Plurality Dr. Noel Tichy
Note to Reader. I am publishing the "Plurality" document I frequently refer to in this blog. This will enable searching based on the text within the entire document. The word count is approximately 35,000 words and is provided as background for the discussions.
A number of technology changes have occured since it was originally published in 2004. IBM has chosen not to support this effort, and as a result I am replacing the components of the technology architecture as the opportunities and needs require. We are moving to the Sun strictly for their support of Java, and the synergies of the visions. As I recently noted, Ingress would be the database that we will use. Other then that, I have chosen to host the entire development and operating environment on Sun's Grid and as funds become available we will secure those resources.
References are to the literature noted in the bibliography. So here it is, warts and all. I hope you enjoy it, any and all comments are welcomed and appreciated.
Thank you
Paul Cox
Dr. Tichy states that the level of change (circa 1983) is accelerating and companies need to look towards strategic change. He describes this change as more fundamental in its nature then the incremental changes that management introduces through their traditional experience-based management philosophies. Stating the need for change should be strategic in nature and more involved than limiting changes to re-organizations. Dr. Tichy feels that changes need to be more fundamental and include the technical, political and cultural components of an organization to ensure that these changes are adopted as they are designed to do.
Summary of and application to oil and gas firms of Dr. Noel Tichy’s book;
“Managing Strategic Change Technical, Political and Cultural Dynamics.” 1983, John Wiley & Sons.
Chapter 1, Strategic Change Management: Organizational Development Redefined.
The three major change initiatives of this proposal are:
- Innovation focused around the science and engineering of exploration and production of oil and gas.
- Adding direct accountability and operational control to the SJOC.
- ERP Software development based on the web services paradigm.
Dr. Tichy (1983) states that there are nine change levers that management can use to make strategic changes effective. These levers form the basis and structure of his book and are summarized as follows:
- “The external interface”.
- “Mission”.
- “Strategy”.
- “Managing Organizational Mission / Strategy Processes”.
- “Task”.
- “Prescribed Networks”.
This is one of the major issues that this proposal foresees as a result of the Workplace and WebSphere technologies. These technologies will replace and circumvent the traditional forms of communication due to their efficiency and effectiveness. The training and management of these and other new networks has / will become an area of concern as a result of the issues regarding the saturation of users and their capacity.
- “Organizational Process: Communication, problem solving, and decision-making”. (p. 6)
The joint operating committee has the operational decision making power. To more directly associate the operational decisions of the committee with the implications and accountability of those decisions, there needs to be a realization by the committee participants of the impact of these decisions, and therefore, be accountable for the implications of the decisions. Dr. Tichy suggests that the blurring of the decision-making only increases as the complexity and lines of authority increase.
- “People”.
The method of motivating staff that this proposal suggests is through enhanced and extensive employee training and education. As documented elsewhere the need to have training and education as rewards for work is effective both for the organization and the employee. Making explicit these forms of motivation will increase employee performance.
- “Emergent Networks”. (p. 7)
These nine points are considered in the context of the political, technical and cultural frameworks of an independent producer. The ability, capability and success of any major strategic change initiative require that these three strategic change management tools be considered and implemented. Additional consideration should be applied to the implications that change in one-area impacts on the other two.
Dr. Tichy (1983) observes that there are times when strategic change becomes necessary. These times are identified by the following categories and are applied to the environment of the independent petroleum producer.
- “Environment”.
This level of fundamental change reflects, and this proposal asserts, that the entire basis of oil and gas production and exploration has changed in fundamental ways. The levels of change being introduced by the commodity price changes are unparalleled in this industry’s history.
- “Diversification”. (p. 18)
- “Technology”.
- “People”. (p. 19)
As described above, the application of the theory and writings of Dr. Noel Tichy has direct application in the context of the oil and gas producer. Tichy’s theories provide significant support to the recommendations within this proposal. Each of the four bases that Tichy suggests as individual justification for implementing major strategic change are supported in this analysis.
Will the “branch plant” mentality that many of the American based subsidiaries proliferate? And hence will Calgary lose the ability to compete as a “cluster” within the global oil and gas industry.
Chapter 2, Organizational Models.
Dr. Tichy asserts a variety of myths that perpetuate the reasons for the management behavior seen in organizations. Dr. Tichy (1983) uses many of the myths that were identified in Dr. Henry Mintzberg’s in 1973. The three particular myths, and their actual effect are as follows.
- “Managers are systemic planners”.
- “Managers rely on formal computerized management systems”.
- “Management is fast becoming a science.” (p. 38)
Dr. Tichy (1983) states that basing the major change initiative on “the intuitive and implicit models are 1) consonant with the problems that need resolving and 2) consonant with the models of the other people with whom he or she must collaborate.” Until the management is aligned around the specific organizational model difficulties in implementing the change initiative, unnecessary conflict will occur. (p. 39).
