Since 1991 we have had this merry, quarterly conversation, you and I. It is time to get another viewpoint on practitioner issues. Michael M. Harris (University of Missouri-St. Louis) is ably taking over the reins of Practice Network. I have no doubt that he will prove to be as inquisitive and curious and provide as wide-ranging a viewpoint as anything you saw me do over the last 7 years.

For this last issue, I bring you my "best of…" column reprints (with revisions) of previously run columns by folks I believe are sending us important messages. I have talked with so many over the years that it was difficult to narrow the focus to just a handful of key messages. From my standpoint, we should heed the following messages and ideas as we continue to improve our impact in business and industry today.

Wayne Cascio (University of Colorado, Denver) was right in 1982 when he wrote Costing Human Resources: The Financial Impact of Behavior in Organizations, helping practitioners illustrate the value-added nature of their services to companies. Wayne continues to emphasize this theme.

Wayne feels we are moving beyond telling employers how to avoid the downside risks of non-compliance with EEO issues and now have many opportunities to lead and initiate change in organizations. "We will gain more from touting the positive benefits of I-O" to our business leaders, he says, emphasizing that we are increasingly able to "get the people issues out of the legal department context and onto the business agenda."

He cited three key areas of importance in our field:

Diversity. According to Wayne, the management challenge of the 1990s will be learning how to manage a multi-ethnic, pluralistic work force. Minority consumers represent a market that exceeds $650 billion annually. No organization can afford to ignore a market that large. To tap into it, organizations are taking steps to ensure that their workforces mirror their targeted markets. In addition, social psychologists have known for years that you stimulate creativity through a diversity of viewpoints. One way to assure this is to have a pluralistic work force.

Selection. The traditional role for selection—fitting one person to one job—is changing. Based on demographics of the future, an increasingly painful education crisis and the need for a multi-functional work force, Wayne feels we are being called on to assess more basic, broad-ranging skills such as basic literacy, logical reasoning skills, and the willingness and ability to adapt to change. Find employees with these basic skills and the organization will be better positioned to adapt to competitive pressures and grow into the future.

Promoting the human aspects of business. Granted, issues such as mergers, acquisitions and downsizing are steps initiated by financial considerations. However, there are all too many success stories which show it is the human side of these business actions which make them succeed. Wayne emphasizes that business leaders are recognizing important psychological and economic linkages between people-related issues and the ability to implement major organizational changes. Business leaders are looking to us to help lead them in the right direction.

Many people the Practice Network have spoken to lately have emphasized the need for I-O psychologists to read a variety of journals. Wayne suggests you try on the Society for Human Resource Management’s HRMagazine (703-548-3440) or the American Society for Training and Development’s Training & Development Journal (703-683-8100). "Listen to the practitioners," he stresses, "listen to the people who face competitive realities every day."

Success stories are coming out in the literature every day. It is our responsibility, indeed our opportunity, to promote the human side of doing business and to initiate change in our organizations. Business leaders are becoming increasingly open to our innovations and contributions.

In a recent METRO article, Ann Howard discussed an idea, found in SIOP’s Professional Practice Series book Diagnosis for Organizational Change: Methods and Models, Ann Howard and Associates, (contact SIOP’s Administrative office to order) to push the present boundaries of assessment center technology well into the "turf" of organizational development. Her proposition is fascinating. Her argument is for an integration of "I" and "O" diagnostic methods and disciplines.

Because it is difficult for one practitioner to "do it all," integrated organizational diagnosis begs for collaboration. One approach is to use an assessment center model targeting the organization, instead of the individual, as the unit of assessment. In this scenario various practitioners would serve as assessors and administer exercises (using their own diagnostic techniques) to address each significant component or subsystem of organizational functioning. The assessors would meet at an integration session to pool the diagnostic information generated by their exercises and rate the organization on pre-established dimensions of organizational performance. The organization’s overall evaluation would be based on how well it was achieving its critical success factors. Following integration, a feedback report and intervention plan would be created based on the organization’s diagnosed strengths and developmental needs.

