumulation ( Typical policies permit up to 180 days of accumulation and encashment). Imagine the amount to be provisioned for by a company with 10000 people with a employee turnover of 20 percentage annually.
Organization Development (OD)
Organizational development is a planned process of helping an organization move to the next level. It’s a planned process which
1. Clearly defines the Desired state and what it will look like
2. Systematically assesses the extent of change that will be required ( The Gap between current and Desired State)
3. Understands the factors that will facilitate and inhibit this change
4. Assesses and defines the role that people will play in this change process

3. In my experience this part of the process is extremely critical, because you can have different ways of involving people in a change process. Popular management literature would have us believe that collaboration/co-creation i.e. involving everyone in the process of change is the most ideal way of managing change. I don’t believe it is that simple. One will have to decide on the level of proposed involvement of people depending on the actual facts and circumstances of the situation. As organizational development initiators assessing this effectively and planning a strategy around it would be critical.
5. Creation and implementation of systems and processes that will institutionalize the desired end state
When we are talking about OD we are also referring to creating systems and process that will ensure that the desired state is “institutionalized “. All of us have seen enough examples of changes being brought about by very strong leaders but disappearing over a period of time when the leader moves away from the organization. This is because the leader has not been able to put systems and process that will ensure the institutionalization of the changes.
6. Assessing impact on employee behaviors and taking necessary action
The other key element of an organization development initiative is the extent to which we are able to assess the impact of the initiatives on employee behavior. To my mind this is a critical determinant of trying to see how an organizational development initiative is progressing. We need to see whether employees are exhibiting the desired behaviors that we intended them to exhibit .Not just in their

4. interaction with each other but more critically in their interactions with external stake holders both customers and partners.
Innovation
In the first session we had a lot of speakers share various examples of innovation and I am sure you will be exposed to various definitions and interpretations to innovation over the next two days.
I have a very simple way of defining innovation. Innovation to me is practical creativity. Innovation is meant to solve a problem. It is not creativity for the sake of being creative. While that might be true in the world of creative arts I am talking about innovation in the context of management science and as applied to real problems which are there in an organization or which are confronting a group. “Innovation in this context is practical problem solving”.
I also would like to make a subtle distinction between “innovation” and “inventing “. Inventing is doing /creating something which is absolutely new, which did not exist earlier. Innovation doesn’t necessarily have to been doing something which has never been tried and tested anywhere. It can just be doing something which has not being tried or tested in that particular organization context.

5. Organizational development –Alternate Approaches
I will quickly take you through a framework which I have found to be extremely effective. I don’t claim any intellectual copyright over this framework. It is an adaptation from the book “The Fifth Discipline – Field Book “by Peter Zenge. I don’t know how many of you have read it. For those who have not I would
encourage you to read it. It gives a lot of live examples in terms of how organizational change can be actually implemented. Dr. Pothuval in the morning session talked about a lot of initiatives where change did not stick because of non acceptance by people. The book will give you enough number of real life examples in terms of how it has actually been done.
There are five broad ways in which we can look at institutionalizing any change that is envisaged by an organizational development initiative (Illustration below)

6. On one end you have the “Telling” method which is effective when “the leader knows what needs to be done tells the followers what to do and they follow “.
When I am using the word leader in this context I am using it in to refer to any person who is responsible and accountable for addressing the situation at hand. So whether it is a person designated by the organization or a committee or group or an external person or a group which is been brought in to handle a situation “leader” refers to the person/entity responsible for addressing the situations at hand.
And on the other end you have what is called “Co-creating” which is a collaborative process of co creation.
In the middle you have three broad different approaches which vary in terms of the involvement of people.
“Selling” is effective when the leader knows what to do but needs a buy in of the people. He has a thought/ an idea/ a solution but is trying to ensure that people buy in to these thoughts/ideas and solutions.
“Testing” is where the leader has thoughts but wants members reactions because he is not very sure whether the solution is the most ideal solution.
“Consulting” is where leaders are putting things together and went creative ideas and “Co-creating is a process of true collaboration between all the people involved.
This model has been validated to an extent by my own experiences of having worked in multiple organizational contexts.

7. How do we choose the right approach and process?
There are three broad variables which will help us determine the right process.
1. The capacity and capability of the leadership of they set direction. Are we as leaders very clear in terms of the end state that we want to move to and the direction that we want to move in.
2. The ability of the leadership group to listen learn and synthesize because that is the most critical ability that one needs to engage in co creation and collaboration.
Many a time it is quite possible that the leaders don’t have the ability to do anything meaningful with the vast amount of energy and data that is getting generated through this process. Let’s say you go through a process of co creation, you involve 500 people in the organization in an elaborate process spanning 6 to 12 months. At the end of the process you have no clue in terms of how to use or you don’t have the ability to make meaningful use of all the energy and the data that is getting generated through this process. It might actually because you more harm than good.
3. The third variable is the capability of people to assume leadership.
Evaluate your organization and context on these three factors and you will be able to determine whether you need to use a process of selling, telling, testing, consulting or co- creating while managing an organizational development initiative.
The process designed can also be subject to a lot of innovation. As people who are responsible for the transformation process we have to give ourselves a lot of liberty in terms of determining the right process.

