CHAPTER FOUR

Entering and
Contracting
OD and change management by Abdurezak M.(PhD.) 1
 Learning objectives

 Describe the issues associated with entering into

an OD process.
 Describe the issues associated with contracting
for an OD process.

OD and change management by Abdurezak M.(PhD.) 2

 Introduction
• The planned change process generally starts when one or more key
managers or administrators somehow sense that their organization,
department, or group could be improved or has problems that could be
alleviated through organization development.
• Entering and contracting are the initial steps in the OD process. They
involve defining in a preliminary manner the organization’s problems
or opportunities for development and establishing a collaborative
relationship between the OD practitioner and members of the client
system about how to work on those issues.
• Entering and contracting set the initial parameters for carrying out the
subsequent phases of OD: diagnosing the organization, planning and
implementing changes, and evaluating and institutionalizing them.
OD and change management by Abdurezak M.(PhD.) 3
 Organizational Development’s
Five Stages

OD and change management by Abdurezak M.(PhD.) 4

The contracting and Entry Phase
• The beginning of the OD cycle is the contracting phase, which includes the agreement of terms relating
to the OD programme and covers practicalities similar to an employment contract such as budget or
fees, time frame, resource, objectives, reporting hierarchy and agreed responsibilities. In addition to the
formal and structural aspects of the agreed OD
• Entering and Contracting This initial phase is a necessary part of every OD project, although the
process and formality vary considerably, depending on the situation. These initial steps involve a
preliminary exploration of the organization’s problems and issues, plus developing a collaborative
relationship between the OD Practitioner and key members of the client organization regarding
• This initial phase is a necessary part of every OD project, although the process and formality vary
considerably, depending on the situation. These initial steps involve a preliminary exploration of the
organization’s problems and issues, plus developing a collaborative relationship between the OD
Practitioner and key members of the client organization regarding how to work on those issues.
• Entering and contracting are quite different for an external consultant who is completely new to the
organization than for a consultant who is internal or has a previous history with the organization. There
are both advantages and disadvantages to being an internal or external OD Practitioner. In major
projects, it often is useful to involve both in a team.

OD and change management by Abdurezak M.(PhD.) 5

• Some of the issues in almost all cases are:
• What is the presenting problem and how do you honor this while determining what are the real
organizational problems and issues? How do you deal with a predetermined diagnosis and specified
“solution” which may not be what is needed?
• Who is the client and how do you deal with the multiplicity of stakeholders?
• How much readiness for change is present and how can a satisfactory degree be developed?
• Dealing with confidentiality vs. the need to surface important issues that may have been
undiscussible
• Trust – building and maintaining it
• Consultant expertise and role
• Ethical and value system conflicts
• Contracting involves both the mechanical/legal/financial arrangements, but also psychological
contracting [developing a common understanding with commitment and comfort between the
consultant and the primary client(s)]. Contracting should include developing shared clarity about:

OD and change management by Abdurezak M.(PhD.) 6

• Goals for and scope of the consulting project
• Anticipated results and mutual expectations
• Operating ground rules
• Role of the consultant
• Responsibilities of both consultant and client
• Point of contact (who in the organization makes decisions about the project and is the primary interface for the
consultant)
• Schedule
• Resources, fees, and arrangements for payment
• Termination procedures
• Some potential “red flags” in the consultant-client relationship that may arise during entry and contracting include:
• Insufficient or ambiguous level of commitment to change
• Resistance or opposition by major stakeholders
• Major clients lack power to influence change or manage the boundaries to allow change within their organization
• Client’s desire to manipulate the consultant or use the consultant in ways that violate the latter’s ethical framework

OD and change management by Abdurezak M.(PhD.) 7

Stage 1: Anticipating a need for change

• Organization /leader recognizes that a problem exists

which impact the effectiveness, mission & health of
organization.

• Leadership has a vision of a better way and wants to

improve the organization in term of performance.

• Dissatisfaction with the present situation.

• To achieve the first steps towards reaching the desired

vision.

