Towards Organisational Alchemy -...

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Towards Organisational Alchemy

A Journey Through Power Relations, Learning and Emotion

A Case Study

Presented to

The Graduate School of Business

University of Cape Town

In partial fulfilment

Of the requirements for the

Masters of Business Administration Degree

By

Kevin D. Derman & Mebs Loghdey

November 2002

Supervisor: Kurt April

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This report is not confidential. It may be used freely by the Graduate School of

Business.

Mebs wishes to thank his parents Abe and Nazlie, his brother Zunade, his beautiful wife

Stacey and daughters Aliyah, Reem, and Taybah, for their patience, understanding, love

and support they have shown him during this adventure.

Kevin wishes to thank his parents Avril and Sydney for their loving attitude and for

always encouraging the pursuit of knowledge. He dedicates this report to Candice for her

love and support during this period.

We certify that except as noted above the report is our own work and all references used

are noted accordingly.

Signed

KEVIN DALE DERMAN MEBS LOGHDEY

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ABC FINANCIAL SERVICES:


ABSTRACT

This research report explores the integration of learning, emotions and organisation at

the individual, team and organisational level. In doing so, it proposes a conceptual mode,

entitled the Organisational Alchemy Model. This model makes visible the interaction

between the socio-emotional aspects of learning, and the factors that inhibit or promote

organisational learning. This report uses a case example of a change initiative within the

leadership team of a listed financial service company. In doing so it examines the effect

of the intervention at the individual, team and organisational level, and shows how the

interplay between these groups can be promoted or retarded by organisational factors.

KEYWORDS: Organisational learning, Systems thinking, Emotional Intelligence, Mental

Model, Change Management

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Table of Contents

Theoretical Overview ......................................................................................................6

A systems approach to organisational development..................................................6 Types of change.......................................................................................................7 Change leaders ........................................................................................................7 Power relations, emotion and learning .....................................................................7 Nadler and Tushmans (1992) Congruence model of organizational behaviour ........8 Systems thinking .....................................................................................................8 Affective events theory............................................................................................9 Emotional contagion..............................................................................................11 Mental models .......................................................................................................12 Individual learning and emotional intelligence in the workplace ............................13 Emotional capacity ................................................................................................13 Kellys Personal Construct Theory.........................................................................14 Espoused theories and theories-in-use....................................................................14 The Baron EQ-i test ...............................................................................................15 Career Path Appreciation (CPA) ............................................................................16 Theme of Work and Matrix of Working Relationships ...........................................17 Team Learning ......................................................................................................18 Emotional intelligence in the workplace: group and team focus .............................19 Group intelligence and group effectiveness............................................................19 The Emotional reality of teams ..............................................................................20 Primary and secondary processes in organisations..................................................21 The LifePi test .......................................................................................................22 Organisational learning..........................................................................................24 Organisational culture............................................................................................25 Organisational climate ...........................................................................................25 Becoming a Learning Organisation........................................................................26 Schwandts Dynamic Organisational Learning Model............................................27

References.....................................................................................................................29 The Case Study .............................................................................................................38

Introduction ...........................................................................................................38 The Work Climate and Culture of the Company ....................................................41 The Intervention Plan.............................................................................................45 The Aim ................................................................................................................47 The Individual Test Results ...................................................................................50 Baron EQ-i ............................................................................................................50 LifePi ....................................................................................................................53 Career Path Appreciation .......................................................................................53 Wechsler intelligence test (WAIS) .........................................................................54 The Team Day .......................................................................................................54

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Results Assessment................................................................................................55 Internal Assessment ...............................................................................................56 External Perspective ..............................................................................................58 ABC Financial Services learning environment .......................................................61 The Organisational Alchemy Model ......................................................................68

Appendix A...................................................................................................................73 Old and New Company Structure...........................................................................73

Appendix B ...................................................................................................................74 The Adizes Life Cycle Model ................................................................................74 Appendix C ...........................................................................................................75 The Baron EQ-I test..............................................................................................75 Wechsler intelligence test/ WAIS...........................................................................75 Wechsler Adult Intelligence Scale-Revised (WAIS-R)...........................................75 LifePi ....................................................................................................................76 Career Path Appreciation (CPA) ............................................................................78

Appendix D Example of Baron Individual Summary Report.......................................80 Appendix E Baron EQ-I Results .................................................................................84 Appendix F....................................................................................................................87 Appendix G...................................................................................................................88 Teaching Guide .............................................................................................................89

Introduction ...........................................................................................................89 Questions Posed.....................................................................................................89 Secondary Questions: ............................................................................................89 Suggested Readings For The Case .........................................................................90 Lecture Timing .................................................................................................... 104

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Theoretical Overview

This review attempts to find a window through which to view the knowledge gap that

exists around the systemic organisational, learning and emotional relationships at the

individual, team and organisational levels, which facilitates the organisations capacity to

adapt to discontinuous change in a non-rational environment. In doing so, this review

will also explore the drivers and blockers of learning and change in organisations at

these levels.

Based on the premise that emotional responses are integral to rational decision making

(Salovey, 1999) this review is also an attempt to connect the emotional and rational

domains at the individual, team and organisational level. We will use Schwandts

dynamic organisation learning model as the pivotal transmission medium to produce a

unique social system, corporate energy and ultimately corporate alchemy(Schwandt,

1995).

A systems approach to organisational development

From a systems perspective, organizational development is defined as a process that

focuses on organizational culture, processes, and structure (Burke, 1985) in an effort to

optimize the organizations relationship with its environment.

