The persistent high failure of change and transformation initiatives, to meet their expected outcomes, even with prevailing change management process and knowledge, has driven our need to understand what influences a human systems capability to change, and how can organisations achieve true Agility. Dynamic Systems Maturity Theory research has taken us a giant step forward in understanding how we can better manage change and transformation, and more importantly by the application of the theory improve the success rates of change and transformation initiatives. This paper introduces DSMT and its application to organisation change through the Organisation Capability Maturity Framework ( OrgCMF™).
Authors: Dr. Myles Sweeney & Mr. Declan Kavanagh
DSMT is a scientifically-based system of facts and ideas that draws on Systems Theory, Learning Theory, as well as Psychology, Organizational Science and Economics. It defines for any target human system, its level of Learning and capacity for change, as evidenced in patterns of its functioning, and guide it to optimal functionality, and to redress problems of very poor change/development outcomes as well as historically low productivity.
At its core is a scientific-based, normative model of 15 distinctive and definitively described Learning Stages (Maturity Stages) that can be measured for any human system – Individual, Organization or Economy – as well as their sub-systems and their activities. In effect, this Systems Learning Theory now enables intervention/change actions to be calibrated at the system’s ability to learn, and thus assure Traction. It provides a clear roadmap to the highest levels of maturity for the system, maximising Sustainability, thereby addressing the two critical points of failure for prevailing approaches to Organization Development and Change Management (ODCM).
The beauty of the DSMT modelling of organizations is that we can at last understand them as dynamic systems, rather than linear chains of command; we can target change management at the level of performance and adaptive capability rather than shoot blindly; we can graphically look at inadequacy across all functionality and see what is wrong with legacy systems and management; we can target exactly what needs to be rooted out; we can understand and counteract the process of Inversion which acts as a drag towards the lower levels of functioning in all human systems; we can pitch interventions at diagnosed levels to gain traction; we can provide normative step-by-step guidance for sustainability; we can offer one integrative language and framework for people, teams, organizations, markets and economies for systemic effectiveness; and we can describe what sustainable success looks like in newly defined Levels of Organizational and Leadership Advantage.
Along with the problems with change interventions, the other ongoing problem that OrgCMF™ addresses is that organisations, as complex human systems with sets of sub-systems, have to increase their capacity to deal with the increasing complexity which they face in the world including:
To deal with these complexities, organisations desire to be more Agile, Innovative & Collaborative as means to building and maintaining their performance advantage, and there is a 300% premium for doing so (Hamel and Zanini, 2017). Achieving these ambitions is not as straightforward as existing linear management practice can cope with, because we are dealing with many different and interdependent components of the organisation system and its sub systems. However, DSMT now provides us with a model to deal with complexity for an organisation by focusing on the Capability Maturity of that system, where Capability is defined as the ability to mobilise resources to achieve specific outcomes.
The Organisation Capability Maturity Framework describes the system in its sub-systems (Dynamics) and each Dynamic’s Building Blocks (Constructs) as what drives organizations, and applies the learning levels of DSMT to each component which can be used to build capability to transform, transition and/or continuously improve Capability Maturity, and achieve the target outcomes, performance level, and the desired Agile, Innovation and Collaboration practices.
OrgCMF™ presents its primary Maturity Model the Organisation Maturity Index (OMI) as a comprehensive Body of Knowledge and Assessment Tool covering all key Organisation Dynamics underpinned by DSMT. Each Dynamic represents the individual sub-systems of an organisation and can be selected and addressed individually or in clusters depending on the target outcome/objective. OrgCMF™ includes other models that combine and add to existing Dynamics to address specific Business Issues, such as Collaboration, or Merger & Acquisition Integration.
Organization development (OD) is typically defined as a deliberately planned, organization-wide effort to increase an organization's effectiveness and/or efficiency, though with varying emphases. For example, Vasudevan has referred to OD being about promoting organizational readiness to meet change, and it has been said that OD is a systemic learning and development strategy intended to change the basics of beliefs, attitudes and relevance of values, and structure of the current organization to better absorb disruptive technologies, shrinking or exploding market opportunities and ensuing challenges and chaos.