Under this proposal, the assessors would perform this center’s "job analysis" by working with the organization’s top executives to identify the organization’s strategy and critical success factors.

Having established dimensions to be assessed, the assessors would get to work. Leadership experts would assess the top cadre of executive decision-makers, while culture change experts facilitated the identification and articulation of the company’s vision and values. OD consultants would investigate incongruities and misalignments amongst structures and systems. Meanwhile, other experts would diagnose strengths and needs in such areas as staffing, performance management, training, team functioning and rewards.

The assessors would meet periodically at integration sessions to pool their findings and develop a fuller and more balanced understanding of the organization’s dimensional characteristics. They would discuss approaches at various stages of intervention and flesh out incongruities among them, thus enabling them to channel their efforts toward united organizational change.

Is this scenario an unrealistic fantasy or does it herald the future? Ann Howard is one of a large number of practitioners calling for a reduction in the distance between "I" and "O" psychologists. She is one of the few proposing a concrete scheme to reach this end.

Practice Network was honored to speak with Edward E. Lawler III (Marshall School of Business, University of Southern California) about his ideas on team-based compensation systems.

Ed feels individual pay plans can be abandoned in certain interdependent team situations. The main barrier to a more widespread use of group pay plans is a cultural one. Ed knows that "group pay for performance is a tough cultural sell" in the United States. Skill-based pay plans are a much closer cultural fit in the U.S. and have a long history of successful use.

Clearly, the function of compensation systems is to motivate correct work behavior. As work behaviors change, Ed suggests I-O psychologists re-evaluate what behaviors current pay systems are reinforcing. This is especially critical if you are involved in an organization developing or using high performance teams. Group pay plans are most relevant for work groups which have a high degree of interdependency and where organizations want to reinforce a high degree of cohesiveness. It is becoming somewhat common for individuals in team situations to be evaluated on a "contribution to the team" dimension. Extending the traditional individual performance evaluation process in this manner has been shown to be less effective than team performance pay plans in highly cohesive team structures as noted by research Ed has conducted with colleagues Monty Mohrman and Susan Mohrman (University of Southern California).

Ed notes that Jerry Ledford (University of Southern California) is doing good current research in the pay-for-competencies arena, but notes that there is a lack of research on team-based compensation plans, except the large body of older, small-group research on gainsharing plans.

Most companies continue to use individual reward plans, in part because of the cultural difficulties with team-based plans noted above and in part because this field is still developing. Motivating the correct work behaviors will continue to be the primary focus of compensation plans. Check out the fit between where your organization is going as it relates to your company’s compensation system.

David Nadler (Delta Consulting Group, New York, NY) specializes in large-scale organization change. David and his associates have developed the theory of organizational architecture which encompasses the process of how one designs and develops organizational change on a broad scale. The 40 professionals at Delta are currently applying these concepts at the CEO level in more than 35 client organizations.

"If our desire as I-O practitioners is to have influence and impact, we must realize that the issues decision makers consider are at the system level," he says. Consulting with CEOs, David has discovered that many corporate heads are unclear as to the contributions made by I-O psychologists on their staff. It is common for us to focus on organizational issues at the individual and job level while missing larger social processes. "Patterns of behavior of individuals must be considered within a broad context," he says, "this includes an interplay between strategic and technological issues with behavioral issues."

Organizational architecture is the process of designing a total system including the formal organization, strategic and technological issues, the informal organization and individual responses to the organization. David uses the architectural analogy quite seriously and maintains that the architecture of physical space and organizations are similarly impacted by the availability of new technologies and new visions. He asserts that "information technology is the structural material for organizations."

Implementation of his ideas on organization development depend on the involvement of senior staff members in project teams. An intervention with a $14 billion, 100,000-employee organization is formed around the existence of two teams; the "architecture team" responsible for examining the nature of the business, developing four different possible architectural structures and presenting their finding to the "organization transition board;" the "board" is responsible for implementing the architecture chosen by the organization.