Organisational development attempts to leverage human capital by focusing on the

effectiveness of individuals, teams, and the organisations human, social, political and

emotional interaction processes (Keene, 2000). Organisational development also tries to

attune the development of the organization and the individuals that compose it such that

goals and purposes of the organization are attained at the same time that the human

values of individuals within it are furthered (Burke, 1985)

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Types of change

It is an organizational reality that responding to change effectively ensures survival and

sustainability. There are two basic types or levels of change project. The first is radical

change, which operates at an organizational level and aims to transform and renew the

entire organization. This type of change is normally strategy-driven. The second type, or

level of change, is small-scale, localized or incremental change, which aims to change or

improve a small part of an organization. The two can be, and indeed should be,

connected. (Burnes, 1992:242-243). Change is not effectual if the buy-in or emotional

commitment of the actors in the change process is not leveraged. Bennis (2001) maintains

that real change involves getting an entire organization, not merely a few managers, to

adequately grasp the importance of building up emotional competencies in addition to

intellectual ones.

Change leaders

Leaders are able to create conducive environments that encourages their followers

towards self-development and the goals and purposes they choose (Senge et al, 1994).

Executives as change leaders are fundamental to the success of any change initiative from

a process, sponsorship, and moral support point of view. Middle managers live with the

effects of change. Their skills and proficiency, as well as the mental or emotional

positions adopted by change leaders as change implementers and change managers play a

pivotal role and often make the difference between successful or unsuccessful change

(Dalziel and Schoonover, 1988).

Power relations, emotion and learning

Vince (2001) provides a conceptual framework based on the inter-relation between

politics, emotion and organizational dynamics underpinned by the following premises;

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1. Learning processes are directly mediated by power relations

2. Emotion determines the possibilities and limitations of both learning and

organizing

3. There exists organizational dynamics which are more than the sum of individual

or collective learning.

He states further that: My overall proposition, which combines these three premises, is

that organizational learning is visible via the organizational dynamics created from the

interaction between politics and emotion (Vince, 2001)

Nadler and Tushmans (1992) Congruence model of organizational behaviour

This model has application in furthering one of this studys founding premises that the

organization and the resultant organizational behaviour is best described as a system of

interrelated and interconnected components:

The task (work activity in which the organization is engaged),

The individuals, (the characteristics of employees or members, their individual

knowledge and skills, needs and preference, perception and expectations,

demographics),

The structures and procedures that are explicit and formalized to perform tasks

consistent with organizational strategy,

The informal organization or implicit, unwritten arrangements that emerge to

exert considerable influence on behavior and are described as organizational

culture. They may aid or hinder organizational performance and are influenced by

leadership, values, beliefs and relationships within and between groups.

Systems thinking

Systems thinking is a means of combining multiple mental models in such a way as to

recognize the multiple perspectives of the different stakeholders, as well as to place the

result into an organizational context.

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Senge (1990:68) describes systems thinking as a discipline for seeing wholes, for seeing

interrelationships rather than things, and for seeing patterns of change, rather than static

snapshots of the world. As such, cognitive maps could be described as a systems thinking

oriented approach to understanding mental models.

Systems thinking has evolved as an approach to managing the complexity of

discontinuous change experienced in and around the modern organization as a complex

adaptive system, able to react to internal and external changes in an effort to maintain its

effectiveness (de Board, 1978).

Organisations are the sum of the individuals within them and something more than the

sum of their parts (Hollis, 1998). Organizations also embody a synergy which, as in

interpersonal relationships, can achieve no higher level of development than the

contribution individuals are able to make. (Hollis,1998: 104).

Organisations involved in management and leadership, recognise the importance of individual,

team and organisational learning to solve organisational problems and improve performance

in the face of discontinuous change. Learning involves gathering and processing new data and

information (Mezirow, 1990), adapting to changing needs in the environment (Maturana &

Varela, 1980; 1992), and utilising the preferences and skills of individuals to create knowledge

(Nonaka, 1991). Learning in teams includes additional cultural (Schein, 1993) social

(Bandura, 1997; Schutz, 1967,1971) and emotional (Goleman, 1997) dimensions. When

teams learn, they must account for the goals of individual members while managing the

overall goal of the group, coordinating individual skills and preferences, managing the difficult

psychological aspects of teams, and developing a common language to navigate a constantly

changing environment (Croswell, Kayes and Brown, 2002).

Affective events theory

AET is important when discussing emotions, organisational dynamics and learning

because it shows how emotional states are core to attitude and behavior. Mundane,

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everyday events have been shown to influence the way we think about our jobs,

employers and colleagues and emotional build-up can profoundly affect behavior and the

ability to learn and therefore effect change. The lesson for leaders from this theory is that

emotions in organisational settings should not be ignored even if they appear relatively

minor. Leaders need to pay attention to the emotional climate in the organization. It has

been suggested by Lord and Kamfer (2002) that If we can find ways to alter

organizational practices, social processes or task designs in ways that increase positive

emotions and reduce negative emotions, the welfare of organizational members is directly

increased.

Work EnvironmentWork Environment

Nature of the jobNature of the job

Requirements for Requirements for

emotional laboremotional labor

J udgmentJ udgment--driven Behaviorsdriven Behaviors

QuittingQuitting

AntiAnti-- or proor pro--s ocial behaviorss ocial behaviors

Productive workProductive work

Work AttitudesWork Attitudes

J ob s atis factionJ ob s atis faction

LoyaltyLoyalty

CommitmentCommitment

Work EventsWork Events

Daily has s lesDaily has s les

Daily upliftsDaily uplifts

Experienced EmotionsExperienced Emotions

Pos itive emotionsPos itive emotions

Negative emotionsNegative emotions

AffectAffect--driven Behaviorsdriven Behaviors

Impuls ive actsImpuls ive acts

S pontaneous helpingS pontaneous helping

Trans ient effortTrans ient effort

Pers onal Dis pos itionsPers onal Dis pos itions

Trait effect (pers onality)Trait effect (pers onality)

Emotional intelligenceEmotional intelligence

As hkanas y and Daus , 2002

Figure: 1

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In this model, the nature of the job and any requirements for emotional labour

affect behaviour and work attitudes, but most importantly, they result in work

events the daily hassles and uplifts that everyone at work experiences. These

work events, in turn, result in positive and negative emotions experienced at work

that influence both work attitudes (eg. Job satisfaction, commitment, and loyalty)

and affect driven behaviours such as impulsive actions or positive behaviour such

as spontaneously helping others or transient extra effort. Work attitudes have

longer term effects, such as a decision to quit, to engage systematically in anti-or

pro-social behaviours, or to engage in productive work. Finally, experienced

emotions are affected by personal dispositions such as emotional intelligence or

trait affect - a general tendency to be in a positive or negative mood(Ashkanasy

and Daus 2000: 77 Academy of Management Executive)

AET thus carries an important message to managers: Emotion in organizational settings and

the events that cause them are not to be ignored, even if they appear to be relatively minor.