• Business is not as usual

Stage 1: Anticipating a need for change
 STAGE 1 :
Anticipate a Need for Change
• The first step in manager’s perception that the organizational in
a state of disequilibrium or need improvement.
• There must be a felt need. It will convince individuals to
adopt new ways.
• Managers must be sensitive to changes in the competitive
environment.
– “what’s going on out there”
 Entering into an OD Relationship:

• An OD process generally starts when a member of an organization or unit contacts an OD

practitioner about potential help in addressing an organizational issue. The organization
member may be a manager, staff specialist, or some other key participant, and the practitioner
may be an OD professional from inside or outside of the organization.
• Determining whether the two parties should enter into an OD relationship typically involves
clarifying the nature of the organization’s current functioning and the issue(s) to be addressed,
the relevant client system for that issue, and the appropriateness of the particular OD
practitioner.
• In helping assess these issues, the OD practitioner may need to collect preliminary data about
the organization. Similarly, the organization may need to gather information about the
practitioner’s competence and experience.
• This knowledge will help both parties determine whether they should proceed to develop a
contract for working together. The activities involved in entering an OD relationship are:
clarifying the organizational issue, determining the representatives of the client organization,
and selecting the appropriate OD practitioner.
OD and change management by Abdurezak M.(PhD.) 11
 STAGE 2 :
Develop the Practitioner - Client Relationship
• The client is the person or organization that
is being assisted.
• The development of the relationship is an
important determinant of success or failure
of an OD program.
• Depends on good impression or match
between the practitioner and the client
system.
(the formation of a psychological contract)
 STAGE 2 :
Develop the Practitioner - Client Relationship
(cont…)to establish :
• The practitioner attempts
– A pattern of open communication
– A relationship of trust
– an atmosphere of shared responsibility
– Issues with rewards, objectives and
responsibility must be clarified.
– Must decide when to enter the system and
the role should be.
 STAGE 2 :
Develop the Practitioner -
Client Relationship (cont…)
• Examples:
1) Practitioner may intervene with the sanction
and approval of top management or without
support from lower level of organization.
2) (Internal OD practitioner) - OD started at
the vice-presidential level.
3) (External practitioner) – To initiate the
OD program.
Stage 2: Developing the Consultant –Client Relationship

Element of Consultant-Client
Relationship
Client
Client
Consultant Target
Sponsor
Internal / External
System
Person / group in
OD Consultant need and requested Organizational /
for change Units that need OD
intervention
Stage 2: Developing the Consultant –Client Relationship

Interaction between consultant

& client

Target
organization’s Developing Assess the degree
readiness for Consultant – of gap of
change, level of Client Stage understanding
resistance, and OD
culture

Involve organization
members at all levels
and convince them
Stage 2: Developing the Consultant – Client Relationship

Charismatic
Consensus
Open to Others Open to others
Reject Accepts
Responsibility responsibility

Consultant
Client
Relationship
Mode

Apathetic
Gamesmanship
Closed to
Closed to Others
Others
Accepts
Rejects
responsibility
responsibility
 Clarifying the Organizational Issue

• When seeking help from OD practitioners, organizations typically start with a

presenting problem—the issue that has caused them to consider an OD process. It
may be specific (decreased market share, increased absenteeism) or general (“we’re
growing too fast,” “we need to prepare for rapid changes”).
• The presenting problem often has an implied or stated solution. For example,
managers may believe that because members of their teams are in conflict, team
building is the obvious answer. They may even state the presenting problem in the
form of a solution: “We need some team building.”
• In many cases, however, the presenting problem is only a symptom of an underlying
problem. For example, conflict among members of a team may result from several
deeper causes, including ineffective reward systems, personality differences,
inappropriate structure, and poor leadership. The issue facing the organization or
department must be clarified early in the OD process so that subsequent diagnostic
and intervention activities are focused correctly.
OD and change management by Abdurezak M.(PhD.) 18
 Clarifying the Organizational Issue

• Gaining a clearer perspective on the organizational issue may

require collecting preliminary data. OD practitioners often
examine company records and interview a few key members to
gain an introductory understanding of the organization, its
context, and the nature of the presenting problem.
• Those data are gathered in a relatively short period of time,
typically over a few hours to one or two days. They are
intended to provide enough rudimentary knowledge of the
organizational issue to enable the two parties to make informed
choices about proceeding with the contracting process.