DSMT proposes that what should be deliberately planned is the significant turnaround needed for Disintegrative Systems that brings them through the model’s Levels, but that the projected Agility means development becomes an ongoing systemic capability.
The problem is that in contrast to these aspirations, many commentators have observed that we are still effectively stuck in a bureaucratic rather than developmental paradigm that is still legacy from the simpler times of the Industrial Age – it is simply not suitable for the dynamism of the Information Age.
This deficit for prevailing Organisation Development / Change Management, is seen in research findings that have consistently shown over the years, an unacceptably high proportion of negative or neutral collateral effects arising from organization-development interventions (e.g., Dean and Baden Fuller 1999; Macy and Izumi 1993; Wischnevsky and Damanpour, 2006; Tushman and Rosenkoph, 1996) and are estimated at 70% by Kotter (1995) as well as Keller and Aiken (2008), and Bloch et al. (2012) for IT-related projects alone. Even Mergers and Acquisitions which are typically undertaken based on analyses that show good probability of success, still show 50% failure rates relative to market average performance after 3 years (Grogan 2014).
For all the progress since the Industrial Revolution and over the past 3 decades of the Information Age, we have failed to offer any hope of significantly reducing these failure rates until now.
The same problem is the cause of the worrying decline in workplace productivity over recent decades, despite technological advances. For example, as outlined by Alan Blinder former vice chairman of the Federal Reserve in the Wall Street Journal of 14th May 2015, US Productivity has fallen from “2.6% per annum from mid-1995 to 2010, but only a paltry 0.4% since”, and the answer according to research such as that of Gary Hamel, is more Agile functionality which is associated with the 2 highest of DSMT’s 7 Levels, putting such functionality within a concrete developmental path rather than mere aspiration as it is presently for 70% of organizations.
The need for applying DSMT to organizations is simple – the complexity of demand has far outstripped the sophistication of management paradigm, so there is a need to move towards Development as paradigm and as a way of operating rather than an occasional tactic; so, in management speak – development must become integrated process and robust capability that this model (OrgCMF) provides, rather than a series of relatively disjunctive events. In summary, the evidence for the gap in sophistication includes productivity at record lows; an attested inability to deal with complexity which comes from the demands of the speed of change in technology, markets, law, politics, etc., to the requirements of knowledge-cultured people; and appalling failure rates for change interventions, mergers, etc.
Above all, DSMT is a significant step forward in the drive for more Integrative OD solutions in recent decades that seek to increase employee training and involvement in process improvement and have been the leading channel to significant increases in organizational effectiveness. Total Quality Management (TQM) has been described as an integrative philosophy of management for continuously improving the quality of products and processes (Ahire, 1997). Six Sigma seeks to improve the quality of process outputs by identifying and removing the causes of defects which are defined relative to customer expectations and minimizing variability in manufacturing and business processes. Lean Manufacturing or Lean Production aims at eliminating wasteful expenditure of resources, while Lean Dynamics is a business-management practice that is distinguished by its different focus of creating a structure for accommodating the dynamic business conditions that cause such wastes to accumulate.
One study that is presented as a balanced appraisal of these methods deduced that the source of performance advancements was not the tools and techniques of TQM but the culture, empowerment and commitment that came from successful implementation, and concluded that “these tacit resources, and not TQM tools and techniques, drive TQM success”, and that “organizations that acquire them can outperform competitors with or without the accompanying TQM ideology” (Powell, 1995). This kind of finding indicates that it is the very integrative nature of these approaches that bring sustainable progress in organizational effectiveness, and that is what OrgCMF™ is designed to do – maximise Integrative Capacity, thereby increasing newly defined Organizational and Leadership Advantage.