The individual, group and organisational capacity to learn and therefore effect change can be

compromised.

Emotional contagion

De Beer (2002), states that Emotional contagion acknowledges that the observation of

anothers emotional expression induces a similar emotional state in the observer. People

automatically mimic and synchronize facial expressions, postures and movements with

another and converge emotionally. It seems to be a functional process that facilitates

social interaction and also facilitates an automatic and unintentional (pre-conscious).

People catch emotions from others (subtle, outside consciousness). It is difficult to

regulate and people become more at risk as their cognitive work load increases. Facial

expression and/or posture may be a more accurate reflection of their emotions.

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Mental models

Theories of mental models are useful for understanding how stakeholders bring multiple

perspectives to an organisational system. Mental models provides a basic theory for

understanding how people think about the world and provides a basis for understanding

cognitive maps, Kellys Theory of Personal Constructs and other ideas expressed in the

realm of Systems Theory (Fox, 1999).

Fox (1999) writes,

According to Senge, Ross, Smith, Roberts and Kleiner (1994:237), mental models are

the semi-permanent tacit maps of the world which people hold in their long term

memory, as well as the short term perceptions, which people build up as part of their

everyday reasoning processes. Mental models provide a framework for interpreting new

information and for determining appropriate responses to new situations, as well as for

guiding peoples perceptions, decisions and behaviour. They embody peoples

assumptions, beliefs, facts, and misconceptions about the world, and as such are an

interpretation, rather than an objective analysis of the real world. (Kearney and Kaplan,

1997).

We would concur with Senge, et al. (Senge, 1994:447) who asserts that the extent to

which the mental models of the different members of an organization overlap will have a

significant impact on that organisations ability to accomplish coordinated group activity

and learning. Similarly, Weick (1990:2) states that the world becomes stable only as

people ignore differences and attend to similarities.

Another representation of mental models are cognitive maps. These represent important

objects and concepts, and codes the relationships that constitute them. These relationships

might be causal, temporal, spatial and we would argue emotional. A cognitive map can be

conceptualised as a network of such objects, concepts and relationships. (Kearney and

Kaplan, 1997).

As is evidenced from the above, the literature surveyed in the area of systems thinking

does not accommodate for a systems ability to accommodate for emotions. The writers

are however encouraged by a recent request at the 2002 Society for Organizational

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Learning research Greenhouse by Senge to consider how we can include emotions in

system dynamics.

Individual learning and emotional intelligence in the workplace

Sumner et al (1999) writes that the key challenges for supporting individual workplace

learning are to support reflection-in-action processes by helping practitioners analyse

their work products and detect potential problems or opportunities. Systems need to

deliver relevant information to practitioners that they may be unaware of to assist their

reflections. (Sumner, 1999)

Studies have shown that productivity and length of employment of individuals is directly

related to the quality of the relationship with the immediate supervisor. In addition, those

employees who rate their bosses as good are four times as likely to stay (de Beer 2002).

Effective leaders therefore need to be seen as empathetic, supportive, trustworthy, and

able to model self management.

According to de Beer (2002), emotions have an important impact on trust in others,

perception of honesty, interpersonal relations, interpersonal attraction, group

commitment, openness to new ideas, creativity, integrative thinking, job satisfaction and

learning and memory. Goleman (2001) states that the primal task of leadership is to drive

emotions in the right direction to facilitate the aforementioned.

Emotional capacity

According to de Beer (2002) low emotional capacity is manifested by ignoring tensions,

avoiding conflict, blaming external causes, allowing failure to be seen as a reason for

despondency and despair and encouraging a negative environment with discouraging

interactions and failure. Conversely, de Beer (2002) defines high emotional capacity as,

confronting problems, effective problem solving, legitimising the discussion of emotional

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issues, seeing failure as constructive learning opportunities and enabling a positive

affirmative environment.

Kellys Personal Construct Theory

This theory is based on the fundamental postulate that a persons processes are

psychologically channelised by the way in which he anticipates events.

Given that the relationship between the emotional and the psychological is clearly

established (Salovey, 2002); that learning at the individual level has an affective, emotive

and cognitive component (Garvin, 2000); that Kellys 11 corollaries to this fundamental

postulate are very similar to theories about mental models and cognitive maps, the need

to link individual mental models, team learning and organizational culture or mental

models is becoming apparent. This is further reinforced by Kellys assertion that people

differ in their construction of events; that they evolve for their convenience a system

embracing ordinal relationships between constructs, and that people may employ

construct systems that are inferentially incompatible with one another. Kelly also

believed that peoples ability to interact in social processes with each other was

determined by the level of similarity in their construct systems. (Kenny, 1984)

Espoused theories and theories-in-use

Mental models, or cognitive maps, can typically be classified into two co-existing kinds:

espoused theories and theories-in-use. The espoused theory is the mental model which

people will say they hold if asked to explain or justify a given pattern of activity. This

may differ from the theory-in-use, which is the mental model that is implicit in the

performance of that pattern of activity. You cannot ask someone to describe their theory-

in-use, you can only hypothesise and test it by observing their actions. (Argyris and

Schon, 1996).

Varela (in Hampden-Turner, 1981:192) separates mental models between the left and

right sides of the brain. According to Varela, the right side of the brain contains the more

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complete and accurate representation of the territory, stored as a network of interrelated

concepts. This is also the domain of intuition and components of emotion. The left side of

the brain, on the other hand, stores smaller hierarchical tress of knowledge specifically

split off in order to provide accessible explanations of particular nodes. From this

explanation, it can be concluded that theory-in-use is housed in the right side of the brain,

while espoused theory, is housed in the left side of the brain (Fox, 1999)

The Baron EQ-i test

The challenge of learning in the context of social relations can be expressed in attempts to

engage with the paradox, uncertainty and complexity of management and organization

(Gerhardi, 1999). If adaptation to change requires learning, and change induces the

emotion anxiety, then ones capacity to manage that emotion needs to be assessed.

