The System Design Approach to Organizational Development: The University of Arizona Model

Leadership in the design of organizational systems is the primary focus of an organizational development (OD) position. The OD consultant (internal or external) guides the leadership group to understand the complex nature of human organizations and the need for creation of systems and processes that support the mission, values, goals, and vision of the organization. As organizational structures change to adapt to new environmental challenges and development of a new culture is required, the approach to, and design of, new organizational systems will be critical to the success of the organization. This article will define for OD practitioners, human resource professionals, and library leaders some of the myriad organizational support systems that must be created and integrated to support new, postmodern organizational structures where collaborative learning, participative decision-making, and shared accountability can ensure adaptability, flexibility, and the potential for future success. The author’s experience in the University of Arizona (UA) Library over the past ten years will be used to articulate potential approaches while sharing personal views of the successes and challenges. Introduction Over the past ten years, the University of Arizona (UA) Library has been a laboratory for learning about organizational change. This article does not intend to advocate for any particular change model but rather to share observations from one individual who has played a leadership role in that change process and to frame those observations within a developing Shelley E. Phipps, Assistant Dean for Team and Organization Development, University of Arizona Library, Tucson, AZ 85721 69 phipps/system design approach theory that organizational change is best studied and assessed through the lens of system integration. Certain organization researchers will be central to the exposition of theory embraced in this article. The work of W. Edwards Deming, Peter Scholtes, and Peter Senge form the core of the systems theory presented here. Deming defines a system as “a network of interdependent components that work together to accomplish the aim of the system. . . . An example of a system, well-optimized is a good orchestra” (1994, p. 50). Scholtes notes, “Systems consist of subsystems or, if they’re small enough in scope, processes. What is the point at which something is no longer a system or a subsystem but becomes a process? I don’t know. (When does a ship become small enough to be called a boat?)” (Scholtes, 1998, p. 58). In this article the term “system” will be operationally defined as the network of processes that provides the infrastructure or framework that supports the actual work of an organization, the Gemba, as Scholtes calls it. “The Gemba is the assembly of critical resources and the flow of work that contribute to those efforts that directly add value to the customer” (Scholtes, 1998, p.76). The infrastructure systems described in this article are nonGemba; rather they are those that exist to support the Gemba: the leadership system, the team system, the planning system, the communication system, the process improvement system, the performance effectiveness management system, the compensation and reward system, and the recruitment and hiring system. While this article focuses on several important systems, there are other systems that are also crucial to library organizational success, especially the management information system, the technological system, the budgeting system, the fundraising system, and the marketing system. Deming believed that most problems in an organization can be attributed to a system, not to people. “In my experience, most troubles and most possibilities for improvement add up to proportions something like this: 94% belong to the system (the responsibility of management); 6% are attributable to special causes” (Deming, 1994, p. 33). Scholtes adds his viewpoint on the importance of becoming knowledgeable about organizational systems and identifies what is wrong with our present systems. Among a long list of current systems issues, which he calls “brainshakers,” he includes the following: We look to heroic efforts of outstanding individuals for our successful work. Instead we must create systems that routinely allow excellent work to result from the ordinary efforts of people. . . . Changing the system will change what people do. Changing what people do will not change the system. . . . The greatest conceit of managers is that they can motivate people . . . attempts (they make) will only make things worse. . . . Behind incentive programs lies management’s patronizing and cynical set of assumptions about workers . . . Managers imply that their workers are withholding a certain amount of effort, waiting for it to be bribed out of them. (Scholtes, 1998, p. ix–x) 70 library trends/summer 2004 Senge’s works, The Fifth Discipline(1990) and The Fifth Discipline Fieldbook (Senge et al., 1994), also have greatly influenced the theories put forward here. Senge brings together the need for systems thinking with the practice of other disciplines. “The organizations that will truly excel in the future will be the organizations that discover how to tap people’s commitment and capacity to learn at all levels” (Senge, 1990, p. 4). His five disciplines outline practices that will enable continuing reflection, research, and learning about organizational systems and human development that can result in continuous improvement. Viewing the organization as a system within systems and made up of systems (systems thinking), supporting people in gaining proficiency and pursuing personal visions (personal mastery), making conscious our deeply held beliefs and assumptions and examining their appropriateness (mental models), developing the capacity to hold a shared picture of the future we seek to create (shared vision), and using dialogue to increase the capacity of groups to learn and discover new insights (team learning) are the five key practices that can unleash the potential for organizational learning (Senge, 1990, pp. 5–12). These practices or disciplines must be embedded in the systems we design to support organizational success. In a recent essay Senge emphasizes that “Purpose is emergent. It can never be specified by design. . . . Emergence alters design. As purpose evolves, so too will function” (Senge, 2000, p. 78). The following examination presupposes that, as the mission for academic libraries emerges in the postmodernist, digital age, there will be a critical need to understand how the design of organizational systems support that expanding and, perhaps, changing mission. The views expressed are those of the internal organization development consultant to one library, which, over the past ten years, has prepared for the transformational changes that will occur in the twenty-first century. Background on the University of Arizona Library’s Evolution as a Team-Based, Customer-Focused, Learning Organization In 1989 the University of Arizona Library administrators charged a task force, the Access and Ownership Task Force, to investigate the impact of rising serial prices on the library’s ability to continue to build high-quality research collections. Analysis of the effect of internal budget reductions and external forces within the scholarly communication process, not the least of which were the escalating costs of purchasing and warehousing large collections, led the task force to recommend that the library pursue an “access” strategy in the future in order to ensure its success in serving the university in its vision of being a top-tier Research I institution.1 The Task Force also recommended that a new organizational structure would 71 phipps/system design approach be needed to support this new and very different strategic focus. This recommendation was in place as the new dean arrived in 1990. In 1992 the new dean of libraries recognized the need to develop a strategy that would move the library forward strategically and formed a steering committee to complete a self-study. The charge included: (1) identifying what values, vision, and assumptions should drive the creation of an organization that would ensure future success, and (2) deciding (with the dean’s input) how that organization should be structured. In 1993 this committee decided that the library should become a team-based, customer-focused, quality, learning organization. After reading the literature on organizations and receiving input from staff, faculty, and students, key assumptions of this “new” organization were developed by the steering committee. The following summary describes the thinking of those involved in this decision: A. Increased staff productivity and quality service would ensure that the library remained central to the university’s educational and research mission despite continued and expected budget reductions. Service would become more and more technology based and customers would demand self-sufficiency. B. Involvement and empowerment of the entire staff in the new teambased organization would lead to the development of new capabilities that would be needed for a successful future. Teams would “own” work processes and set goals that resulted in quality service for customers. C. Assessment of current and future customer needs would be central to strategic planning, prioritization of work, and the allocation of resources. Data and information would be the basis for decision-making, not authority and personal experience. D. Self-accountability and organizational support for personal mastery and team learning would result in high performance and commitment to continuous learning. Staff would receive support to successfully engage in change. This would help the library adapt to a radically different model of organization effectiveness and remain flexible enough to respond quickly to changes in the environment. E. The focus of the organization would be strategically planning for the future, investing in continuous process improvement and technological innovation as users’ needs change and the capabilities of electronic technology transform the way libraries provide access. These key assumptions drove not only the creation of a new structure but also the need to create organizational systems that supported people to be successful in working within that structure. Over the next ten years these systems that would support the goals of the library—high performance, continuous improvement, cost containment, increased access, satisfaction 72 library trends/summer 2004 of future customers as well as the development of a competent, committed, successful, and highly motivated staff—were developed. The new organizational systems would align together to support the culture change. The organizational change would be drastic. The UA Library of the 1970s and 1980s was a participative but traditionally hierarchical, nontechnical, inward-focused organization that valued collection building and was based on a service model that assumed users’ dependence on mediation. The new goals called for a flatter organization with shared decision-making and problem-solving responsibilities, utilizing technology for its potential to increase access and support innovative, unmediated self-service. External focus would help the staff anticipate, meet, and surpass the expectations of customers—even as their research and learning needs and expectations changed radically. As the nonhierarchical approach took shape, it was clear that all the embedded systems that had supported work in the former organizational structure were incompatible with the new structure and goals. Every system—from the leadership and hiring systems to work process design and performance management—would have to change. Strong commitment to the new values and vision held the pioneering group together in the early days of experimentation, but it became clear this would not be enough to sustain the practices desired in the new organization. Systems aligned with goals and principles needed to be created, implemented, and melded with the structure and adopted as central to the organization’s culture. Culture change would not have been possible without systems change. The key driver for the University of Arizona Library’s 1993 restructuring was the continuing need to respond to present and future budget reductions. The need to eliminate non-value-added work, cut costs, implement new electronic services, and continuously improve quality as customers became more demanding called for a radically different leadership system. The steering committee decided to reduce the number of work units and to replace traditional positions of hierarchical, managerially focused department heads with facilitative leaders of teams. They believed that more value-added work could be performed by leader-led teams than by manager-led departments. They also believed that staff and librarians, if called upon to work at the highest levels of their classification and full professional abilities, would need little supervision. As leaders facilitated agreement on mission, vision, and values, conflict would be minimal; as staff were empowered to participate fully in decision-making, the need to manage people in a hierarchical supervisory system would be greatly reduced. Facilitated group decision-making would replace the need for unilateral managerial decisions and would actually increase the quality of decisions made, as well as the commitment to implementation. Functional, or permanent, teams and cross-functional, temporary, teams would work together to accomplish strategic work. Assessment would lead to “just in time” projects. As learning increased, quality would increase. As 73 phipps/system design approach customers’ needs changed, the organization would be able to restructure to respond appropriately. Staff would not just have a job, they would be members of the organization, working where their skills were needed, completing projects and moving on to other more strategic work. This vision was consistent with then-current organizational theories. Today’s organizations are evolving into federations, networks, clusters, cross-functional teams, temporary systems, ad hoc task forces, lattices, modules, matrices—almost anything but pyramids with their obsolete top-down leadership. Organizations that want to be in the phone book in 2005—will be led by leaders who encourage healthy dissent and values those followers courageous enough to say no. Success will go to the leader who exults in cultural differences and knows that diversity is the best hope for long-term survival and success. (Bennis, 2000, p. 121) The UA Library continues to function within the team-based, shared leadership model. Responsibility and authority for decision-making is shared throughout the organization among the functional and cross-functional teams and leadership groups. To a large extent, strategic planning and budgeting decisions are made by standing cross-functional teams appointed by the Library Cabinet, the library-wide leadership group. Teams are charged to decide their own annual plans based on assessment of implicit and explicit, present and future needs of customers. Technical infrastructure systems are designed by cross-functional teams using a formal systems analysis approach. Restructuring of teams and redesign of work processes often occurs after formal process improvement studies have been conducted by cross-functional teams. All teams are guided to seek ways of reducing costs while increasing quality. The discipline of personal mastery is embedded in all systems. Staff and librarians volunteer for and lead cross-functional teams, step in to fill team-leader vacancies, and participate fully in library-wide dialogues, sharing responsibility for continuous improvement. In addition, although all functional team leaders report directly to the dean, most library-wide policy and budget decision-making is delegated to the fifteen-member Cabinet, where decisions are made by consensus. All faculty and staff search teams utilize consensus decision-making, with the dean joining the team for faculty searches. Leadership responsibilities for communicating externally involve subject experts as well as team leaders. Liaison responsibilities with the campus deans and faculty are delegated to the team leaders and teams. The dean and Cabinet play a strong role in guiding and supporting teams, questioning draft plans, and giving input to proposed solutions and methods for improving services, but ultimate decision-making authority lies with the teams. Each cross-functional team is charged with gathering and analyzing data, assessing needs, benchmarking good practices, and choosing alternate methods for resolving issues or creating new services or structures. Data, analysis, and experimentation guide the decision-making process. 