For further reading on Dynamic Systems Maturity Theory and its application to Organisation Development contact us to get a copy of the book (Contents listed below)
* Introduction 1 * The Need for Organization Development 3 * Integrative Organization Development Initiatives 3 * Productivity suffering from lack of Learning approach 4 * Inverted or Neurotic Leadership 5 * Economic Loss from Neurotic Organizations 6 * Integrative Vs Disintegrative Commerce 8 * The Need for Normative Learning Model: Failure Rates in ODCM 8 * Organization-Development as Paradigm 9 * OD as Organizational Learning 10 * Organizational Learning Level as Culture 11 * OD and Learning Culture for the Individual 12 * Philosophical Congruence between OD and DSMT’s Normative Learning Organization 14 * OD: Prevailing Models and Approaches 17 * GRID, Greiner, etc. * Job Characteristics Theory and Growth Need Strength 19 * Organizational Capabilities 19 * New Strategy for Systemic Organizational Innovation 20 * Mergers and Acquisitions 23 * The M&A problem of Alienation as Disconnection 25 * Learning Organization Approaches 26 * Evolutionary Learning Approaches 27 * Maturation Modelling 27 * Organizational Cognition 28 * Holistic Modelling of Organizations – EQFM 30 * DSMT as integrative of Developmental and Management paradigms 31 * The DSMT model of Organization Development 32 * Inversion Level / Zone 33 * Phase/Stage 1c Creative Destruction/Absorption 33 * Dark Bosses 34 * Rogue Bosses and Moral Hazard as Inversion 35 * 1b Disconnect / Inertia 36 * Disconnect of the Self-Correcting Mechanisms in Organizations 37 * Table 2.1 Phases of Development and Stages of Habituation in Organizations 39 * 1a Incubation / Insulation 40 * Monopolies without Regenerative Process as Inversive Organization 41 * State Monopoly as a source of Inversive Hysteresis for Organization 43 * Chaotic Level / Zone 45 * 1 Critical Singularity / Tropism 45 * Tropism in Organizations 48 * Critical Singularity effects in Lean Process 49 * Individualism in Organizations 49 * Embodied Power Vs Enabling Power 50 * Control and Defense Mechanisms 50 * Tropistic Business Leadership 52 * Destructive Greed in Organizations 53 * CEO Remuneration as Integrative 54 * Tropism in Health Care 55 * Recognizing Symptoms of Tropistic Influences in Human Systems 55 * Corporate Psychopathy 56 * A Historical Example of Organizational Inversion 57 * Market Perception of Tropism in Organizations 57 * 2 Critical Divergence / Reflexism 58 * Equilibrial Zone 60 * 3 Stabilization / Stable Equilibrium 60 * Stabilization Phase and Positive Principle of Appreciative Inquiry 61 * Stabilization: an example 62 * 4 Destabilization / Unstable Equilibrium 62 * Agency Theory and Corporate Psychopathy 64 * Operational Level / Zone 65 * 5 Operational Learning 67 * Training Vs Construct Development 68 * 6 Formal Operations: Process and Procedure 68 * Organizational Cognition: Critical Dynamic Capability 69 * Complexity Level / Zone 70 * 7 Complex Adaptation: Competitiveness 71 * Environmental Scanning: a Critical CA Capability 72 * 8 Adaptive Complexity: Sustainable Competitiveness 74 * Diversity and Economic Benefit to Organizations 76 * Creativity Level / Zone 77 * 9 Complex Creativity: Competitive Advantage 78 * 10 Creative Complexity: Organizational Advantage 80 * Organizational Advantage and Return to Organizations 83 * Leadership Level / Zone 85 * 11 Integrative Leadership 85 * Maturity as Leadership 85 * Leadership Dimensions / Constructs / Capabilities 86 * Catastrophic Degradation from Leadership Level 86 * 12 Regenerative Leadership 87 * Regenerative Vs Absorptive Capital 88 * Leadership as most valuable Organizational Capability 88 * Star Players as Leaders 89 * Leader Vs Boss 89 * Commercial Premium from Integrative Leadership 