Reuven Bar-On, one of the pioneers in the measurement of emotional intelligence, developed

the EQ-I in 1997. Bar-On coined the term emotional quotient (EQ) and this terminology has

become synonymous with emotional intelligence (EI) today. The framework for the test is

designed around five meta-factors (the major grouping) and fifteen factors. The five meta-

factors are: Intrapersonal EQ, Interpersonal EQ, Adaptability EQ, Stress Management EQ, and

General Mood EQ. There are similarities between the ECI-360 and the Bar-On EQ-I, however

the Goleman framework does not contain the competencies of Reality Testing, Stress

Tolerance, and Happiness.

The EQ-I is a self-report measure that tests for emotionally intelligent behaviour (Caruso,

2002). As such, it combines the elements of competencies and intelligence in one test. It is the

most translated test available, having been translated into twenty-two languages. The multi-

lingual ability has allowed for the Bar-On EQ-I to have a large degree of normative data from

fifteen countries. The test consists of 133 items, 15 of which are inserted to assess response

validity. The respondent chooses a response to a question on a 5-point Likert scale. The test

takes approximately forty minutes to complete. There are extensive results showing reliability

and validity, as well as normative data for South Africa.

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Salovey (1990) believes that the only valid approach for assessing emotional intelligence is the

use of task-based, ability measures. Although self report inventories assessing various aspects

of emotional intelligence have proliferated in recent years these constructs according to

Salovey are difficult to distinguish from already-measured aspects of personality (Davies et

al., 1998)

Career Path Appreciation (CPA)

One of the tests applied in the case study was the CPA which assesses the personal level

of career development. The CPA can be described as an interview process facilitated by a

trained CPA practitioner. During the CPA interview the kind of decision-making the

participant appears to be comfortable with, as well as how the participant prefers to exercise

discretion in a work context, is explored.

The CPA provides an indication of an individuals innate (theoretical) capability with

regards to the complexity they can manage with currently and should theoretically

become comfortable at dealing with in the future. In this sense complexity may be defined

in terms of the number of different variables operating in a specific work context, the clarity

and precision with which they can be identified and their rate of change over time.

The idea behind the CPA process is creating mutual benefit for the individual and the

organisation. Ideally there should be as good a match as possible between an individuals

capability and the responsibilities with which they are entrusted. When this balance prevails,

the individual experiences a flow of energy connecting them to their work and sustaining

them whilst the organisation benefits by optimally utilising that resource.

Situations may occur where the capabilities of the individual do not match the scope of that

individuals responsibilities. If the individuals capabilities exceed their responsibilities, the

individual concerned could feel redundant and under-utilised and look around for another

focus for their energies.

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Alternatively, the responsibilities could be more than the individual can bear. This could

result in such an individual being stressed, feeling abused by the organisation and, generally,

being unable to cope with the demands of their position.

As indicated, the CPA indicates the current level of complexity that individuals are capable

(theoretically) of functioning at, as well as the likely longer-term development of individual

capability. It therefore serves as a bench marking / anchoring of the pace at which

personal development could proceed and offers assistance with the setting of realistic

time based career objectives.

The CPA also contains an unstructured problem solving exercise that yields a measure of the

persons problem solving style that is likely to manifest in the work place. No one style

should be interpreted as better or worse than another. This information merely provides

clarification on a preferred style.

Importantly, the CPA does not attempt to or propose to indicate where a person ranks within

a particular grading system. The CPA does not measure skills, knowledge and experience,

values and personality, all of which could influence the realisation of ultimate potential. It

concerns itself only with the capability to generate cognitive complexity and therefore,

should be used in conjunction with other forms of information (Combrink, 2002).

Theme of Work and Matrix of Working Relationships

Career Path Appreciation uses a model for explaining work, which is referred to as the

Matrix of Working Relationships. There are seven levels of work, each with a specific

value-adding theme and each concerned with providing a unique contribution to the

organisation or context.

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Level I work is concerned with the theme of Quality, Level II work is concerned with the

theme of Service and Level III work with Best Practice. These three levels are called the

Operational Matrix and it must work effectively for an organisation to be successful.

Work at these first three levels is concerned with Added Value for the Present and

represents the economic engine of organisations. Level IV is concerned with the theme of

Strategic Development and Level V with the theme of Strategic Intent. These two levels

are called the Organisational Matrix. The Organisational Matrix is often described as

being the domain of work actively involved with creating Added Value for the Future.

Team Learning

Sumner et al (1999) writes These days, teams and groups form the core work units in

many industries. However, while teams themselves are widespread, examples of effective

group practices are less so. The literature is filled with stories of dysfunctional group

working practices. Studies reveal that effective groups are good at perspective making

(Boland and Tenkasi 1995); i.e., they share customs, conventions and standard practices

that help to get the job done more effectively (Brown, Collins et al. 1989; Lave 1991;

Sachs 1995). It is precisely these often tacit customs and conventions that form best

practices. Our empirical studies of groups suggest that supporting communities to

evolve their own vocabularies and to elaborate them to create a shared domain model is a

critical step towards creating a common perspective (Sumner 1995) and an effective

community of practice. Shared vocabularies improve group communications; shared

practices improve group coordination during complex tasks. Over time, as communities

engage in negotiation and reflection about how to do their job better, their vocabularies

and domain models become more elaborate and formal; i.e., their tacit understandings are

articulated and refined towards more explicit knowledge forms. In many cases, they

enrich their tools and work products with formal representations of their domain models

in order to have better tool support for their work practices. The articulation and use of

explicit domain models reinforce best practices by aiding the consistent reproduction and

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interpretation of work products. We refer to these processes of elaborating vocabularies,

negotiating, and enriching as domain construction.