David suggests that practitioners research the strategic issues of their business. Find out about the performance of your company and the strategic issues with which it is grappling. This awareness will broaden your horizon and help you see issues from your CEO’s perspective. "The issue for practitioners is one of relevancy," David says. David and his colleagues have been active in writing about their work, publishing four new books in 1997. In particular, Competing by Design, co-authored with Michael Tushman, lays out their approach to organizational architecture. In Champions of Change, David focuses on the role of the CEO in bringing about radical change.

Practice Network had an engaging conversation with Ed Schein (MIT, Sloan School of Management) about his impressions and opinions of I-O psychology. And when Ed talks...people listen.

He sees the field of psychology evolving into two wings, the traditional "expert" wing oriented towards hard science and empiricism, and, secondly, the "Tavistock" wing with a more clinical and ethnographic inclination and penchant for inquiry, coaching, and teaching. It is the second wing that is more attuned to process consulting, Ed says, "I think we are past the stage where the expert-based field is very helpful. The big human problems don’t lend themselves to resolution through the scientific research model."

"I consider nonsensical all the literature that recommends the strictly scientific approach of (1) diagnosis and then (2) recommending an intervention...the two are tremendously intertwined and can’t be separated into two parts or phases," Ed emphasizes. He recalls a situation where a consultant was called in to help a CEO with a problem. The consultant’s first step was to interview and test all of the CEO’s direct reports. The consultant took the empirical, data-oriented approach to identifying the problem. Schein was concerned about this consultant’s approach because a root problem in that organization is the autocratic nature of the CEO. Unwittingly, the consultant played right into the CEO’s hands. "You have to decide what kind of consultant you are," Ed suggests, commenting, "I am concerned about the validity of the interaction I have with clients in addition to the validity of the data I collect."

Ed also has concerns with practitioners who take an approach in which the researcher provides the client a solution, over a process consultation approach in which the client is the one who works the issue, facilitated by the helper-consultant.

Ed finds an able ally for the process consultant in your friendly, neighborhood family therapist. When they get thrown into the middle of a problem it’s very clear to them that they are working with some sort of system, one they have to understand as they go along. The therapist treats the family as a system, but cannot afford (or may be frankly incapable of) understanding all of the nuances of the family. The therapist does not pretend to know everything, but strives to get each member talking to the other. Ed questions "Why do we think that to be helpful we have to be scientists, when what we need to do is have an eye on the workable solutions to our client’s problems....the client doesn’t ask for thoroughness, completeness and truth, the client asks for help with problems." It is not uncommon, Ed says, for him to come away with only a fragmented view of a company’s overall culture when he "completes" (TB: forgive me, Ed) an intervention.

Ed divides the organizational world into three major "occupational communities." The first is the operator community made up of line/operations people who act in a complex, ecological, systemic world. The second community is made up of engineering citizens who believe in the perfection of a humanless world. The final community is the top-management culture which focuses on productivity, cost reduction, and operating results. A disproportionate amount of consulting is done within the operator community, Ed feels, but as long as we have not infiltrated top management’s culture, changes will always revert to the state they were in preceding the intervention. Ed believes, "I think (as consultants) we have mostly been servants and have not enlarged top management’s viewpoints and certainly have not helped them see the value of their people."

Interested in self-improvement? Ed suggests reading his 1994 publication, Career Survival: Strategic Job/Role Planning. Based on his original career dynamics research, this book is an application of open systems theory for career planning.

William A. Schiemann (Metrus Group, Inc., Somerville, NJ) completed a survey of senior officers in 104 of the Fortune 500 a few years ago and is kind enough to share his results with the readers of Practice Network.

This news is not good. Overall, one-half of his respondents considered their company’s key change effort to be a failure, while only one-third felt they had been successful in meeting the objectives of their change initiative.

The detail results of this survey are as follows:

74% felt there was significant resistance from employees, including top- and middle-level managers, to doing things in new ways.

66% felt there was an inappropriate culture to support the change. Bill feels this is a result of both not being prepared for the change ("having a value and belief mentality that the status quo is fine") and not having the infrastructure—such as the rewards and incentives, the communications and the training competencies—to carry out the objectives of the change effort.

