Contracting is the initial phase of every OD project.

It sets mutual expectations for agreeing on

the OD intervention at hand.  The contract must involve the client, who has the decision-making
authority to see it through.  The contract is a necessary phase for both internal and external OD
practitioners because contract discussions often surface issues that need to be resolved.

The OD process of contracting for mutual satisfaction is core to the process of effective
organization development.  Many problems in life result from poor contracting.  Getting clear
expectations and guidelines established at the beginning of a relationship will allow that
relationship a better chance of success and survival.
 
Three major steps to the initial client meeting: 
1. Understanding the problem and exchanging wants,
2. closing the meeting by checking on client concerns and commitment, and
3. gaining agreement when the conversation becomes difficult.
Here are some question you need to prepare for ahead of time:
1)    What do you want from the client?  What do you need?  What do you desire?
2)    What are you offering the client? Personally, professionally, technically?
3)    What does the client want? List possibilities:
4)    Who is going to be in the room and can they make the decision?  Who’s missing?  What are
their roles, Who will benefit by this project?
5)    What resistance do you anticipate?
6)    What conditions would you not proceed?
How to Contract:
Before meeting with the client ask these questions:

1.    Ask these questions before meeting with the client:

2.    What do you want to discuss?
3.    Who is the client for the project?
4.    Who else will be at the meeting?
5.    How much time do we have?
6.    Do you have a project or is this an exploratory meeting?
Here are some factors that may be considered in the contracting phase:
Problem/Needs
·        What event(s) led to the conclusion that a change effort is needed?
·        What are the client’s needs?
Client Support
·        Could the client change priorities as the project progresses?
·        Does the client support the change effort?
·        Who will be involved? When?
Objectives
·        What end result(s) or trends are the client looking for?
Consultant/Client Roles 
·        What are the responsibilities, tasks, authorities, accountabilities, and level of commitment
on your part and that of the client?
·        How will we know if we are not working together effectively?
·        Defining team member roles includes task roles and process roles.
Results Measurement
·        What will indicate to the client that progress toward the objectives is being made?
·        How will these indicators be measured?
·        What are the deadlines?
Terms
·        What are the cost, budget, and payment schedule?
·        What is the schedule for work to be performed?
Commitment
·        How important is this project to the client?
·        Have the client and consultant committed the needed resources?
Follow-Through and Termination
·        When will the contract end?
·        Under what conditions can it be terminated or delayed?
Conducting the Contracting Discussion:
When you meet with the client to identify their need and begin the contracting, first identify
who is the client and who owns the problem.

1.    Meet the client and establish rapport.

2.    Ask the client to explain the problem situation.
3.    Communicate your understanding of the problem
4.    Acknowledge the unique aspects of their situation
5.    State the problem you think the client has
6.    Reassure the manager that you can help find the right solution and you can help
7.    State what the clients wants from the project and what he or she wants from you
8.    Surface any constraints.
9.    Confirm what you the consultant wants and offers
10.  Explain how you will work with them
11.  Restate actions that need to be taken
12.  Seek agreement to confirm what they want and what you want
13.  Ask for feedback and commitment
14.  Close for next steps
Overcoming resistance to contracting
·         Explore with the client directly about their reservations
·         If the client resists your offer, go back to the problem situation and restate the problem
·         Identify the resistance and offer solutions
·         Identify obstacles and remove the obstacles
·         Identify the real reasons for not moving forward – motivation, time, money
Debriefing the contracting
1)    How well did you handle the contracting conversation?
2)    What resistance did the client demonstrate?
3)    What reservations do you have about the client? Contract?
4)    Did the client have concerns?
5)    What would you do differently next time?
When you follow these steps you should be able to develop an effective contract that will
enable you to handle issues or problems more effectively if they are arise during the course of
your consulting project.

Organizational Diagnosis: What You Need to Know and Why

Organizations Need Our Help
May 17, 2016   (0 Comments)
Posted by: HRMAM
by Katie Furgoch, MNP LLP

Part 1:  Organizational  diagnosis- what you need to know

Organizational diagnosis is a creative method for getting to know an organization at all levels- from
the surface levels to the deepest hidden parts that aren’t visible to the eye. Performing
organizational diagnosis is not so far off from a doctor trying to diagnose their patients. Some
doctors diagnose differently by focusing on nutrition, food, and natural remedies, whereas others
diagnose by using chemical medications, or even by trying a remedy, seeing whether it has positive
effects, and then trying something new. This is very similar to what we have learned to do in the
business sense to organizations. Different diagnostic models can be used in different situations
depending on the wants, needs, and goals of our clients (patients).