A key challenge for supporting group learning is to support domain construction

processes. Systems need to enable practitioners to articulate their informal

understandings, to view and discuss their emerging ideas and domain models and,

importantly, to incrementally modify domain models as their understandings change.

(Sumner, Domingue, Zdrahal, 1999)

The learning subsystems that constitute the Schwandt dynamic learning model seem

adequate for this purpose. An elaboration of this idea will follow.

Emotional intelligence in the workplace: group and team focus

According to Jacobs (2002) core competencies of emotionally intelligent organizations

are: teamwork, collaboration, adaptability, achievement orientation, service orientation

they also tend to be more networked and flexible than traditional hierarchical

organizations. Therefore the converse must apply that in order to develop these

competencies one would need top work to improve the emotional intelligence levels

within the organization.

Group intelligence and group effectiveness

Emotions grow out of social interactions and have a pervasive influence in groups.

They affect how group members learn, interact and work together, they influence

collaboration and cooperation in relationships and are as such critical to the effectiveness

of the group. Knowing how emotions affect behavior in groups is useful for

understanding and predicting group behavior. Group norms influence the way group

members process emotions, and determines how emotions should be interpreted and the

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appropriate response.

Trus tTrus t

GroupGroup--identityidentity

GroupGroup--effic ac yeffic ac y

Conflic tConflic t

Detac hmentDetac hment

Figure:2 (de Beer, 2002)

According to Wolff (1998) respectful and supportive behavior among group members

fuel beliefs about safety in the group beliefs that in turn can create cohesion and group

satisfaction and, we would argue learning for change and organizational alchemy. (See

figure 2)

Druskat and Wolff (1998) further emphasise this view by maintaining that group

emotional intelligence is the ability to develop a set of norms that manage emotional

processes so as to cultivate trust, group identity and group efficiency.

The Emotional reality of teams

Research confirms the superiority of group decision-making. The exception is however

where the team lacks harmony and cooperation, disintegrates into bickering, power plays

and interpersonal rivalry and has a team leader who is not emotionally intelligent (Vince,

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2000). The emotional impact of what the leader says and does can create antagonisms and

hostility or inspiration and optimism. A leader skilled in collaboration can keep resonance

high, resulting in a friendly, cooperative climate, teamness and a positive outlook on the

future, a capacity to learn and effect change, raises collective self-awareness, and to

recognize underlying dissonance.

Primary and secondary processes in organisations

Mindell (1995) makes reference to primary and secondary processes. Primary processes

include the issues, goals and plans with which the majority of the group members

identify. The secondary processes refer to those which the group have more difficulty

identifying. These tend to be emotionally charged, uncomfortable, devastating or ecstatic

in nature. These processes might take the group by surprise, are not always planned and

may just happen to the group. A primary process is that which is uppermost in our

awareness, while a secondary process is that which lies beneath.

The border, real or imaginary, which separates primary from secondary processes, is

known in process work as The Edge. Mindell (1995) defines an edge as a block that

occurs when an individual or group, out of fear, represses something that is trying to

emerge. An edge is often connected to ones fear of change, and approaching an edge is

coupled with increased anxiety. There are numerous ways to recognize that an individual,

group or organization is at an edge. Cycling occurs when a group comes to an edge,

misses it and the same themes keep cycling back again and again. This is often the case in

organizations who contract to organizational change at a superficial level without

undergoing deep personal change themselves.

One of the ways of avoiding this behavioral cycling is to attempt to uncover the negative

behaviour patterns within the organization. This can be achieved by utilizing the Life-pi

test.

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The LifePi test

LifePi is a powerful management tool designed to identify behavioural patterns both in

individuals and teams. The group profile report back contains valuable insights and

information about a group of employees like a management team or a board of directors.

LifePi will reveal behavioural patterns for a group as whole. It allows the group to

become aware of the patterns that are beneficial. And those that are limiting.

Armed with these insights this awareness the group can continue as it has been. Or

it can start changing and developing

LifePis insights, therefore, can create real change and growth. They provide

suggestions for the group to be more effective and more successful.

Every human being has a set of beliefs, or principles, which help him or her understand how

the world works or should work. When peoples beliefs are challenged by someone or

something- a behavioural cycle is set in motion. Causing colleagues to respond. And often

setting up a self-reinforcing cycle for the person. Many behavioural cycles are invaluable: they

make people good at what they do. They drive them. But some cycles can be limiting. They

can prevent employees from realising their full potential.

The same principle applies to a group or a team of people.

Most people let alone most teams - are not aware of all the components of their patterns.

They may find themselves wondering why they always do this or that. Or why certain things

always happen to them. Their patterns manifest in deepening layers.

By becoming aware of triggers and behaviours, a team of people will gain greater insight into

its unique strengths (See Figure: 3). It will recognise when it is being drawn into repetitive

behaviour. And, as a result, it will be able to break free of its limiting patterns.

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In the Group Profile Report, the insights gained from the combination of the members unique

patterns are interpreted into a profile of group behaviour.

LifePi requires a group of six or more people. (There is no upper limit.) Once every member

in the group has completed the LifePi questionnaire, a Group Profile can be determined.

LifePi assesses four areas for each person: triggers feelings, and behavioural

responses. And it assesses other peoples responses to those responses. (See the

diagram below.)

LifePi then does a frequency count of the triggers, feelings, and responses (and others

responses) for the entire group.

These are then scored. The behavioural patterns found with regularity and consistency

become the group profile.

LifePi is then able to make clear, pragmatic suggestions for the growth and development of the

members of the group. It will also indicate valuable changes in interpersonal dynamics for

members of the group.

Having been assessed as part of Group Profile, every individual within a team can see exactly

how and where he or she fits into the team. This therefore forms part of a team learning

process, which in turn impacts the organisational learning process.