OD and change management by Abdurezak M.(PhD.) 19

 Determining the OD Team
Members
• A second activity in entering an OD relationship is to define
who are the team members involved in addressing the
organizational issue.
• Generally such organization members are involved who can
directly impact the change issue, whether it is solving a
particular problem or improving an already successful
organization or department.
• Unless these members are identified and included in the
entering and contracting process, they may withhold their
support for and commitment to the OD process.
OD and change management by Abdurezak M.(PhD.) 20
 Determining the OD Team
Members
• It is not unusual for an OD project to fail because the team members
were inappropriately defined. Determining the team members can vary
in complexity depending on the situation. In those cases where the
organizational issue can be addressed in a specific organization unit,
members of that unit must be included in the entering and contracting
process.
• For example, if a manager asked for help improving the decision-
making process of his or her team, the manager and team members
would be the part of the OD process. Unless they are actively involved
in choosing an OD practitioner and defining the subsequent change
process, there is little likelihood that OD will improve team decision
making.
OD and change management by Abdurezak M.(PhD.) 21
 …Team Members
• In complex situations, OD practitioners need to gather additional
information about the organization to determine the relevant team members.
• When examining company records or interviewing personnel, practitioners
can seek to identify the key members and organizational units that need
to be involved.
• For example, they can ask organization members such question as who can
directly impact the organizational issue.
• Who has a vested interest in it?
• Who has the power to approve or reject the OD effort?
Answers to those questions can help determine who is the relevant team for the entering
and contracting stage, although the members may change during the later stages of the
OD process as new data are gathered and changes occur.

OD and change management by Abdurezak M.(PhD.) 22

 Selecting an OD Practitioner:
• The last activity involved in entering an OD relationship is selecting an OD
practitioner who has the expertise and experience to work with members on the
organizational issue.
• Unfortunately, little systematic advice is available on how to choose a competent OD
professional, whether from inside or outside of the organization.
• Perhaps the best criteria for selecting, evaluating, and developing OD practitioners
are those suggested by the late Gordon Lippitt, a pioneering practitioner in the field.
• Lippitt listed areas that managers should consider before selecting a practitioner,
including the ability of the consultant to form sound interpersonal relationships, the
degree of focus on the problem, the skills of the practitioner relative to the problem,
the extent that the consultant clearly informs the client as to his or her role and
contribution, and whether the practitioner belongs to a professional association.
References from other clients are highly important.

OD and change management by Abdurezak M.(PhD.) 23

 Selecting an OD Practitioner
• A client may not like the consultant’s work, but it is critical to know the
reasons for both pleasure and displeasure. One important consideration is
whether the consultant approaches the organization with openness and an
insistence on diagnosis or whether the practitioner appears to have a fixed
program that is applicable to almost any organization.
• Certainly, OD consulting is as much a person specialization as it is a task
specialization. The OD professional needs not only a repertoire of technical
skills but also the personality and interpersonal competence to use himself or
herself as an instrument of change. Regardless of technical training, the
consultant must be able to maintain a boundary position, coordinating among
various units and departments and mixing disciplines, theories, technology,
and research findings in an organic rather than a mechanical way.

OD and change management by Abdurezak M.(PhD.) 24

 Selecting an OD Practitioner
• In selecting an OD practitioner, perhaps the most important
issue is the fundamental question,
• how effective has the person been in the past, with what kinds of
organizations, using what kinds of techniques?
• In other words, references must be checked.
• The burden of choosing an effective OD practitioner should not
rest entirely with the client organization.
• Consultants also bear a heavy responsibility for seeking an
appropriate match between their skills and knowledge and what
the organization or department needs.
OD and change management by Abdurezak M.(PhD.) 25
 Developing a Contract

• The activities of entering an OD relationship are a necessary

prelude to developing an OD contract. They define the major
focus for contracting, including the relevant parties.
• Contracting is a natural extension of the entering process and
clarifies how the OD process will proceed. It typically
establishes the expectations of the parties, the time and
resources that will be expended, and the ground rules under
which the parties will operate.
• The goal of contracting is to make a good decision about how
to carry out the OD process.
OD and change management by Abdurezak M.(PhD.) 26
 Developing a Contract
• It can be relatively informal and involve only a verbal agreement between the client and
OD practitioner if is from internal, or contracting can be more protracted and result in a
formal document. That typically occurs when organizations employ outside OD
practitioners.
• Regardless of the level of formality, all OD processes require some form of explicit
contracting that result in either a verbal or a written agreement.
• Such contracting clarifies the client’s and the practitioner’s expectations about how the
OD process will take place. Unless there is mutual understanding and agreement about
the process, there is considerable risk that someone’s expectations will be unfilled. That
can lead to reduced commitment and support, to misplaced action, or to premature
termination of the process.
• The contracting step in OD generally addresses three key areas: what each party
expects to gain from the OD process, the time and resources that will be devoted to
it, and the ground rules for working together.