Generally speaking, these models would be used by human resources or organizational

development and change practitioners who either work internally in an organization, or have been
hired as a contracted consultant to help figure out the root causes of issues an organization is facing
and to provide recommendations to improve them. In either case, the diagnostic models provide a
template or tool to break down the organization into components to understand it more in depth as
well as to better visualize how all of the parts work together. From performing the diagnosis alone, it
is often possible to begin to pick out issues that are present within an organization. In the cases I’ve
come across, diagnosis allowed me to go from knowing almost nothing about the organizations to
understanding the inputs to their organization which were derived from understanding their
environment, getting a handle of the strategy or the organization and the goals of the key
stakeholders, becoming familiar with the design components (structure, HR systems, technology,
management processes), creating a clear picture of the organizational culture, and finally,
understanding the organizational outputs and performance indicators based on the rest of the
organizational components. Not only did I understand the organizations well after that diagnosis, but
I was also able to see pieces of the organization that didn’t align. Because the diagnosis took a high
level view of the organization but also required deeper level analysis for completeness, it became a
relatively straight forward process to begin identifying inconsistencies and incongruences in relation
to the organization’s values and goals.

Diagnostic models can be within open systems or closed systems. Open system models (see
example above) suggest that all components within an organization are interrelated and that a
change in one component will almost definitely have an effect on other components. Open systems
resemble Lewin’s field theory which states that “the totality of coexisting facts which are conceived
as mutually interdependent” (Lewin, p.240, 1951)  and Myrdal’s principle of cumulative effect which
states that, with opposing elements, “a change in one brings about a change in the other, which in
turn brings on more change. The changes may be subtle enough to appear stable in what is actually
a constant state of adjustment. Most systems, however, comprise many interrelated elements,
making them far more complex” (Hickman, p. 174, 2010). Additionally, open systems models
consider the environment external to the organization and consider those effects on decisions and
changes. In effect, the external environment surrounding an organization will have an effect on the
inputs to an organization, the internal operations of an organization (strategies, HR systems,
processes, etc.), and organizational outputs (products, advertisements, etc.). This promotes the idea
that organizations are extremely complex interworkings of tasks, personalities, leadership, changes,
and decision making. Although this complexity is almost too overwhelming to consider all at once,
the open systems model supports the concept of the whole being stronger and more effective than
each individual component on their own. The open systems model is interesting in that it supports a
constant feedback loop throughout the process. We consider inputs (such as information, human
capital), transformations (such as social and technological components), and outputs (such as
products, services, and intellectual capital) all within the context of the external environment in which
the organization operates. Throughout each of these categories, there is constant feedback which
serves to carry the organization forward, or bring it back to rethink concepts, ideas, etc. that didn’t
work and need to be improved. This is similar to the idea of encouraging trial and error- try a lot of
stuff and keep what works (Collins & Porras, 2002). Communication can be considered an important
component in this model to ensure effective and timely feedback.         
The open systems model is a favored model due to the fact that most people believe that the world
is constantly evolving and changing at a pace that has become more rapid over the course of the
last decade or two. In order to properly diagnose and support an organization which is constantly
changing and having to adapt to their environment and changing customer demands, we must be
able to use models of diagnosis which support this flexibility and adaptability. The closed systems
model does not promote this type of flexibility and adaptability as it actually ignores the external
environment completely and focuses overly on the internal components. In today’s day and age,
ignoring external forces is a sign of a weak organization who is doomed for crisis or failure because
they will not be adequately prepared to deal with changes as they come. Additionally, closed
systems models support the concept of one right way of doing things. This limits the organization
and its team member’s growth because it is not promoting any sort of development or fostering any
organizational learning- which again is imperative in today’s ever changing world.