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Figure 3: The Life-Pi cycle

Organisational learning

A learning organization is one that facilitates the learning of all its members and

continually transforms itself to adapt to its changing circumstances. Conditions for a

climate of learning include the perception of learning as a cyclical process, a free flow of

authentic information, the ability to reframe information at the strategic level, valuing

people as the key asset, and an acceptance of the different roles of policy, strategy and

operations within the organization (Garrat, 1990). Creating and nurturing a learning

organization that develops the capacity to adapt and change is vital (Nolan et al. 1993).

Considering organisational learning as a social process (Easterby-Smith and

Araujo,1999) sees a shift away from the idea that politics is problem in the way of

learning (Argyris 1990); or that political activity is a constraint on learning (Senge,1990).

Politics is seen as a natural feature or organising and learning, and it is recognised that

power relations directly mediate interpretive processes within organisations (Coopey,

1995; Coopey and Burgoyne 1999). It is important to acknowledge the political nature of

2. Feelings the experience of all too familiar emotions

1. Triggers include incidents that provoke reactions

4. Others response Reinforcing the trigger

3. Your response People start behaving in familiar ways

The Group Credo About people and the world

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information and knowledge, and how information and knowledge are expressed in power

relations.

Organisational culture

Cartwright and Cooper (1996:60) in Kirsten (1999) provide examples of how culture is

defined in the literature;

Culture is taken to be the shared attitudes, values, belief and customs of members

of a social unit or organization (Martin, 1985)

Organisational culture .shared meanings patterns of belief, symbols, rituals

and myths that evolve across time and that function as social glue (Smircich,

1985)

fairly stable taken for granted (set of)assumptionsmeanings and values that

form a kind of backdrop for action (Smircich, 1985)

A pattern of basic assumptions invented, discovered or developed by a given

group as it learns to cope with its problems of external adaptation and internal

integration that has worked well enough to be considered valid and, therefore,

taught to new members as the correct way to perceive, think, and feel in relation

to those problems (Schein, 1985)

Organisational culture therefore, describes a set of pervasive ways or norms that underpin

a deep set of beliefs about the way work should be organized, authority exercised, people

rewarded and people controlled (Handy, 1993). Saloveys (1990) assertion that emotions

are managed, used, perceived and understood becomes integral to changing or sustaining

a particular organizational culture.

Organisational climate

Organisational climate according to Ogbonna and Harris (1998) is distinct from

organizational culture, power or politics. They refer to Schneider and Rentschs position

that climate refers to the history and norms and values that members believe underlie

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climate. why do things happen the way they do? (Ogbonna et al., 1998:36). In order

to further clarify the distinction between culture and climate it is useful to refer to the

following statement: Organisational climate is a relatively enduring quality of the

internal environment of an organization that is experienced by its members, influences

their behaviour, and can be described in terms of the values of a particular set of

characteristics or attributes of the organization (Tagiuri and Litwin, 1968). According to

Goleman (2001) creating HR practices that foster EI is a key to supporting resonance and

a healthy emotional climate.

Cartwright and Cooper (1996) make reference to distinct types of organizational cultures;

Patriarchal and autocratic power culture

Role culture

Task and achievement culture

Person or support culture

Some organizations may develop a particular type while others might be composed of a

number of these in certain areas of their business. With each of these types of

organizational culture there is a susceptibility to unique configurations of power relations

emotions, learning, and organizing.

Becoming a Learning Organisation

Modern organizations are composed of individuals and communities each with highly

specialised knowledge, skills, and technologies. In this context, according to Sumner

(Sumner, 1999) a key challenge for organisational learning is to support perspective

taking. Systems therefore need to support knowledge sharing across workplace

communities and across time. However, sharing knowledge is different from simply

sharing information people need support for interpreting each others perspective and

for negotiating a new, shared perspective.(Sumner et al, 1999)

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Various models have been proposed that explain the process knowledge sharing. A

particularly model that takes into account all of the aforementioned elements is

Schwandts dynamic organisational learning model.

Schwandts Dynamic Organisational Learning Model

Schwandt presents a model of organisational learning that has evolved from the application of

systems thinking and chaos theory to the theory of social change within human collectives

(Schwandt, 2000). This model is useful because it offers a view of how organisations respond

to crisis or a critical event not through the more commonplace lenses of leadership, culture,

environment, structure or strategy but through the lens of how learning processes are

employed in an organisation.

Schwandts model (See Appendix G) focuses simultaneously on organisational performance

and learning so that we can better deal with changing environmental conditions.

(Schwandt, 2000). Furthermore the model assumes that systems of social action are non-

linear, open and inherently evolve to higher levels of complexity. A reductionist approach to

organisational complexity is replaced in Schwandts thinking with chaos theory, duality,

spirituality, and self-organising systems.

Grounded in Parsonian theory, Schwandts organizational learning model focuses on the

learning aspect of an organization as a social system. It provides a way of viewing

organizational behavior that can explain how people in an organization collectively

engage in the dynamic social actions associated with learning. Organisational learning

here is defined as a system of actions, actors, symbols, and processes that enables an

organization to transform information into valued knowledge which in turn increases its

long run adaptive capacity. Learning is focused on the systems ability to adapt to its

environment, not just through a performance orientation, but rather through a creative

capacity that influences the cultural values of the collective (Schwandt, 2000).

Schwandt postulates four learning subsystems that carry out the functional pre-requisites

for the learning system;

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1. Environmental interface (adaptation) functions as the informational portal for the

organizational learning system,

2. Action and Reflection (goal-attainment) creates valued knowledge from new

information.

3. Dissemination and diffusion (integration) exists to transfer information and knowledge

among the subsystems,

4. Meaning and memory (pattern-maintenance) provide the foundation from which the

other subsystems draw guidance and control.

These learning subsystems are not independent: dysfunction in one learning subsystem

will jeopardize the effectiveness of the whole system. Each learning subsystem requires

inputs from the other subsystems. This interdependence is accomplished through the

exchange of concrete patterns of traditional organizational variables. These patterns are

called the media of interchange These media are described as;

1. New information: internal and external data, customer feedback, employee survey

2. Goal referenced knowledge: results of an experiment, evaluation results, decision-

making processes, and knowledge structures.