This research is basing its suggested organizational model and development on a variety of existing structures and models as defined by Dr. Tichy (1983). These models include:
- “Classical mechanistic model.”
Over the past few decades the only revisions made to this style of organizational structure has been its optimization through the flattening of the hierarchy. To suggest further optimization of this model as a means to enable enhanced innovation and change management is considered for the purposes of this research as foolhardy.
The advantages of this structure are to be salvaged and used in the Genesys® model of organizational optimization that this research details. It would be just as foolhardy to suggest the standard hierarchy be eliminated before an acceptable model has been developed, tested, optimized and accepted as the standard, and the role of many of the existing functions of a firm may best be managed in the long term by a traditional hierarchical organizational structure.
- “Human resource organic model.”
Dr. Tichy asserts that the downfall of this thinking is the movement to the “optimal” system is through pursuit of the most well defined theory Y or organic model, which has proven not to be the case. Nonetheless the need to maintain theory Y based strategies is stated explicitly to ensure that no incorrect assumptions are made.
- “The political model”.
- “Commander power configuration.”
- “Continuous chain power configuration.”
The preferred method of management by a larger group is that which Shell Canada Ltd has traditionally employed. In which the Royal Dutch Shell group relies heavily on the securities and regulatory environment of Canada to ensure their investments are optimized and managed effectively.
- “Closed system power configuration.”
- “Missionary power configuration.”
- “Professional power configuration.”
- “Conflictive power configuration.”
Dr. Tichy asserts the political, technical and cultural influences need to be addressed in the context of the whole organization. Focusing on one factor should be in the context of the other two.
Development of The Genesys® Model of Strategic Innovation.
The appendix to chapter 2 of Dr. Tichy’s book provides a template or model to use for the development of the appropriate model for an organization. This research proposes the “The Genesys® Model of Strategic Innovation.” (Appendix “A”) as a discussion point and beginning of the development of a usable model to be used during the actual research that this proposal recommends. This model is academic in its nature and should not be implemented without the appropriate groundwork and necessary supporting research.
In the four-step process that is summarized as follows, each step is premised by Dr. Tichy (1983) as a “Helps” to…, and “develop” … These variables and categorization's for the purpose of this research proposal are limited to the scope of the areas of direct impact of the technology and organizational changes proposed. The other important consideration is the reiteration that this should be considered as a preliminary draft and that the Genesys® model will be developed further through the research and study period proposals.
- Step one.
- Step two.
- Step three.
- Step four.
Please see Appendix “A” to this thesis, “The Genesys® Model of Strategic Innovation.”
Chapter 7. Change strategy.
Dr. Tichy (1983) introduces the change strategy implementation as consisting of three components.
- “The overall development of the strategic change plan.”
- “The selection of appropriate change technologies for implementing the strategy.”
- “The development of a transition or implementation process.” (p. 185)
Key to the understanding of the alignment of the three systems is the fact that they are not tightly integrated, but loosely woven. The systems interact but not in wholly predictable or definitive manners. In order to achieve the strategic change initiative, the need to un-bundle the loose coupling is required. It is also necessary to develop a vision or image of the prospective organization in order to have the re-coupling of the loosely woven dynamic systems, the political, technical and cultural, operate in the desired fashion.
- The strategic change objective.
“The Genesys® Model of Strategic Innovation.” is designed to augment the independent oil and gas producers’ existing strategies to accommodate the need for greater innovation. This assumption is based on the revised market conditions that now require that speed and capability of innovativeness demand organizational and technical changes that are complex and interrelated.Guidelines for developing a change strategy.
The objective here is to map the needs and capabilities of the current organization and its definition to the future organization proposed in this research report. Once the two definitions are analyzed and determined there will be the need to define the technical, political and cultural changes, and their implications and structure . Key to these is to ensure the following components and guidelines are in place Tichy (1983).
- “Empower the change managers and set the stage for vigilant decision-making”. (p. 193)
- “Summarize the diagnosis.” Including the diagnostic findings, turbulence and expectations. (p.194)
- “Move from diagnosis to strategy”.(p.197)
Critical to the success of “The Genesys® Model of Strategic Innovation” is the development of technologies that will support the underlying strategic and organizational changes required. Structuration theory notes that constraints are defined through the development of past technologies and market forces. The need to support a new strategy based on the needs of the future requires a minimum of the technical constraints of what is, can and should be possible. These points accurately reflect why Genesys®, February 2003 development proposal provides such value.