The organizational level diagnostic model is another type of diagnostic model that looks at an
organization from an external or high level viewpoint. Similar models can be followed at a more
detailed level which focus in on group level diagnosis and individual level diagnosis. The
organizational level diagnosis follows the open systems model in that it considers all parts to be
interrelated and that the environment plays a key role in the organization- especially in regards to the
inputs. Using the open systems model in practice has allowed me to understand how valuable and
useful this tool actually is. Our team’s process for using the diagnosis tool has typically been to first
understand the organization we were working with as well as the industry. We perform research and
interview members within the industry. We then create structured interview questions for some key
members of the organization we would be assessing. Not only do we have lengthy conversations
and interviews with multiple team members of different parts of the organization, but we also try to
be present around the organization’s offices, yards, and employees to observe some of the
organizational on goings. From there we go to documentation- it is a pretty simple and straight
forward process to divide up the information we’ve heard, written down, and observed into the
organizational diagnostic model. There are a few questions which have been helpful while working
through the process of using this diagnostic model: Do the Design Components fit with the Inputs?
Are the Design Components internally consistent? Do they fit and mutually support each other?
Within any diagnosis, culture plays a tremendous role due to the fact that it “is a pattern of shared
basic assumptions learned by a group as it solved its problems of external adaptation and internal
integration,… to be taught to new members as the correct way to perceive, think, and feel in relation
to those problems” (Schein, p. 18, 2010). Culture defines a group and their identity which becomes a
foundation and stabilizing force. The concept of culture implies structural stability, depth, breadth,
and patterning or integration (Schein, 2010). Culture is created by people, their beliefs, values, and
behaviors who grow to share common values through time and shared history. The strength of the
culture created by a group depends on the length of time the culture has existed, the consistency
and stability of members who are part of the culture, and the level of emotional attachment and
feelings attached to the shared history and past experiences (Schein, 2010).  Culture is a key factor
in the intervention process because, as research shows, for change initiatives to be successful
culture needs to be considered and there will ultimately need to be a culture change involved.
Studies show that “the most frequently cited reason given for failure was a neglect of the
organization’s culture…many efforts to improve organizational performance fail because the
fundamental culture of the organization – values, ways of thinking, managerial styles, paradigms,
approaches to problem solving – remain the same” (Cameron & Quinn, pp. 1-2, 12, 2011) Therefore,
in order for any changes to improve organizational performance, organizations will likely need to
endure cultural changes.

Typically, organizational diagnoses can be done when leadership has identified issues that they
would like to fix, or when things are going well within an organization but they want to continue to
further improve their performance. In either situation there exist two “major sets of problems that all
groups, no matter what their size, must deal with: (1) Survival, growth, and adaptation in their
environment; and (2) Internal integration that permits daily functioning and the ability to adapt and
learn” (Schein, p. 18, 2010). 

Part 2: The world of organizational

change and development- why businesses
today need our help
Growth requires adaptation and adaptive leadership. Adaptation involves changes. Effective
changes require establishing a sense of urgency, creating a strong team of change agents,
developing a vision and strategy (through careful and well thought out planning), communicating the
change vision to the organization, empowering team members to help and participate in change
initiatives, generating short term wins, celebrating success and producing more change, and finally,
anchoring the changes in to the culture to avoid reverting back to the status quo (Kotter, 2012).

There are many factors which contribute to an organization’s ability to successfully maneuver
through a transformation or turnaround situation and be able to sustain it. In order for a cultural
transformation to take place, organizations must begin their journey of change beginning with
creating a sense of urgency amongst their team. As teams move forward in the change process,
culture must be taken in to consideration, If culture is not considered in the diagnostic or intervention
process, it is likely that development or change initiatives will fail. Culture is the underlying values of
the organization and its people. It is the way they do things. By ignoring or failing to recognize the
core of the organization, those embarking on change initiatives are setting themselves up for failure.
There can be many ways to get to know and understand organizational culture- none of which beat
actually being there and experiencing it first-hand. Additionally, picking the right people to talk to,
and having thought of effective questions to ask beforehand better prepare you for getting accurate
and quality information. Finally, we must be aware that a shared view of culture may not exist
between different members of organizations. It is therefore important that practitioners consider
obtaining information from multiple sources and consider that in their diagnosis and interventions.
Perhaps there is a misalignment of values which is creating some of the issues- we wouldn’t know
unless we analyzed the culture.