74 library trends/summer 2004 Leadership support provided by the internal organization development (OD) consultants has been critical to sustaining this model. In 1993 training in facilitative leadership skills, teambuilding, facilitation of meetings, and communication of the guiding principles was the primary focus. In 1994 and 1996 training was needed in initiating process improvement approaches, helping teams to integrate tools, and techniques for group decision-making and problem-solving. As the team-based organization matured, consulting on organization design and facilitating the integration of non-Gemba organizational systems became the leadership focus of these OD personnel helping the organization to apply new theory and practice. Kotter notes that in any change process, “consolidating gains and producing more change” is critical. In order to be ultimately successful, Kotter contends, the organization must be committed to “Changing all systems and structures that do not fit together and don’t fit the transformation vision; hiring, promoting, and developing people who can implement the change vision; and reinvigorating the process with new projects, themes, and change agents” (Kotter, 1996, p. 21). Alignment of systems is critical to success; misalignment will not only cause confusion for the members of the organization but potentially derail the change vision itself. During this ten-year journey the UA Library has recognized that customers and stakeholders are the focus of all library initiatives. The staff bring their collective professional values, vision, and commitment to quality to problems customers encounter finding information, accessing the cultural record, learning, and contributing to the continuing development of knowledge. Many successes have put the UA Library in the forefront of academic libraries. Developing the Non-Gemba Organizational Systems The development of organizational support systems is time consuming and challenging. Each system requires rethinking of system goals and processes. Design of new systems requires broad organizational and human resource knowledge. Systems that are deeply embedded in a hierarchical culture are not easy to replace. A feeling of loss, a sense of confusion, and lack of understanding of the reasons for change often lead to difficulties in the implementation period. Constant assessment and refinement of the system are required. New members, new leaders, and new external challenges keep the development of the systems in flux. The dynamic and complex change process demands that the leadership system be developed first. The order of descriptions of each system below reflects, generally, the order in which the UA Library developed its present organizational infrastructure, although there may be a more logical order of approach. It should also be recognized that parts of these systems need to be put in place simultaneously and as early as possible. Adherence to basic principles such as empowerment, accountability, and personal mastery, and the goals 75 phipps/system design approach of maximizing capacity, supporting change, being responsive to customers’ needs, and demonstrating a return on investment for stakeholders are paramount concerns during the design and implementation periods. Each of the goals of selected systems will be described, methods for creation suggested, and challenges outlined in the context of what has been learned at the University of Arizona over the past ten years. The Leadership System Heifetz and Sinder (1988), in studying the mid-twentieth-century literature on leadership, note that during this period a leader’s capabilities to create and articulate a compelling vision, combined with interpersonal skills that enable others to commit to and participate in whatever it takes to reach that vision, characterized the modernist theory of leadership. They reported that the complex nature of current organizations and the rapidly changing environment have led to a new view of leadership. Kegan agrees with their postmodernist view that in this new environment of constant change, successful leaders lead by “providing context in which all interested parties, the leader included, can together create a vision, mission, or purpose they can collectively uphold” (Kegan, 1994, p. 322). In this postmodernist view, the era of the hero leader has passed, and a new model of collaborative, facilitative leadership emerges. The leader’s role is to facilitate a shared leadership system, creating an organization that successfully capitalizes on the total competence of its members and is flexible, strategic, action oriented, and learning focused in an environment of radical change. The role of the facilitative leader is that of teacher, architect, visionary, steward, and guide (Senge, 1990; Scholtes, 1998; Bennis, 2000). The facilitative leader recognizes his/her own incomplete knowledge and at the same time appreciates that wide-ranging information, opinion, data, cultural perspective, technological skill, and varying experience are critical to organizational success. The facilitative leader guides and influences and insists on accountability to customers. Internally, he/she supports continuous dialogue, fact checking, testing, assumption questioning, and the creation of vision that will focus the organization on a successful future. The leader orchestrates the creation of a culture through the development of systems that mine the full capability of the organization, allocating leadership responsibilities to teams on every level throughout the organization. Dew (2003) also recommends that leaders focus on studying organizational systems to uncover the beliefs and behaviors that shape these systems and ask whether there is congruence between belief, behavior, vision, and purpose. Along with Deming and others, Dew holds that it is the job of leadership to uncover the root causes of lack of quality in an organization and to develop a culture and systems that support quality. He purports that a dysfunctional belief system embedded in a leadership system will cause an organization to fail to reach its quality 76 library trends/summer 2004 goals and challenging vision. His list of dysfunctions include placing budgetary, schedule, and political considerations ahead of quality; being arrogant; lacking fundamental knowledge, research, or education; pervasively believing in entitlement; and “practicing autocratic behaviors that result in endullment [sic]” (Dew, 2003, pp. 4–7). People hear the quality message and leaders embrace the quality lingo, but when quality principles and philosophy run into the deeply entrenched dysfunctional belief system in these organizations, quality is tossed out and condemned. Managers denigrate quality concepts as a fad and return to their focus on costs, schedule, political manipulation, arrogance, ignorance and entitlement. At the heart of such leadership system dilemmas are what Argyris calls “dominant theories in use” or “Model I” theories (Argyris, 1985, 1990, 2000). He holds that values represented in actions, actual behaviors, and their consequences are predictable because of a basic belief system associated with the modernist leadership system—that leaders must be in control, must appear to win, and must suppress negative feelings. In response to these beliefs, leaders actually behave in this way by advocating views, evaluating performance, and attributing causes or explanation without actual research or the intention of creating “actionable knowledge.” Overall, Argyris concludes that Model I behaviors combine with Model I values: The governing values (in Model I) include Be in unilateral control; Win, do not lose; and Suppress negative feelings. The three dominant action strategies (Model II) are Advocate views, Evaluate performance, and Attribute causes or explanations. When these are produced consistently with Model I values, they will result in defensive consequences such as escalating errors, self-fulfilling prophesies, and self-seeking processes. (Argyris, 2000, p. 421) Ultimately, routine learning, not transformational learning, occurs. Dew points out that this culture becomes self-perpetuating as those who are selected for promotion are those whose espoused values and visible behaviors reflect the larger managerial group. “If few quality managers make it into senior management positions, it may be because, in some organizations, senior management does not really believe in the quality concepts” (Dew, 2003, p. 6). It is very challenging in this Model I world to change the leadership system to one of collaboration, learning, and facilitation. “Dialogue, reasonableness, and fair treatment of alternative points of view,” though “difficult and sometimes impossible to attain” (Kegan, 1994, p. 328), are an integral part of a shared leadership system. Development of consensus as opposed to the development of group agreement to a single leader’s vision or espousal of a “right” theory is the goal. All staff participate in leadership with the facilitative leader teaching; sharing information that only he/she has; prodding the group to engage fully in discovering “reality”; and engaging in inquiry and advocacy to increase the quality of thinking. Guiding the group to closure through synthesis and summary, 77 phipps/system design approach checking for consensus, and communicating to other important groups and constituents become the primary roles of this new leader. Methods for Creating the Leadership System A significant investment in leadership training is needed to support a shared leadership model. Team leader job descriptions must shift from a managerial focus, with emphasis on in-depth subject expertise and supervisory experience, to a leadership focus, with emphasis on interpersonal and facilitation skills, visioning capabilities, and a commitment to consensus building and the success of others. Expectations for team leaders need to be communicated and training provided. Leadership training retreats, which can be facilitated by campus or national trainers, convey the principles and practices of facilitative leaders and teach approaches to leading group planning, problem-solving, and consensus decision-making. The Association of Research Libraries Office of Leadership and Management Services provided consultation and training to the UA Libraries. In addition, new leaders were sent to national seminars and conferences related to leadership in team-based organizations. A community of practice, the Team Leader Learning Network, was formed, as recommended by MetaWest Consultants, Inc., to enhance collaborative learning of teams and work team leaders who had both managerial and leadership responsibilities. Supervisory responsibilities, although reduced, have not completely disappeared. Developing a shared leadership system requires learning new techniques and tools—facilitation, planning, problem-solving, and decisionmaking tools—the tools “for continuous improvement and effective planning” contained in the Memory Jogger II (Brassard & Ritter, 1994), which provide the formal means for involving groups in quality improvement and learning. These graphic tools outline steps in the research process and teach analytical approaches that assist groups in discovering new ideas, observing and gathering “objective” data, jointly analyzing reality, and developing tests and piloting experiences to assess the ultimate value of decisions. In addition to proficient use of these tools, the facilitative leader reminds the group of the mission, context, and future vision and provides synthesis and feedback. The leader facilitates the full engagement of diverse, knowledgeable people with differing interpersonal skills and varied perspectives. Challenges and Learnings The deeply embedded cultural view of the leader as knowledgeable expert whose vision should be accepted and who has overall control of decision-making is a major barrier to development of a shared leadership model (note Argyris, 2000, p. 421, above). The facilitative leader not only has to constantly communicate that he/she “doesn’t know,” he/she has to develop techniques for helping others, the “followers,” to recognize that they have knowledge to contribute that is valid, useful, and critical. Facilitative leadership is about helping others discover their own leadership capability and the vision within themselves that integrates with others’ visions to cocreate a sustainable and valuable future picture that 78 library trends/summer 2004 calls for enrollment and commitment. Facilitative leadership goes beyond gaining “buy-in,” using external rewards or the honor of positive associative relationships with individual leaders to gain compliance (Senge, 1990, pp. 218–219). The successful facilitative leader builds leader-like followers, who develop skills and act successfully because of their own intrinsic motivation and the opportunity to actualize their own capabilities. The facilitative leader’s greatest virtue is humility. Whereas the modernist leader of the early to mid-twentieth century viewed him/herself as out front or at the top, the postmodernist leader of the twenty-first-century organization recognizes that leadership is a collaborative process; the leader at the top is one among many and all staff assume a variety of leadership roles. Another challenge for the facilitative leader is the lack of training in managing conflict. The leader’s role in a high-performing organization is to uncover conflict, to discover differentiation among viewpoints, and to seek integration that leads to new thinking (Lorsch & Allen, 1973, p. 181). Engaging in explicit efforts to surface conflict is culturally uncomfortable, time consuming, and contrary to an inherent bias for control. The process of building convergence requires ultimate commitment to the value of diversity, skill in moving from dialogue to skillful discussion and decisionmaking (Senge, 1994, p. 386–387), and a concentration of focused time. As external forces and the revolution of customer expectations appear to call for more timely decisions, sharing leadership appears to be counterintuitive. Taking time to develop decisions that are based on research, analysis, and the building of consensus challenges the deeper belief system that leaders must respond quickly and appear authoritative. Facilitative leaders