45% felt there was poor communication of the purpose and plan for change.

42% felt there was incomplete follow-through of the change initiative, or as John Kotter would say, "Declaring victory too soon!".

39% felt there was lack of management agreement on the business strategy. This was startling because it makes little sense to address tactics, structures, competencies, or systems without agreement on direction.

39% felt there were insufficient skills to support the change. Bill summarizes this as a lack of skills at all levels to deal with the ambiguity of change and an inability of many leaders to guide employees through a change effort.

In panels with organizational consultants and roundtables with executives, four action areas were identified to help overcome some of the stumbling blocks to the change efforts outlined above.

Create a common vision. Bill says "If you don’t have a common vision you cannot implement a common strategy," and emphasizes the importance of "goal alignment" in the beginning of a change effort. He highlighted that over 80% of employees he spoke with could not articulate "whats-in-it-for-me" reasons to support a change effort.

Develop common ground. Having solid data in critical strategic performance areas (e.g., financial market, people, operations, environment, adaptability) is the foundation for developing a common ground. Sears, for example, in their breakthrough change discovered that people at all levels—managers and employees alike—arrive at the same conclusions, and actions, when presented with an agreed-upon set of important facts.

Counteract the disruption of historical patterns. Address the issue of "feared obsolescence" and begin the training of new skills in the workforce at all levels. Don’t ask employees "to move to do something different, without helping them develop the skills to do it," Bill cautions.

Develop leadership. Put a key executive in charge of the change effort. Make him or her formally accountable for its success, instead of adding it as another part of their "regular" job. Bill stresses the importance of "being able to point to someone who is carrying the flag," and notes the difficulty of finding successful role models within the staff levels of many companies.

Metrus Group utilizes strategic performance gauges to identify gaps between where a company is and where they want to be on 6 key strategic dimensions, enabling them to target key change initiatives that enhance value and leverage resources. Bill feels this model helps sharpen the focus and reduces the number of priorities a company addresses during a change effort.

Practice Network had a great chat with Paul Thayer. Although he left LIMRA in 1977 and has been retired from NCSU for a few years, Paul has lost neither his interest nor his fervor for I-O psychology.

Given Paul’s years of experience (SIOP President from 1976-77, Senior VP at LIMRA and Psychology department head at NCSU), he has gained a unique perspective about the value and role I-O psychologists play in the business world.

Paul would like all psychologists to become better at planning for the long-range needs of a company, becoming more able to anticipate what the company requires before it is in crisis mode. As he logically deduces, "If we come into organizations and let them set our agenda, when the organization runs out of ideas then …" You get the picture.

Another very interrelated lesson Paul has gleaned from his years of practice is the need for us to strike a balance between the short- and long-term goals we set for an organization. If we are science-practitioners, then let us be both doer (practitioner) and thinker (scientist) for our organizations. "If everything we do for a company is short range, the company asks ‘Why don’t you do anything new?’ but if everything is long range, the company asks ‘What have you done for me lately?’" he remarks. The trick is to balance the immediate needs of the organization with research into the longer term issues that others don’t yet perceive.

In 1992, Paul presented an analysis of strategies which had contributed to the success of former SIOP presidents as I-O professionals. His investigation was based on the biographies of ex-SIOP presidents. Paul identified 13 strategies:

Write and speak clearly and concisely.

Make it clear that you identify with your business and its problems and that you are more than a psychologist.

Learn the business you’re in so you can communicate and understand the problems.

Develop connections to top management.

Find an angel to help sell a research approach.

Make the boss look good with material from your research for speeches at industry meetings.

Work on problems perceived by management to establish credibility, then push research.

Determine the entire scope of work of the organization and be sure to cover everything. Combine this with both long- and short-term research projects.

Involve users from the onset.

Do "consumer research" to ensure services are acceptable, and use as the basis for improvement of service, and as the basis for selling research approach.

Plan for research in developing new programs.

Develop systematic databases in each project that can be exploited in subsequent studies of other issues.

