Transforming the Organization Through Data and Analytics – Adopting an Organizational Development Approach

Preamble

The savvy CDO is looking for a comprehensive framework that can be used as a thinking tool for mapping out the organization’s transformative journey to becoming a data-driven enterprise. Such a framework must be focused on business value and must include an incremental approach to OCM and culture.

In my two previous articles in this series, I shared observations about the role of Culture and Organizational Change Management (OCM), and the notion of dealing with “messy” change. Here’s a quick refresh.

The Role of Culture and Organizational Change Management (OCM)  

I referenced a NewVantage Partners (2020:2) survey, which found that there is little emphasis on “initiatives devoted to changing human attitudes and behaviors around data,” notwithstanding the fact that more than 90% of those surveyed knew “that the challenges to becoming data-driven are in people, process, and culture—not technology.”I concluded that the CDO community needs a comprehensive approach for harnessing organizational culture and OCM into its success. 

Dealing With “Messy” Change

I observed that creating a Data Culture implies we are going to change “the way we do things around here” with respect to managing and using our data and analytics resources, and the capabilities to innovate and transform our organizations. Such changes are “messy,” involving deeply held basic assumptions and beliefs. They are sometimes manifested in explicit statements of values but always seen in company practices and behaviors; these are seldom easy changes! 

I went on to assert that, if the change is going to be successful at all, we should start by asking two questions: “Why?” and “Why now?” That is: “Why do we want to transform (change) the organization, making it more data-driven, and why must this be done now?” What exactly is the specific opportunity or problem we are trying to address? Once we have a clear opportunity/problem statement, and we understand the business value that will be realized by addressing it, the next step is to understand the nature of the required change and identify the associated cultural factors in both the external and internal environments.

Organizational  Development Approach

Senior and Swailes (2016) propose an organizational development (OD) approach to complex (messy) changes, borrowing elements from Kotter (1996), Paton and McCalman (2008), and Buchanan and McCalman (1989). They contrast this type of approach with a hard systems model of change (HSMC), developed from the works of Flood and Jackson (1991), Paton and McCalman (2008), and Open University (1984,1994, 2000). An HSMC is most often used where the problem set is less complex and where human factors play a smaller role.

The OD approach consists of five human-centric stages. In the first stage, the current situation is jointly diagnosed and a vision for change is developed, including an understanding of the internal and external cultural factors. In the second stage, commitment is gained from the stakeholders for the change rationale and vision. The third stage involves developing an action plan and charting the key roles and responsibilities, including change agents and champions, etc.  Stage four is where change is jointly implemented, and stage five involves assessing and reinforcing the change. 

An OD approach can be critiqued from several perspectives. One can question its applicability to all national cultures in a multinational organization (Adler, 2007; Cummings and Worley, 2015). A counter argument involves the use of the concept of “depth of intervention” (French and Bell, 1999) to determine how “deep” one should intervene as part of the change process involving people in different cultures. 

Some question the applicability of OD to the mechanistic culture of the public sector with its multi-level reporting as well as political pressure from officials. Despite these factors, there have been several documented public sector OD success stories (Parkes, 2008; Crawford, et al., 2003). 

The OD approach includes the notion of “unfreezing,” which is an “action research process of data collection, analysis and feedback as part of a participatory process of education for change.” (Senior and Swailes, 2016:333-4.) Some argue that this ignores reality, which calls for much harsher measures (Clarke, 1994; Johnson, 1990). The counter position is that change can be triggered by stimuli other than crises (Farquhar et al., 1989), and good leaders will understand when to apply a transactional versus a transformational style (Senior and Swailes, 2016). 

Some critics of OD say that the approach has limited applicability in highly constrained change scenarios, e.g., where legislation is imposed from the external environment. However, even in these situations, stages two through five often apply (Senior and Swailes, 2016).  

The Bottom Line: Knowing When To Use OD Versus HSMC

In conclusion, an OD approach to managing change focuses on culture and political processes, as well as structure and systems. In these situations, change agents must gain an understanding of stakeholder feelings, perceptions, and aspirations as well as the political processes that underpin the organizational fabric before they can effectively apply their influencing and negotiating skills. OD approaches are mostly preplanned, with feedback loops to accommodate unexpected events/outcomes (Senior and Swailes, 2016). 

It is likely that a change agent in a particular organization may need to use a combination of OD and HSMC approaches to address the inevitable variety of simple and complex problems. The Chief Data Officer needs to understand the differences between these approaches and when to use them.

Author Bio: Derek Strauss

Derek Strauss is Founder, CEO and Principal Consultant of Gavroshe. He was Former Chief Data Officer of TD Ameritrade for five years, and he has over three decades of Data & Analytics experience. Strauss established and managed numerous multi-year enterprise programs and initiatives in the areas of Data Governance, Advanced Analytics, Big Data, Data Warehousing and Data Quality Improvement. He is a founding member of MIT's International Society for CDOs. He co-authored the book “DW 2.0: The Architecture for the Next Generation of Data Warehousing,” William H. Inmon, Derek Strauss, and Genia Neushloss (2008).

References

Adler, N. (2007) International Dimensions of Organizational Behavior, Cincinnati, OH: South-Western College Publishing, ITP. 

Buchanan, D., and McCalman, J. (1989) High Performance Work Systems: The Digital Experience, London: Routledge.

Clarke, L. (1994) The Essence of Change, Hemel Hempstead: Prentice Hall. 

Crawford, L., Costello, K., Pollack, J., and Bentley, L. (2003) ‘Managing soft change projects in the public sector’, International Journal of Project Management, 21 (6), pp. 443-8. 

Cummings, T., and Worley, C. (2015) Organization Development and Change, 10th ed., Mason, OH: Thomson South-Western. 

Farquhar, A., Evans, P., and Tawadey, K. (1989) ‘Lessons from practice in managing organizational change’, in Evans, P., Doz, E., and Laurent, A. (eds), Human Resource Management in International Firms: Change, Globalization, Innovation, London: MacMillan. 

Flood, R., and Jackson, M. (1991) Creative Problem Solving: Total Systems Intervention, Chichester: Wiley. 

French, W., and Bell, C. (1999) Organization Development: Behavioral Science Interventions for Organizational Improvement, 6th ed., Upper Saddle River, NJ: Prentice. 

Johnson, G. (1990) ‘Managing strategic action: the role of symbolic action’, British Journal of Management, 1, pp. 183-200. 

Open University (1984) Block III, ‘The hard systems approach’, Course T301, Complexity, Management and Change: Applying a Systems Approach, Milton Keynes: Open University Press. 

Open University (1994) ‘Managing the change process’, Course B751, Managing Development and Change, Milton Keynes: Open University Press. 

Open University (2000) Managing Complexity: A Systems Approach, Milton Keynes: Open University Press. 

Kotter, J. (1996) Leading Change, Boston, MA: Harvard Business School Press

NewVantage Partners (2020) Big Data and AI Executive Survey 2020 – Executive Summary of Findings. Boston, NVP.

Parkes, P. (2008) ‘How I make a difference at work’, People Management, August, p. 44. 

Paton, R., and McCalman, J. (2000, 2008) Change Management: Guide to Effective Implementation, 2nd & 3rd ed, London: Sage.

Senior, B. & Swailes, S. (2016) Organizational Change, 5th Edition, Pearson Education Limited, Harlow, UK.