3. Structuring: organizational roles, leadership, policies, organizational structure,

Group norms

4. Sense making: Schemas and scripts, language and symbols, values and basic

assumptions

The case takes this model one step further by placing it as the connection between

individual mental models, team learning and organizational mental models or culture. In

doing this we are able to articulate a new model, which sweeps in multiple perspectives

and existing organizational patterns of action. We present this model called The

Organizational Alchemy model in the case.

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The Case Study

Introduction

By November 2001, ABC Financial Services (a subsidiary company of ABC) had

enjoyed 9 years of good growth. What started as a relatively small entrepreneurial

company within a large corporate had grown to the stage where it employed 500 people,

developed a host of successful products and boasted more than 1 000,000 customers.

David Peters, the managing director, had put in place a young and dynamic team that had

brought the company to a point where he was questioning whether they had the capacity

to take the business further, both individually and collectively. The company relied on

these seven people, known as the Group Heads to provide the vision and strategy going

forward. They consisted of a HR Head, Operations Head, New Business Development

Head, Finance Head, IT Head, and a Marketing Head. The next level of management

consisted of 8 functional managers or heads. This two-tiered management structure was

described by Peters as being non-hierarchical and flat (See Appendix A Management

Organogram).

The company was moving through the Go-Go phase of the Adizes Life Cycle model

(see Figure 1) (Adizes, 2002). Peters realised something had to be done to ensure the

company continued through its adolescence and into Prime, a position where the

business is performing to expectations with a high degree of trust amongst the employees.

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Figure 1. Adizes Life Cycle Model (Adizes Institute 2002)

On several occasions he discussed the teams position with Johan Kimmel, the Human

Resources group head. They both felt that the team held the capability to do the job.

However, an intervention was needed to increase the collaboration and trust within the

team, thereby unlocking the potential to take the organisation further.

We couldnt continue to work the way we were working even though it was going well and there were no significant problems, but it wasnt at a level that would take us to the next thresholdsuccess had become our biggest enemy (Kimmel)

At around the same time Kimmel, also started noticing contradictions between what

people on the team were saying in meetings and what they were actually doing after these

meetings. The group heads said they got along. In reality, though, people were not

collaborating, there was no real sharing. The team said it supported each other. In reality

though, people worked alone, concerned for their own output and survival. There was a

ABC Financial Services

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distinct difference between the espoused theory of how they worked together and the

theory in use (Argyris and Schon, 1996). There was a lack of transparency, a lack of

honesty, and a lack of confrontation. Trust within the group was at an all time low.

These problems within the team were quite apparent to the rest of the organisation as

well. The functional heads did not see the group heads as a powerful focused unit, but

rather as a group of individually competent people who were fragmented and ineffectual

as a team. Something had to be done.

[the team was]fragmented because of divided loyalty and in terms of alignment around

operating execution. There are no strong decision takers. The team doesnt work

soundly because of relationships not because of bad business calls.

(Non-group head employee)

The team had been through various interventions, in the past, in order to improve

communication and align their strategies. Kimmel felt that it was perhaps time to

undertake another one of these team-building and alignment workshops. However, he

was concerned that continuing to do more of the same interventions would not yield

results any different to what they had already achieved. He wanted to go deeper, to affect

a change that would move not only the individuals involved, but the team, and eventually

disseminating into the rest of the organisation. Kimmel realised that what was required

was beyond an alignment workshop, beyond a team-building weekend. In order to

unlock this potential they needed to understand the groups strengths and weaknesses.

But before this could be achieved, the individuals within the team had to understand

themselves more thoroughly. Only through the individual understanding of their own

strengths and weaknesses, and their role in the team, could the true potential of the group

be realised. Kimmel decided to have a chat with Janet Sullivan, an industrial

psychologist, to see if anything existed that could produce this result.

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Sullivan had been working with Emotional Intelligence testing over the past two years,

and felt that this was a critical component that would assist both the individuals, and the

team, in understanding their strengths and weaknesses. Together with Kimmel and

Marilyn Fraser (the groups industrial Psychologist), they constructed a programme they

felt would address the problems being experienced in the group heads team, and unlock

the potential needed to move the company forward.

Many questions probed Kimmels mind: How would he get the team to buy into the need

to undertake this intervention? Would people feel threatened by the testing component of

the intervention? Had he chosen the right tests to achieve their aim; what would the

expectations of the group be? And, How long would it take until they saw a benefit, if

any was to be seen?

All these questions, and more, were to be explored throughout the time of the

intervention. Some would be answered, and some remain unresolved, reliant upon the

passage of time in order to fully answer some questions.

The Work Climate and Culture of the Company

Kimmel approached the MD and explained the potential intervention plan. Peters agreed

that this was what was necessary, and asked Kimmel to run with the project. In order for

the project to be successful, Kimmel would require the support of the entire management

team. He wanted to ensure that a reluctant participator would not sabotage the entire

process. In order to achieve this, he approached the team with the idea and explained the

intervention. Here is an opportunity for real personal insight, on a deeper scientific

level, Kimmel explained. The intervention was sold on the value to the individual of

getting objective feedback from a professional with no vested interest in the current

system. It was more from the point of view of a personal development opportunity, than

a business opportunity that facilitated support for the project. Everyone agreed that it

would be a good idea to go forward with the intervention.

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The date for starting the intervention was set as February 2002. In January 2002, ABC

Financial Services holding company decided to alter the lines of reporting and requested

that several department group heads (HR, IT, Finance, and Marketing) report, not only to

the MD of ABC Financial Services, but also into the respective department head at ABC

corporate. This affected four out of the seven group heads (See Appendix A for the old

and new structure). The effect was described as frustrating by some. It threatened the

independence that the company had enjoyed until this time. It also marked a bigger

change that the company had been going through, and that was the change from an

entrepreneurial company to a more mature, and corporate environment. One of the

members of the team had been reporting into head office for some time and so this was

not new to him. However, it took some adjusting for the other members who suddenly

found themselves having to answer to more than one person. Some of the team described

having feeling of immense anger and betrayal at the time over this change in reporting.