Take advantage of the times; job analysis was needed during the depression and in WWII with the tight labor market.

Practice Network was particularly pleased to have caught up recently with Dave Ulrich (University of Michigan, Professor of Business). If you have never heard of Dave, then this piece is for you. He is the hottest thing since sliced bread, taking a prominent position as keynote speaker to the Society for HR Management’s 47^th Annual Conference, the author of over 80 manuscripts, co-director of Michigan’s HR Executive Program and much more.

For years HR professionals (TB: I know it hurts, but business leaders don’t see us as I-O psychologists, they see us as HR jockeys) have played the dog that spends its days chasing cars down a stretch of open road, never catching one. Finally one day, one of the cars stops on our lane. What the hell are we to do now? Dave’s mission is to salvage the "tragedy of isolated HR professionals." He believes it is time for us to stop just talking about becoming business partners and actually do it!

Dave feels the rules of competitiveness are headed into their fourth season. In Dave’s parlance, the first three seasons are comprised of (1) the financial season "where competitiveness came from reducing cost, increasing efficiency and leveraging capital," (2) the second was the manufacturing season with its "focus on inventory management, automated technology, and new production processes improvements," and (3) the third was a season "focused on customers with product features, market strategy, and differentiation being the competitive jargon."

He emphasizes, "A fourth season has emerged. This season focuses on the organization as a competitive advantage. I define "organization" referring to both the people and the processes within a firm which add value to customers. Organization has moved to the competitive forefront."

There are several climactic forces driving us into the season of organization as a competitive weapon:

Parity. Competitors are able to copy financial, manufacturing, and marketing strategies. Copying a company’s organization is a tad bit more difficult.

Demographics. Take your pick from the following grab bag of challenges: the increasing diversity of "Workforce 2000," significant corporate restructuring with the concomitant layoffs, job restructuring, motivational issues and so on, and sourcing/skill problems. Dave finds the measures of time required to fill strategic jobs increasing all over our country.

Leveraging core competence. In a fascinating turn of the tables, Dave comments, "Traditional strategic models suggest that structure follows strategy; once a firm has a strategy in place, managers craft an organization to deliver it. A new model articulated by C.K. Prahalad and Gary Hamel suggests that the firm represent a set of core competencies which can be leveraged to define the company’s strategy. From this perspective, organization competence becomes the dominant competitive advantage."

The intermingling of employee and customer attitudes. Ben Schneider, Dave Bowen and Len Schlesinger have found a strong correlation between employee and customer attitudes and believe employee attitudes may be used predictively for the early detection of customer attitudes.

Intellectual capital. Dave asks, "If you had to make one set of decisions for your primary competitor for the next 6 months, what would you like to control?" and states, "I posit that controlling the people pipeline for 6 months will determine their competitive position for 6 years." He feels this is especially true in the service industry.

Pace of change. In Dave’s view, a manager’s key job is to "learn to create a capacity for change. Essentially, capacity for change comes from the flexibility of people and processes within the organization." This is a significant HR challenge and one tied directly to the long-term competitiveness for most any organization.

Dave Ulrich is very optimistic about the future of HR and cites top companies such as Eastman Kodak, Sears, GE and Amoco that, to fulfill key strategic goals, have focused on the role their human resources play in goal achievement and the importance of bringing aboard the right HR executive.

"In this season of organizational competitiveness, we should remember that each season has unique attributes. No one approach will dominate competitiveness. However, if HR professionals cannot leverage their organization, they will be left behind," Dave asserts.

Thank you for being a faithful reader over the years. If you get a yen to contribute to our profession, I would encourage you to reach out and try something. You never know where it will lead! If you are in the neighborhood, give me a call and we’ll do lunch. If you find yourself in Macao or Hong Kong, look up Kin Chong U, the venerable "Maverick," an excellent chef and solid young practitioner.

To become involved in Practice Network contact Michael Harris at the University of Missouri-St. Louis at 314-516-6280, FAX 314-516-6420, email c1994@umslvma.umsl.edu.