OD and change management by Abdurezak M.(PhD.) 27

 Mutual Expectations:

• This part of the contracting process focuses on the expectations of the client and
the OD practitioner. The client states the services and outcomes to be provided by
the OD practitioner and describes what the organization expects from the process
and the consultant.
• Clients usually can describe the desired outcomes, such as decreased turnover or
higher job satisfaction. Encouraging them to state their wants in the form of
outcomes, working relationships, and personal accomplishments can facilitate the
development of a good contract.
• The OD practitioner also should state what he or she expects to gain from the OD
process. This can include opportunities to try new interventions, report the results
to other potential clients, and receive appropriate compensation or recognition.

OD and change management by Abdurezak M.(PhD.) 28

 Time and Resources:

• To accomplish change, the organization and the OD

practitioner must commit time and resources to the
effort.
• Each must be clear about how much energy and
how many resources will be dedicated to the
change process. Failure to make explicit the
necessary requirements of a change process can
quickly ruin an OD effort.

OD and change management by Abdurezak M.(PhD.) 29

 Time and Resources

• Essential requirements are things that are absolutely

necessary if the change process is to be successful. From
the practitioner’s perspective, they can include access to
key people or information, enough time to do the job, and
commitment from certain people.
• The organization’s essential requirements might include a
speedy diagnosis or assurances that the project will be
conducted at the lowest price. Being clear about the
constraints on carrying out the assignment will facilitate the
contracting process and improve the chances for success.
OD and change management by Abdurezak M.(PhD.) 30
 Ground Rules:

• The final part of the contracting process involves specifying how the
client and the OD practitioner will work together.
• The parameters established may include such issues as
confidentiality, if and how the OD practitioner will become involved
in personal or interpersonal issues, how to terminate the relationship,
and whether the practitioner is supposed to make expert
recommendations or help the manager make decisions.
• For internal consultants, organizational politics make it especially
important to clarify issues of how to handle sensitive information
and how to deliver bad news.” Such process issues are as important
as the needed substantive changes. Failure to address the concerns
may mean that the client or the practitioner has inappropriate
assumptions about how the process will unfold.

OD and change management by Abdurezak M.(PhD.) 31

 ENTERING INTO AN OD
RELATIONSHIP
• An OD process generally starts when a member of an organization or unit contacts
an OD practitioner about potential help in addressing an organizational issue. The
organization member may be a manager , staff specialist, or some other key
participant; the practitioner may be an OD professional from inside or outside of the
organization.
• Entering and contracting are the initial steps in the OD process. They involve
defining in a preliminary manner the organization‘s problems or opportunities for
development and establishing a collaborative relationship between the OD
practitioner and members of the client system about how to work on those issues.
• Entering and contracting set the initial parameters for carrying out the subsequent
phases of OD: diagnosing the organization, planning and implementing changes, and
evaluating and institutionalizing them. They help to define what issues will be
addressed by those activities, which will carry them out, and how they will be
accomplished.
OD and change management by Abdurezak M.(PhD.) 32
 ENTERING INTO AN OD
RELATIONSHIP
• Entering and contracting can vary incomplexity and formality depending on
the situation.Clarifying the Organizational Issue:When seeking help from OD
practitioners, organizationstypically start with a presenting problem—the
issuethat has caused them to consider an OD process.It may be specific
(decreased market share,increased absenteeism) or general (―we‘re growing
toofast,‖ ―we need to prepare for rapid changes‖).
• The presenting problem often has an implied orstated solution. For example,
managers may believethat because members of their teams are inconflict, team
building is the obvious answer. Theymay even state the presenting problem in
theform of a solution: ―We need some teambuilding.‖ In many cases,
however, the presentingproblem is only a symptom of an underlyingproblem.
For example, conflict among members of ateam may result from several
deeper causes
OD and change management by Abdurezak M.(PhD.) 33
 ENTERING INTO AN OD
RELATIONSHIP
• including ineffective reward systems, personality differences,inappropriate structure, and
poor leadership.organization or department must be clarified early inthe OD process so that
subsequent diagnostic andintervention activities are focused correctly. Gaining aclearer
perspective on the organizational issue mayrequire collecting preliminary data. OD
practitionersoften examine company records and interview a fewkey members to gain an
introductory understandingof the organization, its context, and the natureof the presenting
problem. Those data are gatheredin a relatively short period of time, typicallyover a few
hours to one or two days. Theyare intended to provide enough rudimentary knowledgeof
the organizational issue to enable the twoparties to make informed choices about
proceedingwith the contracting process. The diagnostic phaseof OD involves a far more
extensive assessmentof the problematic or development issue that occursduring the
entering and contracting stage. Thediagnosis also might discover other issues that needto
be addressed, or it might lead to redefiningthe initial issue that was identified during
theentering and contracting stage. This is a primeexample of the emergent nature of the
ODprocess, where things may change as newinformation is gathered and new events occur.