experience a constant tension between learning and performing; involving and moving forward; gathering data, analyzing, and examining alternatives while pressured to achieve results. Naming a specific group of leaders as team leaders and appointing them to a cabinet or top-level council leads to mistaken assumptions that other areas of leadership are “less important” or “less valid.” It is difficult to maintain the “picture” of the widely shared leadership system, with responsibilities spread throughout the organization, when one group assumes a stronger role in providing guidance. True delegation of decision-making is critical. At the UA Library, the Strategic Planning Team decides on a fiveyear plan and then funds and guides the development of annual action strategies. The Information Resources Council allocates the $8,000,000 information resources budget. Policies internal to a team’s processes and services are developed and implemented by those teams. This sharing of decision-making authority is critical to a shared leadership system. Investment in leadership training of staff with wide-ranging abilities is challenging. As capabilities grow, however, the organization is able to reapply newly learned skills and respond more quickly to create new services and technologies. The deep investment in training and staff development 79 phipps/system design approach comes with risks—as staff develop leadership skills, they may pursue promotions elsewhere in more hierarchical organizations. For some, the opportunity to stay in the library and utilize these skills over time in a variety of projects is enough of a reward. For others, leaving the organization for immediate increases in salary and positional status becomes a better option (Scholtes, 1998, p. 375). In the early 1990s there was no system in place at the UA Library to significantly reward those who accepted the leadership challenge. A compensation system needed to be developed that rewarded those who stepped forward and accumulated and practiced leadership skills (see below in the section on compensation). In looking at the leadership system from a staff perspective, the very newness of the team approach required a gradual evolution of the leader’s facilitative role. Staff were familiar with a model of managerial supervision with individual work assigned by and performance appraised by supervisors. Rewards and recognition came from hierarchical authorities. As the team system was implemented some preferred this more passive model and challenged the facilitative leadership approach. Not only did the leaders have to learn to behave differently, they had to support change in how staff approached their work, helping them to expand their capabilities and responsibilities to participate in the leadership system. Facilitative leaders are sometimes forced by external policy requirements to perform the role of evaluative managers. They also continue to be responsible for addressing the few predictable, but time-consuming, personnel problems that result when staff demonstrate less than full commitment to the vision, goals, and team practices. It takes time and patience to uncover the source and investigate what other systems might be contributing to the problem. Facilitative leaders have to look for systems problems when performance is unsatisfactory. Did the hiring process result in a mismatch? Did the orientation process fail to prepare the new staff member? Was the training system adequate? Was the mentoring and performance management process failing? Listening, learning, and analysis are very integral to the facilitative leaders approach. Recently, in-depth training and practice in the use of a nonhierarchical, facilitative, five-step process for confronting and collaboratively solving performance problems, called Constructive Dialogue, has been introduced as a tool that combines good supervisory practice with the team systems approach. Constructive Dialogue stresses the importance of direct feedback, which is offered to support positive change, and active listening, which is designed to help all parties understand, analyze, and choose the best courses of action (Ray, 2002). The leadership system in an organization that is involved in continuous improvement and learning requires a major investment of time, training, and assessment. Alignment of individual efforts with system goals needs to be continually observed. Feedback is critical for sustained development. The assignment of other responsibilities (such as involvement in consortial part80 library trends/summer 2004 nerships and regional and national change efforts) also needs to be shared so as to not overburden those in “established” leadership positions, as well as to provide opportunities for others to fully participate in the shared leadership system. A particular challenge comes from the hierarchical systems that surround a library choosing a shared leadership model and expectations that “the” leader, the one with the relevant title, attend external committee meetings or administrative councils. If not resisted, this pressure can add to the difficulty of sustaining the shared leadership model. Nominal membership with generous “back-up” attendance or actual delegation of responsibilities for external political appointments will strengthen the commitment to introduce and gain the benefits from a shared leadership model—wider learning, increased capacity, opportunity for self-development, and, ultimately, broader and deeper commitment to vision and goals. Developing a shared leadership system has enabled the UA Library to have major successes with a constantly decreasing base of staff resources and a steady base of financial resources. Staff-driven strategic planning and budget allocation, transformational change in the quality and efficiency of processes, and the current implementation of innovative technologies that support anywhere, anytime, tailored access to information are examples of successes of the shared leadership system. The Team System The primary goal of creating team systems as the basic organization of work is to increase organizational performance. Teams are “discrete units of performance, not a positive set of values” (Katzenbach & Smith, 1993, p. 21). This premise is often lost when discussing the current trend to organize work units into teams. Performance enhancement is gained by increased involvement, collaborative learning, challenging the quality of individual thinking, and discovering new realities. Mutual accountability is central to team performance. Katzenbach and Smith’s research revealed that where discipline, understanding, and practice in teamwork skills have been absent, teams have “failed” to produce new thinking or advance performance. Often when this occurred, team systems themselves were criticized. Most researchers find that the lack of understanding of what comprises a good team system, the lack of appropriate support and training, and the lack of performance expectations are the major contributors to failure (Katzenbach & Smith, 1993; see also Lencioni, 2002; Howard & Miller, 1994; Wheelan, 1999; and Yeatts & Hyten, 1998, among others, for the many challenges associated with building high performing teams). Where Katzenbach and Smith found high-performing teams, this definition applied: “A small number of people with complementary skills who are committed to a common purpose, performance goals, and approach for which they hold themselves mutually accountable” (Katzenbach & 81 phipps/system design approach Smith, 1993, p. 45). Trust, respect, interdependence, and collaboration define teamwork. When faced with the need to constantly improve organizational capability, teams give employees “opportunities to make independent decisions, collaborate, recognize and solve problems, and develop new approaches to accomplish tasks. Out of this process naturally come innovations that help the entire organization and its community thrive” ( Johnson & Johnson, 2003, p. 1). Viewing teamwork as a system that requires discipline, structure, and training in interpersonal and group process skills that result in high performance helps facilitate the results expected. Significant performance challenges can energize teams regardless of where they are in an organization. Organizational leaders can best foster team performance by building a strong performance ethic rather than by establishing a team-promoting environment alone. Biases toward individualism exist but need not get in the way of team performance. Discipline—both with the team and across the organization—creates the conditions for high team performance (Katzenbach & Smith, 1993, pp. 12–14). Methods for Creating the System Creating a team system requires the creation of performance goals and an accountability system, as well as the redesign of work units around related processes. After adopting the key principle of customer centeredness, the UA Library chose to organize teams as much as possible around specific customer groups that had “needs” in common. By organizing around customer groups (existing colleges, undergraduates, and staff), teams adopted the performance challenge of assessing and responding to new needs of their assigned customer groups. As customers’ needs changed, the teams would need to change processes, develop innovative services, adopt new technology, or redesign work to improve quality. Some teams, however, remained organized around work processes that resulted in services to all customers. The performance challenge for these teams was to discover the capabilities of their processes and engage in continuous improvement. They also had to assess whether the processes they managed were still relevant and value added. As customer needs changed, these teams transformed and acquired ownership for new processes. As the UA Library moved from a hierarchical departmental structure to a team system, many steps were involved. System-wide design and description of teams was accomplished by two sets of cross-functional “design” teams. Recruitment and appointment of team leaders, with the newly developed role of “facilitative leadership,” was accomplished by a cross-functionally elected selection team, which practiced consensus decision-making, a key to team system success. The new team leader group, using a Knowledge, Skills, Abilities, and Interest (KSAI) Inventory completed by each staff member, assigned staff to the new teams. Development of team missions, visions, and customer identification followed. Identification of subunits of work around 82 library trends/summer 2004 which to organize teams and work teams was decided by each team. Lastly, team leaders facilitated the setting of team and individual goals. As Katzenbach and Smith make very clear, clarity of purpose, explicit performance expectation, the utilization of good data gathering and analysis techniques, group meeting management, and planning and decisionmaking skills are key to the success of teams. Permanent teams review their mission, vision, processes, and quality standards (measurable goals) annually. Teams’ goals are reviewed for alignment with the library-wide strategic plan, as well as customers’ expressed and unexpressed present and future needs. Teams should focus primarily on discovering what customers will need in the future. “The fact is that the customer expects only what you and your competitor have led him to expect. He is a rapid learner” (Deming, 1994, p. 7). Managing the present processes, planning for the future, and evaluating performance become the team’s focus. While permanent teams have mission and goal frameworks within which they plan their annual work, cross-functional project or study teams are given a clear charge explaining their purpose, the problem or opportunity, parameters, products/outcomes, resources, suggested approaches, reporting relationships, roles, and timeframe (milestones and deadlines). Skills and knowledge required for the team to be successful are included in the charge and guide the appointment process. All teams are coached to focus first on outcomes for customers, using data (not the opinions of “internal experts”), benchmarking, gathering information, engaging in dialogue, and seeking feedback. Before implementing decisions, piloting or testing their validity is advised. Successful teams base decisions on research and learning rather than on groupthink or quick agreement on what might constitute good practice. All teams receive facilitated team-building in which the charge is reviewed for mutual understanding; team members share what skills, experience, level of commitment, and interest they bring to the team’s work; ground rules or norms for team behavior are developed; meeting management techniques are reviewed; and project planning tools are presented. Depending on the type of team and experience of team members, training in the use of quality tools, assessment techniques, consensus decision-making steps, or other group process approaches is also provided. The commitment to performance is reinforced through the involvement of all members of the team in either developing the team mission, vision, and goals (in a functional team) or reviewing and questioning and coming to shared agreement about the charge (in a cross-functional team). Teams report progress regularly to the whole library, and the Cabinet leadership group is charged with supporting their success. Changes in deadlines, direction, and/or resource support are negotiated if needed, but teams are encouraged to find ways to accomplish the desired result and live up to the “performance challenge.” As Katzenbach and Smith predict, teams 83 phipps/system design approach that follow good practice and receive adequate training are largely successful. Many teams at the UA Library have developed innovations that are now benchmarked by other academic libraries. Others have designed and implemented leading-edge systems and award-winning services. Challenges and Learnings In their research on hundreds of organizations, Katzenbach and Smith found that, although the power of teams was understood as making a difference in performance, most people “did not apply what they already knew about teams in any disciplined way and thereby miss the performance potential” (1993, p. 12). They point to the primary sources of people’s reluctance about teams and potential causes of team failure: 1. Lack of conviction—Belief that teams will waste time, that meetings are destined to be unproductive, that people cannot work well together without hierarchical control, and that empowerment is dangerous contributes to this cause of failure. Lack of conviction leads to lack of training or only superficial implementation of team systems. Teams are not wholly empowered with decision-making authority or given a wide berth for discovering creative and new solutions. A true performance challenge is lacking. Teams also are not given clear goals and timelines, which leads to a lack of productivity. 2. Personal discomfort and risk—Risk, personal discomfort, and conflict are some of the feelings associated with teamwork. Many people are unskilled in how to interrelate with others; some prefer to work alone. Others are wary of the requirement to commit to the work entailed in coming up with a new solution or a different, expected outcome. Others fear the reliance on others’ contributions for achieving success. One of the biggest barriers to teamwork is our cultural value of individual performance, responsibility, and reward. 