Dr. Tichy (1983) begins with an excellent summary of the technical aspects of strategic change with the following quote. “Technical change strategies alter the information-processing capacity of the organization. The strategies involve adjusting components of the organizational model. These adjustments are made either to increase or decrease the organizations capacity to deal with uncertainty brought on by changing environmental condition, new technological developments, or complexities in the tasks.” (p. 203)
The information processing capability of an oil and gas concern needs to be increased to enable:
- The organization to deal with uncertainty.
- New technological developments.
- Increased complexity of tasks.
Dr. Tichy writes that as the operating environment becomes more complex and difficult the need to organize towards a more “organic” form, and away from the more mechanistic forms of organization structure is required. Complexity requires a closer and tighter alignment of the organization towards the overall strategy of the firm. These should be considered as two of the key justifications to move towards a business unit structure, such as this research’s recommendation to use the joint operating committee as such. Use of the joint operating committee supports the legal, investment, operation, decision-making and cultural environment of oil and gas firms, providing strong alignment of the organization.
Without the ability to develop systems around the joint operating committee the alternative would be to continue with the development of SAP like hierarchical organizational structures of accounting, land and production, which are inappropriate for oil and gas from an alignment point of view.
Dr. Tichy offers many tools and techniques in aiding the organizations transition from the current to future organizational structure. These tools and techniques are beyond the current scope of this research proposal and will be used to implement the appropriate changes when companies subscribe to Genesys®, research and development proposal. These tools involve the altering of the processes of control, reward, communications and conflict.
It is important to identify the conflict process as a key to the future success of this research, and the ability of successful oil and gas firms. Conflict has been anathema as the cultural operative in Canadian oil and gas. The “do as your told” mindset has been the key to the long-term survival of the individual employee, and the “muddling along” in terms of strategy development has traditionally been the means of the industry over the past 20 years, and as detailed elsewhere in this thesis, inappropriate for the future of this industry. Conflict is a powerful tool and an effective method for management to deal with issues. The compromise of an organization’s strategy is usually the outcome of conflict avoidance. The ability to align the organization will require that conflict be identified and resolved as it occurs, as opposed to the traditional conflict avoidance methods. This will be of particular value as the conflict between suppliers, and particularly between partners, becomes more dependent and critical to the ability of the firm.
Chapter 9, Political Change Strategies.
The various political influences that affect the change strategies of an organization are many and dynamic. According to Dr. Tichy (1983), the following are generic in nature and are therefore discussed in this research proposal. The need to identify and integrate other political influences will be required on a go forward basis, once Genesys®, research and development proposals are undertaken by industry.
- “Succession concerns.” (p. 227)
- “Goal concerns.” (p. 228)
- “Means of doing the work concerns.” (p. 229)
- “Environmental concerns.” (p. 230)
- “Reward reallocation concerns.” (p. 230)
- Developing political strategies.
It is clear to this author that the scope of change that is being considered in this research is significant and accurately reflected in management’s actions to date in tacitly, but not explicitly, supporting this proposal. The political influences of these strategic changes should not be underestimated. The additional aggravating factor is that the traditional political influences that have operated in a classical hierarchy are rendered less effective in a more business unit or politically democratic structure that includes direct influence by outside interests through a more dynamic joint operating committee.
It is asserted throughout this research that the capacity for an oil and gas concern to continue with the status quo is of limited value due to the environmental issues of commodity pricing and reserve replacement. Acceptance of the move from a “banking” to a “scientific” structure and the associated political issues requires a more direct management approach to reducing the risks identified.
- Politically organic strategies.
Tichy states
“The politically organic organization is able to manage goal conflicts, conflicts over the means for goal accomplishment and succession issues through democratic procedures.” (p. 241)Dr. Tichy reflects on the irony of democratization of the workplace being a radical thought in western-based economies. The democratization and freedom that has occurred over the time period since Dr. Tichy’s book was written is by far the greatest the world has ever seen. Taken in the limited context of “economic” freedom China alone would support that claim.
As Giddens structuration theory notes the need for the organization, society and people to retain a balance is required to avoid failure. Therefore there is a need to parallel the societal changes with organizational changes. And in using Giddens theory it would be predictable that these un-reconciled changes might manifest in the collapse of the organization or the regression to a less democratic society, with only one of these alternatives being viable or probable.
- Development of political change strategies.
- “Determine the level of political uncertainty.”
- Clearly the political uncertainty is stratospherically high.
- “Link political uncertainty to the internal and external culture of the organization.”
- There is a diversity of management structures that extend from pure independents to the branch plant methods. However, each employs similar systems and structures and is therefore limited in their competitive and structural capabilities as the future leaders move to a more scientific basis.
- “Link the political to the technical strategy.” (p. 251)
- It should be asked how the political environment could be linked to a hierarchical based, bureaucratic, SAP style of ERP system.
- “Develop an image of good political alignment.” (p. 252)
- The image that this proposal asserts is that of a globally competitive independent producer whose capability is effective and efficient:
- Over the scope of international operations and competition.