Organizational interventions within the human resources department can also significantly help the
change process without taking on a large scale change strategy. Organizational interventions can be
thought of as small changes or tweaks to policies, programs, processes, technology, HR systems,
strategies, etc. which can in turn have a tremendous impact on organizational performance. The
idea with interventions is that they are small, relatively simple, and relatively cheap in comparison to
large scale, long term transformations. Organizations are not always convinced, don’t always have
the time, or do not have the resources to attribute to large transformations. Interventions are a good
tool to clarify goals, strategies and visions, create shorter term wins which work towards these goals,
and possibly test initiatives out in one department or geographical area prior to exposing an entire
national or global organization to change. Success of interventions on this scale could mean repeat
consulting engagements, increased organizational performance, and increased leadership and team
member buy in for further interventions or larger scale change initiatives.

“Whether formal or informal, interventions should do two things: reach people at an emotional level
(invoking altruism, pride, and how they feel about work itself) and tap rational self-interest (providing
money, position, and external recognition for those who come on board)” (Katzenbach et al., p. 116,
2012). Human resource interventions include activities such as: goal setting, performance reviews,
reward systems, informal or formal coaching/mentoring programs, manager or leader development
programs and opportunities, career planning and progression programs, plans for managing
workforce diversity, and programs for managing and improving employee stress and wellness.
Implementing programs such as these or making changes to existing programs only make sense
when organizations have a clear idea of their core values, vision, mission, and goals. Without
revisiting these first to ensure alignment, current relevance, and applicability in the organizations
current environment, interventions will not be effective. Once these things have been determined,
solidified, and agreed upon by key stakeholders, interventions can be created which again, align with
those values and goals. If interventions do not match the goals of the organization, team members
will be confused, get frustrated, resist change, and/or performance will not improve as hoped.
Interventions which make people feel good about being a part of the organization, make them
excited for what is to come, and most importantly answer the question “what is in it for me?” are
more likely to be supported by team members within the organization.

It can be argued that cultural interventions should be the first intervention we seek to implement
instead of the last. If culture is ignored throughout change or throughout many interventions, it
becomes such a big problem and blocker to success that many change leaders feel as though the
only way to continue to move forward is to take the organization through a complete cultural
transformation- which can be timely, costly, and painful. “Cultural intervention can and should be an
early priority- a way to clarify what your company is capable of even as you refine your strategy.
Targeted and integrated cultural interventions, designed around changing a few critical behaviors at
a time, can also energize and engage your most talented people and enable them to collaborate
more effectively and efficiently” (Katzenbach et al., p. 117, 2012).
Performing organizational diagnoses on organizations can help us identify the human resources
components of the organizations. From there, we are able to assess whether those human resource
systems “fit” with the organization’s culture (or desired culture), strategy, and goals. When we come
across elements of the human resource systems that don’t fit, we are able to suggest interventions
that would provide organizational alignment as well as offer employees added benefit in terms of
both tangible and intangible rewards. Tangible rewards included fair payment systems, reward
systems that match the work they do, regular feedback, improved performance review systems,
availability of training (technical, leadership, cultural, diversity), and opportunities for career
development. Intangible rewards included coaching/mentoring support, organizational pride, flexible
work arrangements to suit family and health needs as well as to decrease stress.

For example, we can consider an analysis of NASA’s attempt to implement open innovation (sharing
ideas and problem solving with other organizations around the globe) in response to budget cuts.
Their human resource systems can be defined as follows: unstructured work (many projects on the
go at once), there are no processes that determine how or what to study within the projects, there
are clear hierarchies and processes (which enables success in a field that needs such high expertise
and provides a method of how to do tasks based on who wants to work on what, whose skill set
works, etc.), a culture of not firing people, lots of contractors around the office (who were the first to
be let go during cutbacks), team members treated well, low compensation ceilings but culture
doesn’t impact that (people want to be there so they accept lower salary caps), employees think of
NASA as a top employer because it allows people to be innovative and contribute to a new idea or
something that hasn't been done before. In this case, the organization wasn’t buying in to open
innovation which was a project designed to continue to achieve NASA quality results through
collaboration outside of NASA due to changes in the external environment (cutbacks). Interventions
such as training sessions, feedback opportunities, rewards for participating in open innovation were
introduced, and a checklist was created to make open innovation usable to NASA. “Appropriate
interventions, such as working to align vision statements to the reality of day to day operations can
be used to reconcile and realize positive outcomes involving dilemmas” (Glover & Friedman, 2015).
All of these interventions taken by the change agents in the NASA case eventually worked to
reconcile the dilemmas of decreased resources, survival anxiety, decreased motivation, and
resistance to change.