3. Weak organizational performance ethics—Where leadership lacks the ability to demand organizational performance and accountability, teamwork will not be able to be successful. Where politics and not performance are the ways in which people are promoted, rewarded, or recognized, the openness, trust, and commitment to mutual accountability needed for team success is not present. Team promotion is not enough to sustain a team system. Emphasis on and expectations for outcomes, results, innovations, and learning are essential to a successful team system. There have been many challenges involved in designing, developing, and supporting the team system at the UA Library. The amount of learning needed to be successful, as described above, is substantial and ongoing. As teams change membership and as new leaders are appointed, sustaining the skills and practices becomes difficult. A programmable approach to the basics was initially successful, but a just-in-time facilitated approach became the more successful method over time (Diaz & Phipps, 1998). 84 library trends/summer 2004 Organization of teams by customer groups predetermines that some teams will share ownership for similar processes. Team boundaries negatively affect the goal of team learning as teams tend to isolate and work in silos. Communication strategies need to be developed that allow for sharing data, experience, and analysis across teams (see below in the section on communication). Working together to accomplish team planning, assessment of progress, problem-solving, and critical decision-making is contrary to the embedded culture of “managerial control.” For those learning facilitative leadership skills, the time required to accomplish real involvement and develop shared accountability becomes a major challenge. Supporting team members to participate fully requires the development of trust and the true delegation of power to the team. Facilitation skills are needed to focus meetings and save time. Accountability for mutual support of learning as well as accountability for improved customer service must be structured into the performance system that supports a team system (see the section on performance below). As Kotter points out, “convincing evidence that all the effort is paying off” is critical to the change process (Kotter, 1996, p. 119). The tension between learning and performing must be managed carefully so that each keeps pace with the desired results—building capacity and improving outcomes for customers—in the short and the long term. One of the major challenges for librarians involved in creating team systems is the counterculture of “professionalism” (Lakos & Phipps, 2004). The professional education system has created a structure that shapes graduates into individual professionals, preparing them for organizational systems in which they are rewarded for individual expertise and individual continuing education based on formalized, externally based learning. The team systems approach highly values collaborative learning that comes from shared experience on the job. The team system aligns individual goals to the needs and goals of the team and requires sharing; opening oneself up to change and influence; and engaging in giving and receiving honest, constructive feedback from peers. As such, the team system is not very compatible with the current hierarchical model found in most libraries. The “command and control” organizational model militates against the success of team systems. The internally focused supervisory structure, in which single managers decide on unit priorities and organization of tasks, is strongly embedded in our work culture and is contrary to the externally focused, customer-driven model of accountability (Cullen, 1998). As turnover occurs, recruiting new members to a team-based organization needs to take into account that preference for and the ability to work in teams will greatly increase the success of new employees. Job descriptions that stress qualifications of individual expertise and formal education, years of experience, and interpersonal skills useful in a hierarchy need to be changed as teams engage in recruitment and selection of new members. The difficul85 phipps/system design approach ties of projecting what skills will be needed in the team system, as well as the ability to screen for teamwork skills, can result in hiring members who do not have similar values nor the ability for collaborative work and learning. As new members join, a concerted effort to acculturate them to the team systems approach is necessary. Why the organization has chosen a team systems strategy should be fully explained, followed by training in teamwork skills. As the team system develops and becomes more successful and leaders practice facilitative leadership, new members, appropriately hired for teamwork skills, commitment to personal mastery, and a preference for collaborative work in a learning environment, as well as the opportunity to engage in shared leadership, can quickly contribute to the team’s success. Orchestrating all of these factors, given the cultural pull of hierarchy and individual professionalism, is a major hurdle to implementing team systems. The development of other infrastructure systems is critical to the successful development of team systems. The Planning System Developing a system for envisioning, planning, and taking organizational strategic action to assure future success is a requirement for any organization that foresees a need for its core services in the future. A strategic planning system that defines a common destination, sets direction, and involves members in taking action is the ideal system for surviving in a rapidly changing environment. Too many planning systems fail to provide strategic direction, become outdated quickly, and stop short of action planning and continuous review. Hoshin planning, a system that incorporates Total Quality Management principles, is a model worth investigating for implementation in a shared leadership and team systems–based organization. Derived from the Japanese phrase Hoshin Kanri—Hoshin meaning shining metal compass or pointing direction and Kanri meaning management or policy (Bechtell, 1995, p. 17), Hoshin planning focuses and aligns the organization to achieve the highest quality for customers by conducting continuous improvement mechanisms and involving groups in the discovery of innovative breakthroughs. By focusing on the few vital goals that must be accomplished for long-range future success and deploying human and financial resources strategically to accomplish the actions necessary to reach these goals, the planning process guides the choices to invest in future value for customers and build the capacity necessary for that success. Linking staff actions to future priorities leads to the success of this planning system. “Hoshin planning is not a strategic planning tool; it is an execution tool. . . . It translates the strategic intent into the required day-to-day behavior” (Bechtell, 1995, pp. 17–18). Collective strategy and action planning, gained through a “catch-ball” approach of successive team involvement and extensive communication across the organization, also 86 library trends/summer 2004 enhances success. The Hoshin approach also utilizes quality tools (affinity charts, force-field analysis, decision matrices, etc.) that support team management of planning and decision-making. Ongoing evaluation of progress facilitates learning and continuous improvement. Most libraries have been creating long-range planning documents for some time—setting annual priorities, assigning work, and managing individual performance in support of the administratively established goals. The Hoshin strategic planning system differs from this Management by Objectives (MBO) approach to planning. Management by Objectives planning is designed to manage individual performance and focuses on individual achievements. Hoshin calls for organizational problem-solving that leads to breakthroughs for customers and focuses on developing staff capabilities. Individual managers are responsible for MBO execution; teams, utilizing quality tools, research, and data, have the responsibility in Hoshin planning. MBO plans for and reviews short-term results; Hoshin planning aligns the organization to long-term directions and continuously reviews progress. MBO usually creates lists of goals for every department; Hoshin requires whole-organizational focus on the few critical strategies that will yield the greatest benefit and ensure competitive advantage (King, 1989). Methods for Creating the System Steps to follow when implementing this strategic planning system include: 1. Choosing the focus—Make the current state of the organization visible—include an assessment of customers’ future needs and the current process capabilities to succeed, as well as environmental forces that will affect both the suppliers of the organization, process capabilities of the organization, and customers’ and stakeholders’ “new” expectations. Define what the organization wants to be in the future and outline the vision direction. Identify what the organization needs to focus on to achieve its vision and goals. 2. Aligning the organization—Develop annual targets with clear measures of success. Develop clear means or strategies for how to achieve these targets. Communicate the targets and strategies throughout the organization. Finalize the threeto five-year plan. 3. Implementing the plan—Execute the plan by involving teams in action planning and assignment of responsibility for implementation. Monitor progress throughout the implementation. 4. Reviewing and improving—Diagnose and correct problems as soon as possible and at the level closest to the problem. Disseminate learning throughout the organization. Monitor and improve results, the plan, and the planning process. Recognize and celebrate progress (King, 1989, p. 17). Because involvement is key to successful strategic planning, it is best that a team representing different areas of the library be appointed and 87 phipps/system design approach trained in the Hoshin approach. Visioning as a community, developing the organizational values, widespread discussion of the need to focus on the future, seeking input to planning efforts, and training in the use of planning tools lead to the development of interest in , understanding of, and commitment to the resulting plan and strategies for action. The Hoshin planning system also requires that systems are in place to gather data and assess potential and actual customers now and in the future (see section on management information below). A natural outcome of utilizing the Hoshin approach is the reinforcement of the need for an external organizational focus. A current situation analysis helps staff recognize environmental influences and the effects on the library of changes in the larger systems of higher education, demographics, regional and global economics, and technology. The case for change should be embedded in the planning system. If staff conduct the planning processes and use quality tools, in addition to increased innovation, commitment is enhanced for taking on new work and moving in new directions. Challenges and Learnings Initially, Hoshin planning is time consuming. Alignment of the entire organization and focus on the few critical strategies are unfamiliar to those who have engaged in a MBO type of planning. In addition, this approach to planning requires the same culture changes associated with the team system and a shared leadership system. Hoshin is a methodology to deploy the voice of the customer along with breakthrough strategies; to control the means and methods, not just the results; to focus on continuous improvement, not a calendar-driven system; and to emphasize frequent reviews up and down the organization. Hoshin focuses on strategy management, not personnel performance appraisal. It is a methodology to manage change and to align and coordinate key business systems to achieve specific breakthrough targets (Bechtell, 1995, pp. 19–22). Collaborative planning has its challenges. Cocreating a clear and challenging vision and developing shared meaning about current reality may cause stress for those newly involved in shared leadership. “The key to more effective creativity . . . is creative tension, the tension between vision and reality” (Senge, 1990, p. 226). Staff have been acculturated to expect that “the leader” will provide a vision. Some leaders and some staff are reluctant to share this responsibility. Learning to gather information for a current situation analysis takes patience. Identifying, describing, and gaining agreement on terminology for the library’s mission and critical processes and agreeing on appropriate performance measures are new tasks for staff who formally were only involved in the actual Gemba processes such as reference, instruction, and collection development. Narrowing the focus of the plan to the “critical few” in order to maximize the allocation of resources is uncomfortable for an organization that has tried to do everything and serve everybody. In most organizations strategic planning starts with an estimation of budget. 88 library trends/summer 2004 Plans are limited to budget availability. In a Hoshin system, “budgetingto-plan” is the methodology followed. Ensuring commitment to the plan by maintaining continual involvement, engaging in dialogue, and giving feedback calls for a different use of organizational time. The steps in the Hoshin planning system are not foreign to libraries, however. Hayes concurs on the importance of alignment and integration of the three levels of management (strategic, tactical, and operational) (Hayes, 1993, p. 4). He points to the disadvantages of “generic” strategic planning as being that “it ties planning to what is currently known, and thus may fail adequately to recognize potentials that depart radically from present trends” (Hayes, 1993, p. 4). Hoshin planning, by involving all levels of the organization through the catch-ball method and involvement of teams, provides the “performance challenge” important to staff commitment in the team system and reinforces the shared leadership model that enables more information and diverse perspectives on the changing environment to influence the choice of breakthrough actions. The UA Library’s successful implementation of this planning system started simply, using existing data and the knowledge of staff. Gradually skills in environmental scanning, data collection, process description, and SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis were developed. Using the catch-ball approach, the Strategic Long Range Planning Team appoints action planning teams who appoint project implementation teams. All of these teams successfully use quality tools and process improvement steps (see section on process improvement below) to achieve better service for customers and reduce costs for the organization. The Communication System Once an organization has decided to implement a team system and support continuous learning, a communication system must be developed. Traditional, hierarchical communication systems are embedded in most organizational structures, and, since some of that hierarchy remains even in a flatter organization, a well-designed system of lateral communication is needed. One’s position in a hierarchical organization usually determines what information is received and with whom it is shared. In an organization that intends to develop shared vision and widespread commitment to change, and empower teams to discover, problem-solve, and make quality decisions, open, horizontal communication systems must be developed. In this type of organization, it is never clear what information may be