- Aligned with the development in society and people.
- Aligned to the technology and its future developments.
- Based on innovation in the development and understanding of the underlying earth sciences and engineering disciplines.
We have seen a regression in the management of several of the oil and gas firms in Calgary, to that of what might be described as a “branch plant management” style. These changes have significant implications for all of the companies in this industry by way of the ability to extend the “cluster” that has been developed to a more “global cluster”. The “branch plant management” style that has been established at some of the oil and gas companies is as a result of the parent firm’s perception regarding this industry’s ability to manage itself. This has lead to a variety of firms now being operated from distant head offices that reduce the effectiveness of the local organization, and would now have a greater effect on the capability within all companies within the Calgary “cluster”.
The political situation as detailed above lends credence to the technical changes proposed through this research and provides further justification of the proposed Genesys® development. The outcome and direction of the “cluster” needs to be determined and developed based on innovation based competitive advantages. The need to assert a capability that is global in its scope and application is within the domain of the current management, and this research asserts is the primary political issue to be addressed over the next few years. Waiting for these decisions to be made is an inappropriate stance for this industry leadership.
Chapter ten, Cultural Change Strategies.
The cultural influences within an organization need to be reviewed from a variety of perspectives. This review is required in order for the organization to attain an alignment with the political and technical influences of the strategic change initiative. The current overall culture of oil and gas is predominately focused on the competitiveness of the individual. The ability of the firm to now focus on the team oriented nature of new technologies needs to be addressed and dealt with through the change management initiatives introduced in this research.
The “culture” also needs to reconsider the nature of co-opetition amongst producers as represented in active participation and sharing through the various joint-operating committees. This culture of sharing will be a difficult and necessary component of the ability of the producer to enhance its competitiveness through innovation and cooperation within the “cluster.” These points accurately reflect the need to incorporate the knowledge, education and training motivations of the people involved.
Dr. Tichy (1983) writes “The cultural system glues the organization together because it provides members with cognitive maps with which to understand and influence behavior in the organization and provides a social justification for what people are doing.” (p. 253)
Of particular concern since the time that Dr. Tichy wrote this book is the “message of the month” style of management that many employees have been subjected to. These have culminated in a variety of initiatives that have flattened the hierarchy with little of the promised changes from these initiatives materializing. The commitment to cultural strategic change is necessary for management to overcome employee’s preconceived notion of the “message of the month”. Although this is beyond the scope of this research, it reflects the level of planning required ensuring these changes materialize.
To a great extent the culture of the company is a significant issue from a change management point of view. The innovations and sharing of ideas, although part of the past and current culture, are moving into the area of being a primary competitive advantage and capability. Culture therefore becomes a key component of making the political and technical changes, and therefore their alignment to the cultural components
- Cultural alignment.
A controversial component of this research is that conflict would need to be fostered to enable the more rapid innovativeness desired. Conflict, and its good partner controversy, appears in contrast to the harmony that most individuals seek to attain in organizations. Conflict as a tool, and conflict resolution are two additional components that need to be developed in concert within the culture of an innovative oil and gas producer. Conflict provides a means of identifying issues and determining the appropriate solutions. The compromise methodology maintains the status quo, whereas conflict provides the means to move organizations in different directions. In other words alignment will not be a smooth road.
Dr. Tichy (1983) writes “The culture of the existing organization is generally driven by operating concerns which are short term, certain, predictable, and control oriented, whereas, the culture to support innovation must be supportive of uncertainty, risk, long-term plans, and assume failure is good in the early stages.” And “Organizations that are very good at doing something for the millionth time are not very good at doing something for the first time”. (p. 263)
How the organization enhances their capability to innovate is of concern. The existing culture may conflict with the desired culture to support the political and technical changes needed for innovation. The need to identify and create the appropriate culture is a key component of the strategic change management initiative.
Comments regarding Dr. Tichy’s writings.
Considering the time frame that Dr. Tichy wrote his book (1983), and the dearth of writings that support these theories, suggest that his writings are either comprehensive enough in their initial release, or did not receive the necessary support to achieve a more “commercial” level of acceptance.
In reviewing his book it is clear that the majority of the work is substantially beyond the time frame when it was written. I would assert that the level of change that has occurred since 1983 has been significant enough for management’s time and effort being consumed by the changes itself. This will continue as we move into what I suspect will be an increased level of change. Management needs to adopt these strategic change management initiatives in order to ensure that the difficulties that were present in the past do not carry on in the future.
In other words, Dr. Tichy’s ideas are becoming more prevalent currently and need to achieve a greater acceptance and distribution. It would be appropriate for this text to be updated to the current time frame and re-release his writings so that management can include these theories in their tool kit.