OD and change management by Abdurezak M.(PhD.) 34

 Organization Environments and
Inputs
• Clarifying the Organizational Issue
• Presenting problem
• Symptoms
• Determining the Relevant Client
• Working power and authority
• Multiple clients -- multiple contracts
• Selecting a Consultant
• Expertise and experience
OD and change management by Abdurezak M.(PhD.) 35
 Elements of an Effective OD
Elements
Proposal
Description
Goals of proposed project Descriptive, clear, and concise goals to be
achieved
Proposed process or Description of (1) diagnosis, (2) data analysis
action plan process, (3) feedback process, and (4) action-
planning process
Roles and responsibilities What will various leaders, including the OD
Fees, terms, and practitioner, be held accountable for?
conditions
Recommended Provide change strategies, including
Interventions education/training, political influence, structural
interventions, and confrontation of resistance.
Fees, terms, and Outline fees and expenses associated with the
conditions project
OD and change management by Abdurezak M.(PhD.) 36
 Elements of an Effective
Contract
• Mutual expectations are clear
• Outcomes and deliverables
• Publishing cases and results
• Involvement of stakeholders
• Time and Resources
• Access to client, managers, members
• Access to information
• Ground Rules
• Confidentiality

OD and change management by Abdurezak M.(PhD.) 37

Interpersonal Issues in Entering & Contracting

• Client Issues
• Exposed and Vulnerable
• Inadequate
• Fear of losing control
• OD Practitioner Issues
• Empathy
• Worthiness and Competency
• Dependency
• Over identification

OD and change management by Abdurezak M.(PhD.) 38

 The Entering Process

• Clarifying the Organizational Issue

– Presenting Problem
– Symptoms
• Determining the Relevant Client
– Working power and authority
– Multiple clients -- multiple contracts
• Selecting a Consultant
 Elements of an Effective Contract

• Mutual expectations are clear

– Outcomes and deliverables
– Publishing cases and results
– Involvement of stakeholders
• Time and Resources
– Access to client, managers, members
– Access to information
• Ground Rules
– Confidentiality
 Emotional Demands of Entry

• Client Issues
– Exposed and Vulnerable
– Inadequate
– Fear of losing control
• OCD Practitioner Issues
– Empathy
– Worthiness and Competency
– Dependency
– Over identification
 CURRENT CONDITION INTENDED CONDITION
• Decreasing Revenue • Increasing Revenue
• Structure : Divisional, • Costumer focus
limited to expand • Center Of Excellent
• Style : Conservative
• Culture : nice
• Staff never fired

OCD process

Entering Contracting
 Entering CO
O

Clarifying Determining Selection

Issue Relevant OD
Organization Client Practitioner
COO + Senior VP s
Professor
HRD + Dir of
Training & OCD

Clarifying Proposal
Issue
Organizes Contract
Action
Plan
Design Team Learning, Initial
Selection Visioning Mutual Time & Ground
Implementatio Expectatio Resource Rules
& n Step
Diagnosing n s
Owner + rep. Monitoring, • free access
Correction $xx,xxx 3-5
key area + • time
& Evaluation year
key Infl + Direct expenses action plan flexibility
Impl • Access
sensitive
data
 Elements of an Effective Proposal
Content Description
Goals of Descriptive, clear, and concise goals to be
Proposed Effort achieved
Recommended Description of 1) diagnosis, 2) data analysis
Action Plan process, 3) feedback process, and 4)
action- planning process
Specification of What will various leaders, including the OCD
practitioner, be held accountable for?
Responsibilities
Strategy for Provide change strategies, including
Achieving the education/training, political influence, structural
Desired interventions, and confrontation of resistance.
State
Fees, terms, and Outline fees and expenses associated with
conditions the project