relevant to the work a team is doing. Filtering, managing, and limiting the distribution of information simply will not enhance the work of the organization. The availability of key data, of events occurring in other teams on campus or in national arenas, can affect the quality of actions chosen or the success of implementation. Each team’s learning needs to be shared 89 phipps/system design approach with other teams for the spiral of deep learning to occur. Teams need to inquire of each other and be open to feedback. Dialogue, the process of openly engaging in advocacy and inquiry for the purpose of building understanding and developing new knowledge, is at the heart of an open communication system (Senge, 1990, p. 278). The communication system needs to provide space and time for interactive reflection, not just sharing of ideas. Members of the organization need opportunities to come together and share ideas, develop trusting relationships, and appreciate differences. Critical thinking must be encouraged in an open communication system. Senge differentiates between participative openness and reflective openness. “Reflective openness is based on skills, not just good intentions . . . recognizing ‘leaps of abstraction’ distinguishing espoused theory from theory in use, and becoming more aware of and responsible for what we are thinking and not saying” (Senge, 1990, p. 278). Methods for Creating the System To develop an open communication system leaders must choose to make all but confidential personnel information public and accessible. Designated leaders need to model open communication by sharing information they acquire or are sent because of their “position” in the organization. Reports from national bodies are freely shared on e-mail. Internal e-mail distribution needs to be unmonitored and encouraged for all topics that appear relevant to the organization. An internal reporting structure or management information system needs to be developed that allows for the sharing of performance data, team thinking, and organizational learning. At the UA Library, each team reports to the library three to four times per year. A full report of annual team goals, progress, and knowledge gained is sent to the all-staff listserv, and a presentation is made at an open meeting. The Cabinet and Strategic Long Range Planning Team (SLRP) attend with as many representatives from every team as possible. After the reports, there is a scheduled dialogue session, where there are questions and additional sharing of ideas on topics important to the group making the reports and to the library as a whole. All action minutes of all team meetings are organized on a shared drive and open to review by the whole library. “Public” calendars account for work schedules. All budget information, pending or actual, is shared with the entire library. The dean of libraries holds all-staff meetings to inform staff of the legislative and campus allocation strategies as they materialize. As the SLRP and Cabinet make budget allocation decisions, the results are promulgated throughout the library. Group budget meetings displaying the whole budget picture are held monthly between the accountants and the team leaders, and between the Information Resource Council and the librarians who are information resources managers. All teams’ expenditures are tracked publicly; any requests for funds are put on the Cabinet agenda for all to see ahead of time and have input into the Cabinet’s decisions. 90 library trends/summer 2004 Challenges and Learnings Without the vertical filtering of information, there is a need for a new “system” of screening. In a flat communication structure this becomes the responsibility of both sender and receiver, but the burden more often falls on the receiver—to review, attend to, and actively pursue. Attendance at open meetings is a personal decision, as is the reading of meeting minutes. Staff need to learn when and when not to hit the “delete” key. Senders are challenged to better label their e-mails, synthesize without filtering, and summarize without missing key information. Preparation for open meetings, reading the e-mailed reports, can increase the quality of the dialogue but requires additional reflection time. The etiquette of e-mail communication is another challenge. When to respond on e-mail, a one-way system that lacks the ease of checking out one’s thinking or the ability to inquire about context or underlying assumptions or points of view, becomes yet another challenge that can lead to unintended conflict. Many staff feel overwhelmed by the amount of information and the responsibility of processing what is happening in the whole organization, to understand the larger system issues. Learning to participate in dialogue, to offer ideas, to challenge another’s and one’s own thinking, and to inquire about assumptions and openly question one’s own takes practice. Learning to think and reflect on topics beyond one’s assignments and to contribute to the learning of the whole is challenging. Those who enjoy it and develop the necessary skills have the additional challenge of finding balance between their assignments and attendance at open sessions. Schedule management is a necessary skill. Additionally, attempts to increase informal communication by clustering workers in open carrels has both upsides and downsides. Such an arrangement challenges those with a need for privacy or a need for selective times to communicate. It can foster the development of more informal, sharing relationships, however, that expand connection, learning, and teamwork. If the organization is going to broaden and deepen its capacity to respond to the need to change, an open communication system needs to be designed to encourage involvement and learning. The Process Improvement System A process improvement system is a research system that supports the organization’s ability to assess what customers value, to analyze performance, and to use the analysis to make improvements. Process improvement is one of the key concepts of Total Quality Management. “When we engage in true process improvement, we seek to learn what causes things to happen in a process and to use this knowledge to reduce variation, remove activities that contribute no value to the product or service produced, and improve customer satisfaction . . . .The ideal outcome is that jobs can be done more cheaply, more quickly, more easily, and . . . more safely” (Bauer, Duffy, & Westcott, 2002, p. 67). Process improvement can be applied to Gemba and non-Gemba processes in an organization. 91 phipps/system design approach Walter Shewhart is credited with developing the basic approach to process improvement in the 1920s in his work at the Western Electric Company. He recognized the need to understand what was happening in a process, to devise a way to recognize the different types of mistakes that caused undesirable outcomes, and to design improvements that eliminated mistakes, based on their type. He also recognized that all processes contained natural variation attributable to common causes. Other variation could be attributable to special causes. Basically, he noted that in our attempts to solve problems associated with a process, we make two mistakes: “To react to an outcome as if it came from a special cause, when actually it came from common causes of variation . . . .and to treat an outcome as if it came from common causes of variation, when actually it came from a special cause” (Deming, 1994, p. 174). Understanding variation is key to a systems approach to designing organizations and to distinguishing between process and personal performance problems. “Most variation in our organizations is common cause variation built right into the system. But it is a common, though misguided, managerial reflex to regard anything that goes wrong as a special cause attributable to a person” (Scholtes, 1998, p. 27). Process improvement is key to overall performance improvement. “To increase customer satisfaction with a product or service, an organization must first discover the origins of variation by collecting and analyzing process information. Then, based on the knowledge gained from this study, the organization must develop and implement appropriate actions to eliminate, or at least significantly reduce process variation” (Bothe, 2003, p. 54). Scholtes identifies “The ability to understand the variability of work in planning and problem solving” as one of the “new leadership competencies” (Scholtes, 1998, p. 21). Developing an organizational system where this competency resides within the staff can ensure that continuous learning and continuous improvement result in organizational effectiveness. Methods for Creating the System Understanding work as a process or a set of activities is a first priority if an organization is going to focus on improving quality and containing costs. Mapping all work processes will help employees understand the relationship of assigned or chosen tasks to the results they are designed to accomplish and enable them to engage in the performance challenge of maximizing the capability of the process to produce quality outcomes for customers. The mapping process is followed by a research process. Research consists, essentially, of stating questions or problems clearly, making observations that are relevant to the problems, analyzing and describing the observations, and interpreting the results of the analyses as they relate to the particular question or problem. Any question or problem for which it is possible to make relevant observations that will assist in the question or clarifying the problem can be made the basis of a research study (Edwards, 1969, p. 18). 92 library trends/summer 2004 Following this basic definition of research, early quality practitioners designed the steps involved in studying organizational processes. Over the fifty years that such study methods have evolved, little variation has developed in the recommended methods. For many this “process improvement” system is simply a problem-solving system that recognizes that most problems in an organization can be attributed to a process, and specifically to process variation. By following a methodology and creating a process improvement system, it is possible to “observe and analyze the workplace” to see who is doing what and why . . . and learn to standardize everyday work, and remove waste (complexity and bureaucracy) from the workplace (Scholtes, 1998, p. 96). Before detailing this methodology, it is important to point out that similar study processes are included in a systems analysis. The main difference is that one research focus is on the process and the other is on the technical systems that are designed to support the process. A combination of the two is recommended in this technological environment. Process Improvement Steps Below are the common steps advocated by different individuals. See Barkley & Saylor (2001), Bauer, Duffy, and Westcott (2002), Phipps (2001), and Bothe (2003) for various descriptions of steps involved in process improvement. See Scholtes (1998, chap. 4) for an in-depth discussion of how to approach the steps. 1. Define the problem(s); develop a clear problem statement from the customer or cost point of view.—Is wait time from request to availability for reserve readings too long? Are faculty and students frustrated by the delay? Is the cost of processing non-Roman language monographs limiting our ability to provide access to these materials? In order to define the problem, you must begin by understanding whether customers are satisfied with the outcome they receive or whether a cost/benefit concern is the context. Measuring customer value will be the first step in defining the problem. Developing cost information will provide additional context (see step 3 below). How the problem is defined will guide how potential solutions are developed. Problem definition also determines where and how improvement is measured. 2. Map the current process and learn about all tasks involved, in what order they are accomplished, and whether there is variation among staff in how the tasks are ordered.—Develop a flow chart, at first at the macro level. Discover the basic tasks involved in completing the final product or delivering the service. Start with the outcomes or outputs and work backwards if several kinds of outputs are involved. 3. Collect data on the current process; gather all information that will yield information on customer and process requirements and the current capability of the process in meeting these requirements.—Collect information regarding numbers of staff, volume of outputs, staffing levels involved, turnaround time, reliability of equipment used, estimated costs of accomplishing the steps, numbers of defects or errors, etc. 93 phipps/system design approach 4. Discover variation in the process; hypothesize the causes of “gaps” between current process capability and customer expectations.—Gather data on the process that relates to customers’ concerns—time, quality, cost, etc. Plot the data on a statistical process control chart to graphically understand where the variation occurs, and discover whether it is within predictable variation limits or can be attributed to special causes. Discover the current process capability to meet customers’ desired level or quality of service or to produce the desired qualities in the products they receive. Look for the cause of the gap by using the data gathered, seeking opinions of staff involved and testing hypotheses. 5. Identify the root causes of problems in the process.—Conduct a root-cause analysis to discover why the variation is occurring or why there is a perceived gap in service quality. Select the most likely causes. The most common causes of process variation include work practices, training/ qualifications, work organization/planning, communications, resource allocation, change in management, and supervision (see a full list in Wilson & Pearson, 1995, pp. 111–112). Use a pareto chart to show the relative importance of the causes. Elimination of causes that are most prevalent can provide the most improvement to the process. 6. Brainstorm and test possible improvement actions.—Assess the effectiveness of the action. In this step, alternatives should be developed and piloted by those who have studied the process. Include in this step an examination of current potential technological solutions. Evaluate all ideas as to their ultimate impact on solving problems and delighting customers. Combine ideas, evaluate for cost, and assess potential training needs prior to choosing the most likely candidates for implementation. The “best ideas,” usually assessed for ease of implementation as well as impact, are combined and piloted. Improvements should also be “beta-tested” with customers to see if there is an increase in satisfaction. 7. Implement changes in the process that will lead to improvements for customers.—This is a crucial step in any process improvement. Remap the process, train staff in the new process, and establish how the new process will be measured. Prepare staff for the reasons for change. If they are involved in the study and trust the methodology, they are more likely to understand and embrace the need for change. Provide support for training and practice. Effective training will ultimately lead to success of the new process and eliminate the potential to abandon implementation and return to old work habits. Demonstrate the efficiency of the new process and share customer satisfaction with the changed “result” to gain commitment of the staff to follow the recommended changes. 