8. A few Practical tips
I have found the following attitudes very handy and useful while undertaking any organization development initiative.
1. Non attachment to the past and known ways of doing thing. We need to understand that something which might have worked in the past in a different context need not work in the current context.
2. We need to make a very conscious attempt to understand underlying assumptions and question the assumptions. When all of us start working in organizations tomorrow I would request you to not take things for granted if a superior tells you this is the way to run a process. I would urge you to make an effort to understand why that process is being run that way. Unless you have that understanding and question the reason behind why the particular process is running in a particular way you will have no way of knowing whether that process is actually appropriate to the situation at hand.
3. Embrace counterpoints of view as an opportunity for refinement and improvement. Do not be defensive when there is a counter point of view .Be open to the thought process; be open to the ideas which have been raised by others even if those ideas might be uncomfortable to you as an owner of that process. I go back to what Dr Poduval mentioned in the morning “Only when there is conflict would something creative and useful emerged out of that “ . I think that is one useful learning that I will carry back with me today.
4. While you might have designed a particular process to drive an organizational development initiative I would urge you to be non attached even to that process. You might have designed the

9. process after having undertaken a detailed analysis. And you would have designed something which you think is workable for that situation. But it is quite possible that as you go through the implementation that there is a lot of data that emerges which might give you pointers to course correct. Embrace these opportunities.
A real Life Example
Let me try and show you how we can use this approach in a live situation. This is an organization which is the business of analytics a growing discipline as all of you know. The organization has grown from a three member to a 400 member organization over a 10 year period. It has been very open to embracing innovation practices. It had defined a set of values which it wanted all its employees to live by.
While they had communicated these values across all the locations and offices they realized that the challenge lay in getting all the people to actually live these values in their day to day interactions.
Stage 1- They decided to go through a limited participate process to refine these existing values. Respect, integrity, passion and customer focus were the five values. They said let’s try and figure out what these words actually means to employees. If we say respect what does respect means for us in our context, if we say passion for relentless excellence what does it mean in our context and so on. They involved around forty people (Ten percentage of the population) in this initiative and defined each of these values.
Stage2 - They said now that the values have been articulated we want to start encouraging people to demonstrate these values. They took a very bold step, one which not too many organizations take. They decided to include these values in the performance management process. They redefined the

10. performance management process and provided a 20 percent weightage for performance against demonstration of these values with the balance 80 percentage weightage given to performance against key performance indicators that was derived from a strategically constructed score card . They implemented this for a year. At the end of one year they realized that for this 20 percentage component on values 390 out of 400 people assessed got a rating of 3/5. Every manager was very happy to rate everyone on a mid point scale because no one wanted to take a call in terms of saying someone had demonstrated very poor manifestations of the core demonstrational values or viceversa.
Having said that when they had promotion discussions for example, you would see a lot of managers saying no I don’t think this person is suited for moving to next level because he is not a true role model of the values that we uphold as an organization. But you look at the performance management ratings wouldn’t have anything negative on the person as far as demonstrational values is concerned.
Stage 3 - They decided to refine the process further. They embarked on a process where in they engaged most of the 400 employees through focus group discussion to articulate how each of these values will actually manifest. For E.g. How will the value “Respect” be manifested across the organization? They also distinguished behaviors that will be demonstrated by people at different levels of the organization. They defined the positive behaviors and the negative behaviors which should be reflective of respect in different interactions, with the external customers/clients, with each other and with their external partners. This was done for all the five values and consolidated in the form of a values dictionary.
Stage 4 -The organization is experimenting once more to take this process to the next level. It has now mandated that in every formal monthly review meeting that is conducted at an organizational

11. /departmental and team level the demonstration of values by the employees will be necessarily reviewed along with a review of the business/unit performance. All individual cases of exceptional demonstration of values both positive and negative will be highlighted and discussed . This data will be cumulated at the end of the year to feed into the performance appraisal process for a more accurate distinction in demonstration of values and consequent reward for standout performers. The intent is to have a more robust system which will ensure that the desired behavioral manifestations become way of life right in the organization.
Their journey in taking the organization to the next level continues.
I thank you once again for inviting me and hope I have been able to do justice to this theme.