Organizational conflict and dysfunction in John Zoltan's OD group

Organizational Change

The macro level problem for this company is that there is no coherent purpose for the OD group. The group was hired, most of them outsiders with little experience, by John Zoltan. Strategically, it is unclear what they contribute. They act like rock stars and Zoltan treats them as such, but they do not make a specific contribution to the company, and certainly not one that justifies their salaries and expenses.

On the micro level, this disconnect between the cost of the OD group and the benefit, along with their attitudes, has cause a lot of rifts within the organization. Zoltan is strongly in favor of the group, as they are his pet project, but the rest of the organization struggles to see the usefulness of the group, and the group themselves do little to endear themselves to everybody else. So there is a high level of interpersonal conflict in this case. Some of this conflict with between Zoltan and other high-level managers, some between members of the OD team, and other conflict is between the OD team and the rest of the company.

2. Causes

a. The major structural problem here is that the OD team really does not fit anywhere. From a strictly pragmatic level, this results in their budget being allocated around the organization, crippling the bottom lines of the different managers -- this probably affects their bonuses. So structurally, the OD group has no real fit and it seems as though their work is in line with that.

b. From a psychological perspective, the OD group is a disaster. Four of five members are freshly-minted MBAs with no experience, and they have been given a lot of power within the company. Everything they do affects the company's experienced managers, and there is a high level of resentment from just about every outside the OD group. Zoltan has invested a lot of ego in this group -- they are his pet -- and this causes friction between the company's other managers, who see the group as a needless expense.

c. The technical problems here relate to the way that the group runs. Their work has never really been justified by management and there is no buy-in from anybody in the company. Thus, the OD group does not have any real support anchor other than Zoltan, and that includes financial support and their expenses are being paid by the rest of the company. Remove the monetary issue and the other managers might be more willing to let Zoltan have his toy.

d. From a managerial point-of-view, the OD group is a bust. They do not serve any real purpose. The company's management is sometimes impressed with their work, but others view it as a waste of time and money. This might just be a communication problem, but it could be a problem with the work that the group is doing -- if there is a purpose and direction this needs to be effectively communicated to the rest of the organization and buy-in from the affected stakeholders should exist.

e. The OD group should contribute to the organization meeting its goals. At this point, it is hard to argue that case. The OD group's mandate and mission seem unclear, and if that is the case then clearly they are not doing enough to help Hexadecimal achieve its strategic objectives.

Recommendations

It is recommended that the group is scrapped. The problem with special task forces is that they need a lot of credibility within the organization to succeed in implementing their bold visions. A group of zip-faced kids from outside the company, whose only authority comes from pieces of paper where the ink is still wet, will never have credibility within this company. Even Zoltan seems to have tuned half of them out. There is no coherent contribution that they make to helping the company achieve its strategic objectives. They are expensive, and these costs are being billed to other people. Basically, something like this OD group needs to be tremendous effective in order to justify its existence, and that has not been the case at Hexadecimal. So the best course of action right now is to admit that there was a mistake in bringing this group in. If some of them seem like they'll make good managers, put them in that role. The others can be let go.

If it is determined that a task force studying organization design issues could be valuable, that is something that can be done with an internal task force that consists of established company veterans, and maybe one fresh consultant with functional knowledge of the area. Further, Zoltan needs to take responsibility for this mess. At present, he is mostly dodging it. That is not good enough for the President. This was his idea and he designed the way that the group would be populated and their position in the org chart. So Zoltan needs to unwind his pet project and refocus energy on things that will bring a positive return on investment.