There was also the looming threat that their positions could be rationalised into ABCs

corporate realm.

There was concern about implementing this intervention at this time of change and flux

within the organisation, however, it was decided to go ahead as planned.

The company was very task driven. Due to its entrepreneurial roots, the employees

worked in very loose structures often needing input from areas outside the realm of their

expertise. Collaboration therefore, was important to maximise success in this

environment.

One of the concerns that employees, outside of the group heads team, had, was the lack of

accountability. People are not held accountable, and there are very few consequences for

errors. Despite this however, the staff found it difficult to get management to make a

decision, and there was a definite tendency for people to avoid being the one who decides

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This lead to frustration as project deadlines were missed, with no consequences to the

person responsible for the delay.

the word accountability does not existsince I have been here I have not seen any

accountability at the top. There are no consequences that I am aware of, so I cant

understand why people are scared to commit to decisions made.

(Non-group head employee)

The culture of a company from the perspective of the group heads was seen as inclusive,

participative, exciting, fast-moving and entrepreneurial. Others in the company spoke

about a culture of distrust, with a lack of commitment and communication. Many

employees have defined a certain frustration about the feeling of having to fit in. There

is a pervading notion that one should not rock the boat, said one employee. New

employees feel they have to fit in, and those that dont, wont last long in this company.

This leads to a scenario that entrenches the status quo and makes for an extremely

difficult situation when one wants to affect a change in the company.

From interviewing the employees, it is clear that the culture of the company speaks from

two very different theories: The Espoused Theory and the Actual Theory (Argyris and

Schon, 1996). As far as decision-making is concerned, management felt they were

participative and inclusive in the process. The staff members below them, however,

viewed management as non-transparent and had low levels of trust in them. They felt

that opinions were asked for, but not really taken into consideration. The espoused

theory is that management in the company is flat and non-hierarchical. However, the

view from the employees was that decisions get made at the top. This apparent

disconnect between how management would like to be perceived and the actual

perceptions is shown in Figure 2.

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Figure 2. Group Head Self Perceptions and Non-Group Head Employee Perceptions on

Culture and Climate of Company

In describing the company as a stressful environment, the employees interviewed scored

the company as highly stressful, 8 out of a possible 10. Employees rated the degree of

challenge in the work environment as an 8 out of a maximum of 10.

It became clear, that these differences in the perceptions at the different employee levels,

was a reflection of the diverse mental models that the individuals held. These mental

models provide the framework for interpreting new information, and determining

appropriate responses. In turn, the collective mental models of the employees in a

company, come together to form part of the organisational culture or the organisational

mental model. Therefore, in order to effect a change in the organisational culture or

mental model, one would need to effect a change at the individual mental model level.

One of the aims of the intervention was to examine the mental models of the group heads

in an effort to facilitate a change at the team and organisational level.

0123456789

10

Group Heads SelfPerceptions

Other Empl ExtPerceptions

TrustTransparencyInclusiveStressfulChallenging

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The Intervention Plan

Due to the busy nature of the individuals involved, the dates for the entire program were

not scheduled at the beginning, but rather co-ordinated closer to the time of each stage.

The project schedule was as follows:

1. Individuals in the group heads team undertook emotional intelligence testing, Life

Path Insight testing, IQ Test, and a Career Path Appreciation test.

2. Feedback was given on all of these tests on an individual basis, with

approximately 1 hour available for general discussion.

3. A team day was held where the groups strengths and weaknesses were analysed,

as well as the group behaviour, concluding with contracting on the norms for

future behaviour.

4. A second team day was held to discuss progress and issues.

The tests used were:

The Baron EQ-i (Emotional Quotient Inventory) a self reporting test that

measures emotionally and socially competent behaviour providing an estimate of

the individuals emotional and social intelligence.

The WAIS IQ Test

LifePi - An on-line questionnaire which reveals the behaviours inherent in the

group.

Career Path Analysis (CPA) Through personal interviews and problem-solving

exercises.

(Detailed description of these tests can be found in Appendix B)

In total, there were eight hours of testing completed. Interestingly, no one felt that the

tests were too long or drawn out, and all felt that they were relevant. There was some

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concern as to the testing protocol for some of the tests and some felt that testing in the

late afternoon would affect their results due to tiredness or fatigue.

Some of the testing was done at the end of a hectic workday. Im sure that it had an

impact on how we answered some of the questions. You know, you had the feeling that it

was enough and you wanted to get it over with.

(Group Head)

The timeline for the intervention programme, as it occurred, is depicted in Figure 3.

Feedback on the Career Path Analysis was given immediately, while the EQ-i, and IQ

test results were given some two months later in individual sessions. The time period

between testing and feedback was described as too long by the participants and the

consultants alike. It was agreed that a shorter time would have been more beneficial, in

terms of recalling the tests. It was agreed that the teams LifePi results would be

discussed at a Team Day to be held later that year.

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Feb 2002Indiv. Testing

April 2002Indiv. Feedback

28 June 2002Team Day

28 October 2002Team Meeting

Coaching Offered

Figure 3. Timeline of Intervention Programme

The Aim

The project carried expectations on three fronts: the individual, the team and the

organisation. Figure 2 illustrates how when these needs and objectives are aligned the

organisation experiences what we have termed Organisational Alchemy. This creates a

space where collaboration is maximised as people work towards a common goal.

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OrganisationsNeeds

Individual Needs

Teams Needs

OrganisationalAlchemy

Figure 2. Alignment of needs creates Organisational Alchemy

The aim of the project was to attain an understanding of the teams strengths and

weaknesses by working with, and examining, the individuals in the team. Through this

process, the group would uncover their behaviour patterns and contract to new behaviour

patterns that they wanted to include in their daily business lives. At the same time they

would contract to stop negative behaviour patterns that were affecting the team. By

aligning the individuals needs and wants to the shared needs and wants of the group, the

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