8. Implement continuous process improvement.—Involve staff in continuous assessment, encourage continued data-gathering, and make process improvement the work of the team. Continue to develop the skills of all involved, so that their own motivation to do a good job, offer quality 94 library trends/summer 2004 service, develop their own skills and knowledge, and be appreciated by those they serve are maximized. Scholtes points out that “giving meaning, purpose, direction and focus to work” is a key role of leadership (Scholtes, 1998, p. 160). Ambiguity and uncertainty, unclear purpose and vision for the future are causes of lack of motivation in staff. Without a process improvement system, staff will feel powerless to control the quality of their work in a sustainable way. Individual efforts will last only as long as energy lasts, or an individual holds the ability to persuade others to achieve breakthrough thinking and embed them in how the organization accomplishes work. Challenges and Learnings Libraries have not embraced process improvement and could be said to have developed cultures where improvement is not a strategic focus. Libraries have been viewed as a public good and are referred to commonly as “the heart of the university.” Library work and how it is accomplished has been the “purview of practiced professionals in power” (my phrase). The need for research on how work in any organization is accomplished has been largely ignored until recently. Some early proponents of applying research methods to increase quality attempted to bring systems and quantitative analysis to academic libraries in the 1960s (Dougherty & Heinritz, 1966). These successful studies led to the creation of automated systems that increased the efficiency of technical services and circulation. Implementing automated systems became the focus for process mapping, for design of workflow, and for delivery of improved access. The creation of automated systems appears to have overtaken the many other applications, principles, and practices of Total Quality Management. It is only recently that process improvement and the gains it can provide an organization have been discovered as an important system to embed in the reengineered organization. In the mid-twentieth century, library culture consisted of an internal focus (Cullen, 1998), scarcity of resources, and a stable user population whose needs rarely changed. In addition, library education downplayed the need for research skills, and librarians developed a limited view of their work as unique and unrelated to the larger world of corporate and service institutions. With the advent of true competition and recognition that scarce resources can be reprioritized and reallocated to new enterprise initiatives, the development of process improvement systems can be advantageous. Customer demand has awakened the need for external focus. Libraries are now more interested in learning how to retain the value they add to the scholarly communication and education processes. This sets the stage for acceptance of process improvement as a key organizational system but, by no means, makes it easy to implement. The skills involved in process improvement are not present in most library organizations. Library schools have not taught this particular re95 phipps/system design approach search method. Faculty do not prepare students to understand library organizations as a set of processes that produce outcomes. Data-gathering and analysis is usually limited to one course in basic research methods. Statistical process control methods are seen as complex and undoable, even though simple applications are available. Process improvement initiatives require a commitment to learning that, if not sustained and supported, can lead to early abandonment of initial efforts. Efficient data-gathering methods are not well understood. Too much emphasis on the collection of large amounts of data can lead to exhaustion. The use of “triangulation” of data, simply collecting available or easily gathered data from several perspectives and using it to identify problems or root causes, is not appreciated. Some have acquired a surface knowledge of statistical methods and question this simplified approach. Living outside a culture of statistical research has led to an assumption that only major, timeconsuming, statistically validated methods tested for reliability can be used to “know” what problems exist. Process improvement calls for some data gathering, but is not seeking to prove hypotheses by data alone. Piloting of new processes, comparing results to previous methods, and checking with customers provides the evidence needed to know that improvement has occurred. In most cases when undertaking process improvement, the staff involved are not at all surprised by what the data show regarding problems in the process. The resulting analysis and changes can lead to obvious improvements in quality as well as clear reductions in cost. The concept of variation is not understood. Also, the concept that each professional has the right to accomplish her/his work in her/his own way, despite resulting in unacceptable variation, is prevalent. Professional and staff work habits have been passed down from generation to generation despite the fact that workers sense that there are better ways to accomplish things. Individual preference for approaches to work, schedules, and types of work have led to inefficiencies that no one wants to study for fear of losing independence and control over one’s work. The individual’s work preference takes precedence over the organization’s need for effectiveness and efficiency. Analysis of work processes feels like an evaluation of one’s work. Keeping the focus of the study on the process, and the systems and policies that keep that process in place, is a major challenge for those involved in any study. Assessment of customers’ needs is a very new concept in library organizations, although customer service has always been at the core of a library’s mission. Starting a study by discovering what current, potential, and future users might want can be met with resistance. The resistance can come from fear that customers will want service qualities that the library is unable to provide—because of skill deficits or scarcity of resources. Staff are committed to serving customers but can have conflicts about changing work processes that they believe work well enough. Staff also can fear that 96 library trends/summer 2004 the changed process will result in loss or elimination of interesting jobs. All of these can be true. Staff must be prepared to engage in process improvement with the ultimate aim of helping the library to achieve its mission in the face of competition; to reallocate resources to new value-added services and products; and to achieve the library’s vision in the face of threat to its values. Support for retraining and learning must be provided. Understanding the differing work requirements can lead to appreciation for the new work challenges: managing processes, analyzing systems, assessing need, and evaluating results are different but needed skills of librarians. The recognition of increased customer appreciation also provides incentives. Implementing a process improvement system will confirm a commitment to remain strategically relevant in an environment of changing customer expectations. The Performance Management System Increased performance is the goal of any organization. A performance management system needs to support the staff in achievement of personal goals and recognize the integral role of the individual’s performance as critical to organizational performance. A good system provides staff with feedback on how to improve and encourages continuous learning. Most organizations have created performance management systems that rely on individual performance appraisal as the means of managing performance. Scholtes shares his negative views of performance appraisal: “Companies use the rhetoric of humanism, but their policies and practices are often based on distrust, paternalism, and a none-too-subtle cynical disregard for their employees” (Scholtes, 1998, p. 294). He asserts that evaluation of a person who has little control over the results he achieves is a waste of time. He contends, with Deming, that “no more than 4%” of an organization’s problems can be attributed to workers’ errors. What workers need are a reliable set of systems, processes, and methods by which “to design, develop, and deliver what customers need, when, and how (they) need it” (Scholtes, 1998, p. 304). In an appraisal system, identification of heroes and culprits replaces interest in improving systems. Robert Mager and Peter Pipe (1970), in their groundbreaking work on analyzing performance problems, approach performance effectiveness management similarly. They propose that a “discrepancy” in performance and expectation be approached systematically by asking whether there is a “skill deficiency” or a “commitment issue” that is causing the “problem performance.” Each question leads to different strategies for changing performance. Assessment of skill issues leads to questions about the job training system, the frequency with which the task is accomplished, or alternative organization of work tasks. Redesign of work into simpler steps may be called for if complexity or disorganization are the problems. Commitment issues are investigated from the point of view of examining whether 97 phipps/system design approach performance is punishing (“do you get more if you do well?”), whether nonperformance is rewarded, or whether performance really matters (has a meaningful result). Mager and Pipe also advocate investigating what the obstacles to performance might be, that is, what in the system might be hindering a commitment to perform. Rothwell identifies lack of feedback on consequences as the most persistent cause of human performance problems. No timely feedback, lack of assigned responsibility, lack of timely information, lack of knowledge, lack of rewards for performing, and lack of information follow close behind (Rothwell, 1996, p. 160). As he points out, most of these issues can be traced back as problems in the performance management system and not problems with the individual employees. Senge points out the critical importance of dialogue and discussion in broadening team learning and supporting opportunities for self-motivation to influence performance. Ultimately, the reduction of defensiveness leads to natural creativity and innovation (Senge, 1990, p. 235–236). Providing the opportunity for conversations about library and team vision, mission, goals, and strategies and involving staff in setting performance standards from the customers’ viewpoint are some of the building blocks in a Performance Effectiveness Management System (PEMSystem) that will lead to improved organizational and personal performance. Methods for Creating the System When designing a system that supports performance effectiveness, Scholtes has several key recommendations: 1. Focus on outstanding performance—Understand this from a statistical point of view—as outside the norm that could be expected from the system. Is there data over time that would show somebody to be significantly higher (positive outstanding) or lower (negative outstanding) than an average performer? Analyze what is behind the occurrence. Recognize the new market value of positive, outstanding performers and teach their methods to others or give them more latitude in job definition. Coach and mentor negative outstanding performers; provide them learning opportunities, greater structure, or a more appropriate position. 2. Provide feedback to individual employees—Focus on being helpful and supportive to the person; recognize that helpfulness is dependent on how ready the person is to receive feedback. Look on feedback as part of a larger system of relationships within work groups. 3. Give direction and focus to the workforce—If your work unit has clearly established and agreed upon directions, then everyone will know what to strive for. Create communication about mission, vision, values, and goals; share data about progress and utilize process improvement techniques to naturally support people’s work toward certain goals. Be clear about individual work focus. 4. Provide moral support at a personal level for individual employees’ career goals— 98 library trends/summer 2004 Provide ways for employees to assess, receive mentoring, and take advantage of personal motivation to fulfill career ambitions. 5. Be clear about career ladders and provide opportunities for people to choose to move forward—Keep people informed of the present systems and requirements. 6. Identify education and training needs—Be clear about needs for training on work processes and systems, individually focused training, and more general education and development of knowledge that can be applied flexibly. 7. Identify candidates for promotion or provide more leadership opportunities—Remove personal appraisal and subjectivity as much as possible from the promotion system or appointment to leadership responsibilities. 8. Foster communication between employees and their supervisors—In the team environment, communication should regularly take place among the members of the team about the progress they are making toward the team’s agreed upon goals, not just with supervisors. 