90 * Curbing Neurotic-Singularity effects in Organizations: whose job is it? 91 * Some Overview Points 93 * Values Theory as a Basis for Understanding Culture and DSLT 94 * Organizational Culture – that eats or drives strategy – as DSLT Maturity Level 96 * Organizational Values and Personal Fit 101 * Macro-Economic Cultural Values and Organizations: A DSLT Analysis 102 * Some Points on Applying the model 105 * Collaborative Capability as Advantage in the New Economy 105 * Achieving Organizational Complexity through Digital Aids 106 * Collaborative Platforms and Governance 109 * Macro-Level Corporate Collaboration 111 * Trans-National Collaboration 112 * Addressing Resistance to Change: Integrating Social Neuroscience 112 * Validation through Correlation with other O-D and Maturity Models 114 * Validation through Correlation with historical Turnaround and Growth Patterns 118 * Turnaround Case Study: General Ridgway in the Korean War 118 * Growth Patterns Case Study: Intel 119 * Towards an Integrative DSMT Turnaround: An example from BCG 121 * Validation through directly answering requirements of Systems Theorists 123 * Normative Learning System as Overarching Framework for Organizations 127 * Organizational Engagement 127 * Employee Involvement and Learning Culture 129 * Micro-Interventions 131 * Phenomenology and Diagnostic Data for DSMT 132 * Other Organizational Learning Theory advocating Shift from Linear to Integrative Organizational / Managerial Learning as proposed by DSMT 132 * Some Points of Insight through the Prism of the Model as a Whole 133 * Groupthink 133 * Edge of Chaos / Edge of Complexity 135 * Transparency as Maturity in DSMT 136 * Productivity: Resolving the Problem with Maturation Paradigm through DSMT 137 * Productivity as a function of HRM’s OD Capability 137 * Productivity as a matter of paradigmatic shift in organizations through DSMT 138 * DSMT and Organizational Trauma 143 * DSMT and Resilience Correlates 145 * DSMT and Production Programs: Total Productivity Maintenance (TPM) 149 * DSMT and Total Management Systems (TMS) 154 * DSMT and Six Sigma 154 * DSMT encompassing all of OD paradigm 155 * Disconnecting from the old Paradigm and Transitioning to the new way 155 * Agile Organization cannot be restricted by Linear Mindset and Culture 156 * Linearity as Psychological block to Innovative Culture 158 * Coaching against Linearity and Inversive Singularity 159 * Agile Organization by Definition as DSMT Maturity 160 * Agile Transformation through Maturity Modelling: some early attempts 161 * DSMT Maturity as Sustainably Agile Organization 162 * Agile as Beyond Linearity / Bureaucracy 163 * DSMT integrating new paradigm: Open-Innovation (Agile) Organizational Strategy supported by Economic-Development Policy 164 * Agile Innovation as a priority for Governments in line with DSLT 168 * Agile Organization: DSMT and the Workings 169 * The Agile Work Environment 173 * Preventing the Cardinal Error of Overshooting in Agile Transformation 178 * Agile Organizations: Beyond Linearity through DSMT’s Systems-Learning 179 * Agile’s Collaborative Hierarchy of Competence and Capability 181 * Agile Organizations: the hidden Maturity-Level reason behind the 20% Change-Management Success Rates 183 * DSMT as friend to the Linear mindset and culture striving for Agility 185 * Culture-Proof CM Process: the case of Japan 185 * Macro-Economic Development driven by Organizational Dynamism and hindered where such Dynamism is thwarted 189 * DSMT enhancing ESG for Organizational Analysis 190 * Conclusion 191
This is the core reference model to address all 15 Organisation Dynamics (or selected dynamics as appropriate to the business or operational issue being addressed) that are central to the organisations operation and performance.