9. If employees are unmotivated, investigate what happened or is happening to reduce their motivation—Recognize problems that may be affecting their work—personal or on the job, transitory or chronic—and see what can be done to help (Scholtes, 1998, pp. 328–357). When designing the performance system in the team-based, learning organization culture, the UA Library formed a team to study best practices. The resulting Performance Effectiveness Management System (PEMS) aligns library, team, and individual goals, includes personal and team involvement in setting team and individual goals and quality standards (performance targets), integrates peer feedback and support for learning, and requires self-accountability for communicating progress as well as seeking help to solve problems when they are encountered (see Phipps, 1999). By adding the OD consultant specializing in compensation to the team, aligned principles formed the basis for both systems. Charles McClure provided guidance in the development of the full PEMSystem, as did MetaWest, Inc., local consultants who guided the learning process for team leaders.2 The PEMSystem aligns each team’s strategic framework (team mission, vision, mission critical processes, and quality standards for each process) with the library-wide 3–5 Year Strategic Plan and calls for each team member to write performance and learning goals in line with the team’s plans. It also includes an assessment of competencies that will be needed in the team in the future. This list drives the creation of learning goals. A series of peer developmental reviews is scheduled every four to five months. Staff share their self-assessment of progress toward goals; recognition, support, and suggestions for improvement are provided by peers. A summary is then provided to the team leader. Three peer feedback meetings are aimed at increasing the success of the individual 99 phipps/system design approach by providing timely feedback and suggestions for overcoming obstacles that inevitably develop. Similar constructive feedback to teams on their strategic frameworks and progress toward quality standards is part of the three-month Team Report schedule. Challenges and Learnings The PEMSystem took almost three years to design and fully implement. Describing work done by teams as “processes” was brand new. Performance measures were unfamiliar and difficult to describe. Open assessment was a major culture change. Formerly, there was a focus on position, status, and specific assignments for work but little emphasis on what was to be achieved. The new focus on team and individual accountability required much conversation, practice time, and continual learning. The new and different terminology presented barriers. The new requirement to openly examine the results of work—outputs, outcomes, and quality—brought up predictable concerns (similar to those mentioned by Deming and Scholtes) of whether and when performance is under an individual’s control or when systems of work we have created may be contributing to the problem. For the team, performance management, data-gathering, and analysis skills proved difficult to learn. Many initial “learning goals” focused on developing these skills so that meaningful assessment could occur. Staff involvement in the setting of team and individual goals was new. With the implementation of PEMSystem, individual accountability for openly sharing goals and progress with peers ran contrary to previous experience in the hierarchical culture. Old memories of the evaluative nature of reviews inhibited people from participating fully and using the system to learn, gain support, and improve. In addition, the campus system still requires an annual rating, although the library has successfully negotiated a basic rating of “Satisfactory” or “Unsatisfactory” as the minimum requirement for a “performance appraisal.” Merit evaluation is separately accomplished through the Career Progression/Merit System (see section on compensation below). Overall the PEMSystem has accomplished what it set out to do. Individuals can clearly articulate their goals, identify milestones, and report progress. Teams and cross-team peers are much more aware of each others’ work responsibilities, and a large measure of support and recognition occurs in the developmental reviews and in the Team Report Sessions. The language of the organization is one of assessment and measurement—indicating a successful culture change to external focus on the needs of customers and the importance of caring and knowing whether intended results are occurring. Teams have become fairly adept at creating team strategic frameworks, including all the work processes for which they are responsible. “Stretch” quality standards are accepted as the appropriate approach to guiding continuous process improvement and forcing creative thinking and innovative approaches. 100 library trends/summer 2004 Challenges still exist in discovering and defining the right measures. Integration of the Balanced Scorecard (Kaplan & Norton, 1996) approach is slow but steady. Sometimes data are not easily obtainable; other times it is difficult to know how to assess outcomes of service or learning processes. Nonetheless, experimentation has led to a vast amount of learning, and the PEMSystem is robust and deeply embedded in the culture of the organization. The development of this system has made the need for a data management system and a budgeting system that provides cost center data very clear. The PEMSystem aligns well with learning organization disciplines. It emphasizes personal mastery (a clear system for setting and receiving feedback on personal goals), team learning (team assessment of needs, planning of projects, monitoring results, and dialoguing about better ways to serve customers), and systems thinking (team reports include librarywide dialogue to increase the awareness of the need for whole-organization understanding and analysis). Each year, as all individuals engage in reflecting on their customers’ needs, the library’s strategic goals, their team standards, and their own performance and learning goals, shared vision develops more easily. But there are still questions. A recent climate survey conducted with the librarians indicated some dissatisfaction with the PEMSystem, although the cause of the dissatisfaction was not pinpointed. An assessment is planned, but this is a strong indication of the difficulty in implementing a performance management system, as predicted by Deming and Scholtes, even though the PEMSystem was intentionally designed to eliminate the negative aspects of performance appraisal. Open discussions of performance, requirements to align personal and organizational goals, requirements for measurement, and an expectation of self-accountability involve a major culture change (see Lakos and Phipps, 2004). Some still desire to have goals set and reviews conducted privately by a team leader— what Katzenbach and Smith refer to as reliance on the “political” process for rewards and recognition (Katzenbach & Smith, 1993, p. 24). In the larger profession, struggles persist to find meaningful outcome measures for which data can easily be collected. It is clear, however, that without the PEMSystem it would be impossible to answer the inevitable question, “How do we know that the team system is a better approach to accomplishing work?” Time and time again that question is asked, and results can be provided—reductions in cycle time, increases in quality (accuracy, availability, approachability), reductions in cost, and evidence of learning outcomes can be provided by all teams in the library to an ever-increasing extent. The Compensation System The main goal of a compensation system is “to provide just compensation for work, to allow people to sustain themselves in a decent manner with reasonable security (and) to retain qualified employees” (Scholtes, 101 phipps/system design approach 1998, p. 330). According to Lawler, organizations can also look to their pay systems as a performance motivator if they are well-designed to reward valueadded performance and the development of new competencies (Lawler, 1996, pp. 195–196). Historically, there are many factors on which to base a compensation system: pay for years of service, pay for positional power or supervisory span of control, pay for expertise brought to the position, pay for comparative market value of similar positions, pay for performance, and/or pay for skill and knowledge. Most systems combine several of these approaches. When designing a compensation system, it is important to align the principles of the system with organizational values. At the 2001 U.S. Office of Personnel Management Strategic Compensation Conference, the following were identified as objectives of a good compensation system: external competitiveness to recruit and retain; reward for skill acquisition; reward for performance through salary without grade promotions; internal equity among employees; pay for the person rather than the job; built-in controls and cost constraints; an understandable and equitable system; parallel career paths for managers and technical employees; flexibility to adapt quickly to market changes; and management flexibility to assign a range of duties (U.S. Government Office of Personnel Management, 2001). Without clarity of a systems approach to compensation, employees are unsure of the reasoning behind pay differentials in the organization and morale can be affected. When viewed as part of an overall reward system, it becomes clear that, if pay is going to be used to provide incentive for joining or remaining in the organization or focusing one’s efforts on institutional priorities, its foundational principles ought to be made explicit. In today’s multigenerational and highly technological workplace, where needed skills are often brought to the organization by newer staff or learned on the job, a system of pay for performance and learning would seem to align better with organizational goals and a dynamic environment of change than a system based solely on seniority. Also, pay that follows value-added participation, rather than positional power, is better integrated with a team systems approach. Although much research in the field of motivation has concluded that pay systems are only a source of dissatisfaction and cannot motivate employees, Lawler’s research leads to a different theory. “My research showed a poor relationship between pay and performance. But it did find that when pay is based on performance, it can be a powerful motivator” (Lawler, 1996, p. 195). He attributes his first conclusion to the historical nature of most pay systems, which focus on job classifications, not individual performance. He also found that rewards had a major impact on the skills that individuals developed when the pay system focused on the worth of the individual employee rather than the worth of the position held. If the new team-based approach is to work, it is critical that the pay system reward people not for their position in the hierarchy but for working for the team and the strategic goals of the organization. If the compensation 102 library trends/summer 2004 system is to support the development of organizational competencies and capabilities, it would • Focus on an individual’s skills and competencies (rather than his or her job) • Be tied to the organization’s performance in ways that support its strategy and structure • Support the organization’s architecture (Lawler, 1996, pp. 194–218). Unionization and a strong cultural tradition of seniority and hierarchical pay structures may limit the flexibility the organization has in designing a pay system in alignment with strategic directions and needs, but every effort should be applied to rationalizing the compensation system to achieve desired results. Methods for Creating the System Market-based compensation may be the best starting point for creating a compensation system that enables the organization to attract the necessary talent and skills to accomplish strategic goals, but market comparisons are tricky. Although local and national market comparisons can provide data to help design beginning salary ranges, these comparisons are based on generic job evaluations and do not take into account the cross-functional nature of teamwork, “where individuals are expected to work in teams, to do what is needed rather than what is prescribed, to manage themselves, and to make horizontal career moves” (Lawler, 1996, p. 201). They also do not reflect the market value of an individual whose skills and contribution may encompass more than the job requires. External benchmarking of comparable pay for skills, although difficult, would be a better approach. Instead of describing work in terms of elements, tasks, and duties, work is beginning to be defined in terms of roles and competencies. “Roles refer to expected patterns of behavior for people (Naylor, Pritchard, & Ilgen, 1980); competencies refer to knowledge, skills, abilities, and other attributes of people related to effective job performance (Heneman & Ledford, 1998)” (Heneman, Ledford, & Gresham, 2000, p. 204). Gross comparisons of similar titles in similar institutions fall short of this measure of a good market-based approach. Assessing pay for technological and team skills in the competitive marketplace appears to make more sense as library jobs become more engaged in understanding, utilizing, and integrating technological systems and more dependent on teamwork skills to accomplish strategic goals. Utilizing a “retention raise” approach can provide opportunities to keep key people who have developed the skills needed for strategic work and whose market value is evident from new job offers. This strategy has been selectively used at the UA Library, and a recent study showed that the extra investment did not result in the desired retention over the long term. Short-term results appear positive—allowing the library to retain key competencies for current proj103 phipps/system design approach ects. Any “retention raise” strategy needs to be designed to operate within the general compensation system principles. In addition to market-driven approaches, cost-of-living adjustments (COLA) and merit awards need to be decided. Indexing cost-of-living increases to local or national figures is one approach to avoiding “losses” in actual compensation. Creation of a merit system calls for critical decisions regarding the basis for reward. What type of performance or what amount of loyalty is critical to retaining an appropriately skilled and committed workforce? What performance is critical to the future? How will it be measured? Keying the merit approach to the values and strategic goals of the organization will increase and strengthen overall system alignment. At the UA Library the Career Progression/Merit System (CP/M), designed by an internal OD consultant with the involvement of faculty and staff and in line with the PEMSystem, rewards overall high performance, demonstrated commitment to organizational values, and the application of new learning. Learning is the most important factor since the willingness and ability to learn and apply new skills is viewed as critical to future success. Candidates for CP/M self-identify and must show evidence that the application of new learning resulted in a positive outcome for customers. Team input must be sought on the personal decision to apply, support from at least three peers must be gained, and a positive decision rendered by a final Library-wide Peer Review.3 Often the library compensation system has to fit into a larger campus system. Approaching classification from the broad-banding perspective can help where there is a need for flexible work expectations within the team structure. Broad-banding reduces employee reluctance to take on new opportunities for learning and is easier to manage than a complex pay grade system. Controlling pay costs within a broadband system is more challenging, and a well-developed performance management system is an important adjunct (Heneman, Ledford, & Gresham, 2000, p. 211). Movement within the broadband is usually premised on the acquisition of new skills that contribute to the overall competence of the library. Organizations with faculty ranks must find a way to utilize the promotions in line with the overall compensation strategy. Promotion criteria are often culturally determined if they are part of a larger system (faculty, professional, or career/support staff) and may or may not be keyed to the need for building and rewarding strategic competence in the library. Ray refers to some of the problems inherent in relying solely on these systems for classified staff: “Promotional ladders in the state (staff classification) system are short, where they exist. For most employees, promotion is not often available as an option” (Ray, 2004, pp. 124). The library must develop a compensation system that is flexible, timely, and appropriate to the needs of employees, as well as the goals and constraints of the organization. In104 library trends/summer 2004 grade increases in salary that reward increased competence and performance are more complementary to a team systems approach. Challenges and Learning Changing an embedded compensation system is extremely difficult. As employees engage in systems changes, they expect a reward for participating more broadly and deeply in the important work of the whole organization. Narrow classification definitions, based on taskbased job descriptions and faculty ranks that reward seniority, can divide and confuse the staff as to the real priorities for their attention. If Lawler is correct that pay can have an influence on motivation, the pay system can be used to guide performance by making clear and visible what type of performance and what depth of learning are expected. Benchmarking in a pay for skill and performance system is a complex task. Rarely are there truly “equivalent” library staff position classifications even among similar libraries, and individuals in these positions bring varying overall skills to the strategic work of the library. Each system has been developed within and politically shaped by a campus system where there is usually little knowledge of the intellectual and technical nature of library work. In addition, job and skill requirements have changed drastically in the past ten years, and classification systems—and their compensation appropriation—have not often kept up with the newly required levels of competence. Monitoring recruitment patterns, noting skills that competitive institutions require, is one way of recognizing market changes. Recent research into the Association of Research Libraries (ARL) Salary Survey by the Association of College and Research Libraries (ACRL) Personnel and Staff Development Discussion Group unearthed many problems related to noncomparative data collection by contributing libraries and resulted in some informal recommendations. I hypothesize that the reliance on comparisons within the profession, such as the ARL peer approach, has probably been detrimental in the long term. The sociotechnical work in the library has become more complex, and the true worth of library professionals is now being recognized by corporations who compete for the best master in library science (MLS) graduates. This latter trend can be a positive driver for utilizing a more accurate, external, market-driven approach to salary setting. Gaining the permission of campus administration and the support of the campus human resources office to design and implement a different merit system is often a major challenge. Sharing the goals of the proposed compensation with human resource specialists and gaining their approval, in principle, is critical. The UA Human Resources Office had already developed a Career Progression System for rewarding “in-classification” acquisition and use of new skills. Adopting the tenets of this system as part of the annual award of merit was therefore accepted by the campus, even though other units still use a performance rating scheme. Previous acceptance of the library’s team system led to acceptance of the peer decision-making 105 phipps/system design approach process that drives decisions for merit. Funding the CP/M system required a commitment to allocate merit each year, with a substantial increase to base salary of $1,500–2,000, regardless of position classification or leadership status. Without this equitable approach and meaningful amount, the requirements of the system to self-identify, write an application, and seek peer support might reduce the feeling of “reward” and result in fewer applications. It is assumed that a majority of staff will apply for this substantial raise within a three-year period. Multiple rewards favor those most involved in new learning, an activity valued highly as work changes radically. Constant assessment of the impact of this merit approach on the total compensation is required. Increased overall retention provides one indicator of success. This system does require constant education of the staff, and there are many who would prefer a simple seniority-based system, despite the strategic nature of this new approach. The CP/M system also involves a major culture change that brings new challenges—for example, writing skills are not always up to the level required; and peer pressure sometimes results in “signature” support even though evidence is slight. Also, the peer review committee process is time intensive and onerous to some. Adjustments to the system have included the opportunity for verbal interviews with candidates where writing clarity is lacking, the opportunity for the peer review committee to interview peer signatories, and increased education of the staff on the criteria for application, which can reduce the peer review committee time. In his assessment of the UA Career Progression approach to merit and its impact on changing the compressed (and low) nature of the salary system for a particular group, Ray asks, “Has Career Progression effectively changed the salary profile for employees in this (the Library Specialist Classified Staff) position? Keeping in mind the impact of cost of living adjustments, reclassifications and promotions, the answer is a definite yes” (Ray, 2004). In addition, he concludes: “In short: the staff at this library learn in order to take control over new task jurisdictions relative to instruction and information technology, while also seeking the personal mastery needed to work well in teams. As they do this they create an opening for support staff to take on some of the tasks that were once the hallmark of the librarian profession” (Ray, 2004). Support staff are then able to extend their competence and are rewarded in the CP/M system for learning and applying new skills that support the strategic directions of the library. Radical change in the type of skills and competence needed in today’s library call for changes in the compensation approaches. Clarifying and communicating the principles of the compensation system, aligning the pay system with the performance management system, and building in the flexibility to reward the application of new skill and knowledge are critical for integrating the pay system with the other organizational support systems. 106 library trends/summer 2004 The Recruitment and Hiring System The goal of the recruitment and hiring system is to identify, attract, and employ people who can commit to the vision of an organization, apply skills and competence to the unique work performed, grow and develop personally in the unique culture of the organization, and learn and apply new skills as work changes. As the supply of and demand for librarians and knowledge workers fluctuates, active recruitment strategies are needed (see ACRL, 2002). The potential for employee success begins with the recruitment and hiring system. Applicants should fully understand not only skill requirements but also expectations for flexibility, continuous learning, and teamwork. They should also learn about the compensation and performance management systems and be able to assess their own personal needs, styles, and climate preferences before deciding to accept positions. Culture fit is an important part of success. Assessment of culture fit should not be limited to evaluation of current skills and abilities. Attracting applicants who will bring different perspectives, based on their different cultural, ethnic, sexual orientation, or gender experiences, and who will assist organizational learning, is an important goal that will support the team system approach. Methods for Creating the System When organizations recruit, they look for job fit and culture fit, as well as assess future potential of new hires. Understanding the needs (present and future) of customers, as well as the skills needed to accomplish work processes is foundational to the design of the recruitment and hiring system. Position descriptions need to reflect current needs, as well as describe the expectation for learning new skills and bringing unique perspectives. Clearly defining the expectation for team approaches to work and clarifying that work assignments can change frequently will help identify a match between a potential employee’s preferences and the organization’s performance expectations. Good skilland knowledge-based job descriptions will include criteria that will identify successful candidates. Emphasis on joining a team, not on filling a position or undertaking a specific job, will help applicants to understand the requirements of employment. Understanding of and agreement with the criteria can make the team’s search process more efficient. Staff from the work team and from other areas of the library should be involved in the hiring process to demonstrate that the new employee will be joining the whole library. Commitment to vision should be part of the screening process. Those involved in the search team process will need training in screening, interviewing, and assessment of skills and abilities that will predict success. Each member can bring different perspectives, values, and experiences to the process, enhancing the possibility for discovering culture fit. Challenges and Learnings There is a strong cultural tradition of defining positions by delineating present job tasks and their associated qualifications 107 phipps/system design approach in terms of certification or experience. This tradition militates against the goal of a strategically focused hiring system: to attract people who can commit to the organization’s vision and goals and who are excited to develop new competencies not yet understood. Alignment of the organization’s needs and the recruitment and interviewing process is critical. All staff involved in the process need to be versed in the ultimate goal. Pressure to “fill the vacant seat” as quickly as possible as work backlogs should be avoided. Each vacancy should be reviewed carefully. Skills and capabilities needed on the team and in the library, now and in the future, should be emphasized when recruiting. Often entire team assessments need to be done in order to know what new talent is needed. As libraries recognize the benefits of building a multicultural staff, reflection on current assumptions about “qualifications” need to occur. How much is experience a predictor of success in an organization that engages staff in constant change? What are “excellent communication skills” in a more diverse and global environment? How can widely differing work experiences and varying learning approaches be evaluated? How can interpersonal skills needed to succeed in a shared leadership and team-based system be assessed? Much research is still needed to improve the recruitment and hiring systems for our differently structured organizations. At the UA Library these questions are currently under study. Designing an attractive salary system, marketing geographical benefits, and highlighting the advantages of working in a team systems environment can enhance the attractiveness of positions. Opportunities for learning, flexibility in assignments, and participation in shared leadership can all serve to recruit motivated new employees who are ready to participate in a leading-edge organization. Other Critical Systems As mentioned in the introduction, there are many other systems that are just as critical to support of the organizational structure, vision, values, and goals. An information system that stores and makes readily available quantitative and qualitative measurement data is crucial to support of the team system and the planning system. A technological infrastructure must be developed that facilitates the goals of the open, horizontal communication system. A budgeting system that is clear, easy to understand, and flexible must be developed to accommodate the planning and compensation systems, as well as team budget request processes. In this environment of continuing budget concerns, a fundraising system that involves all teams in assessment of needs and takes into account the few critical goals in the strategic plan is sorely needed. A marketing system that supports the library in communicating its relevance and its unique value to customers is also needed as competition develops and funding agencies look for evidence of return on investment. 108 library trends/summer 2004 Summary Systems thinking is the “new management competency . . . the general reflex or habit of conceiving of reality in terms of interdependencies, interactions, and sequences. It is a way of thinking at the broadest level . . . or the smallest micro-level . . . (or) in between those two extremes” (Scholtes, 1998, p. 58). As organization development consultants contribute to improving “an organization’s visioning, empowerment, learning, and problem-solving processes” (French & Bell, 1999, pp. 25–26), it will be important that they utilize systems thinking. The design of organizations is complex. Without the development of organizational infrastructure systems that integrate fully with vision, values, and goals, the culture change necessary to work collaboratively in true learning organizations will be severely hampered. Much thought, involvement, experimentation, and assessment is critical to developing successful systems. The University of Arizona Library is just one research lab for studying system development in a team-based culture; the results of other experiments in organizational change will need to be studied to discover how these systems can be developed efficiently and effectively. At the UA Library, the ten-year journey of change has resulted in recognition of the library as central to the campus goals for research and teaching. Staff have successfully assumed leadership roles both within and without the library. Constant restructuring, in anticipation of new needs of customers and in response to continuing budget challenges, as well as a formally articulated focus on performance effectiveness, reflects the flexibility, customer focus, and continuous learning we intended in this new organizational structure. Peer recognition, in the form of the success of our biannual Living the Future conference, regular requests to share experience and methodologies and to benchmark processes, and the library’s receipt of the ACRL Academic Library Excellence Award in 2000 attest to the importance of the experiment. As we enter the 2004 fiscal year, the UA Library has made it a strategic goal to become a successful digital library, providing 80 percent of services and resources electronically by 2008. The organizational design of the digital library just now is emerging. New drivers for change have emerged. Insufficient physical space and the limited possibility of gaining new space will cause a rethinking of our mission and strategies—again. Desire for “personal control,” a new dimension in the 2003 LibQUAL+ARL survey, has become a dominant characteristic of customer groups, as was predicted in 1993. Technology has evolved to the point where “anywhere, anytime, information access” is a reality with Personal Digital Assistants and wristbands, PC tablets, wireless connections, streaming audio and video, and well-seamed, instant access to relevant information, regardless of publication source, but with evidence of reliability, source evaluation and veracity is just over the horizon. The same holds true for our competitors—some are ahead and 109 phipps/system design approach heading to new frontiers. We have new challenges (threats to fair use and privacy) and some not so new (the mergers and profit-driven strategies of the publishing industry) which pose a threat to our ability to afford access to the information our customers need. Technological infrastructure systems are now the focus of organization development, creating platforms with integrated systems that enable the type, level, and methods of access that customers need. At the same time, a new generation of library workers is joining libraries as knowledge workers. Generation X and Generation Y employees bring with them different values and different goals. The type of work required in this digital library may require different types of collaborative work and the development of different consortium-based organizational structures and systems. As we create these new structures, it will remain important to create appropriate systems to support the new directions, the new values, and the new goals. 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