space.discussion.Three+Domains

Action IV

**DIAGNOSE THE THREE DOMAINS AND**
 * YOUR CLIENT’S DEGREE OF READINESS **

// "There are ways to work with each other that bring out // // the best in us that are different from the ways we do // // things now. " // Production Line Associate // Food Manufacture //

Action III outlined how to understand the nature of the alignment required to sustain a healthy and competitive organization. In Action IV we take a look at a simple model that encompasses the whole client system, from the outside in, to help us diagnose what needs to be done. Why the //whole// system?

Because the parts often don’t tell the story. As Russell Ackoff said in //Creating the Corporate Future//, “The eye detached from the body cannot see.” Determining the real cause of poor organizational performance requires a diagnosis of not only the fundamental parts but also the system in which they function.

We need to think and act systemically. Changing the processes, relationships, information, systems, or skills in one part of the organization affects other groups that depend upon them and upon whom they depend.

One way to get one’s mind and therefore diagnosis around an organizational system is to recognize that all organizations perform within three basic domains—marketplace, liaisons, and internal operations. By working with a model that captures all the internal and external variables, the OD practitioner is better prepared to understand what is happening to the organization and provide the knowledge, methods, and technologies to help.

The following is a model that serves as a foundation for most of my work, and which I first used with an automotive insurance company. This model provides a way to organize your analysis and recommendations. For example you group your information under each of the domains described. This helps you to identify themes and relationships in the information. It also ensures that you are looking at the organization through multiple lenses and in a systemic manner.

Figure IV-1, displays this Three Domain Model. All organizations work within these three domains. It is a shorthand way of systemically looking at one’s organization from the outside in. The model allows one to ask questions about how the marketplace is influencing their business and vice versa, how they are partnering or not with their business liaisons, and how well they are performing in their internal operations.

This model is based upon the concept of the Appreciation, Influence and Control of William E. Smith, PhD. Director and founder of ODII. (Smith’s application of his AIC concept may be found in Marvin Weisbord’s book, //Discovering Common//  // Ground //, Berett-Koehler Publisher, Inc., 1995.) My model is   more of a practitioner’s tool to diagnose an organization or  multiple organizations’ systems, in order to help myself and my client better integrate the needs, ideas, interdependencies and energy of all of their stakeholders.

** Figure IV-1: The Three Domain Model - Marketplace, Liaisons, Internal Operations **

** The Marketplace ** The marketplace is full of complexities. There are government regulations, scarcities of materials, weather conditions that impact resources, battles for market share through price reduction, competition for people with the right knowledge and skills, cash flow fluctuations, distribution problems, ad infinitum. An organization doesn’t necessarily control these factors. But it should understand them, and when possible, influence them to  advantage.

The list below illustrates factors that fall under the marketplace domain. A point which is sometimes missed or misunderstood is the difference between customers and consumers: The //customer// of a consumer goods manufacturer would be the distributor or the retail store. The //consumer// would be the end user who buys the goods in the store. The manufacturer should recognize both as key stakeholders. Depending upon the industry and niche the client serves, these factors play an important role in determining strategy.

• Customers • Consumers • Weather • Government • Competitors • Materials • Economy • National emergencies

** Liaisons ** Liaisons are pass-through groups that support and service others. It is a transitional event, where work is usuall thought of as being handed off to others for futher transformation and integration. There are two kinds of Liaisons: external and internal. External liaisons —those between the client and the marketplace—help the organization deal with the environment in which it operates. Within the organization, liaison entities support the production groups that actually get product and services out the door.

It is important to be aware that when you collaborate with people in all these domains, including liaisons, you will be on the path of a systems approach and thus capable of becoming a learning organization and therefore being more innovative and creating a sustainable future.

• Suppliers • Contractors • Distributors • Lending institutions • Ad agencies
 * External liaisons include: **

• Purchasing • Sales • Marketing • Human resources • Information technology
 * Internal liaisons include: **

** Internal Operations ** In a manufacturing company the internal operations group are the planning, scheduling, and production functions. In a film company the internal operations could be the director, actors, and camera crews that are dependent upon the

• Designers • Grips • Make-up • Costume • Lighting • Sound • Security

It is not difficult then, when you look at these three domains, to understand why William Pasmore calls the environment turbulent and complex. (It is also understandable why so much attention is paid to cross-functional teamwork as part of  improving internal organizational performance). Further, it is not much of a conceptual leap to see why understanding the core organizational competencies and strategic intent relative to the three domains is essential for an organization that wants to be innovative.

Action IV results can validate or not our initial insights gained from the discovery process in Action II. At minimum we can:

• confirm our perception of how the organization views itself and how others view it, • gain some insight about what the client’s dream is, • determine how out-of-the-box they seem willing to act in order to realize that dream, • interpret how the marketplace responds to them, • extrapolate whether they have a strategy and are reasonably aware of marketplace factors, their relationships with others and each other, and efforts they have made to develop their business and themselves.

By using the analysis of the Three Domains: Marketplace, Liaisons, and Internal Operations, we begin to blend what Ram Charan terms “business acumen” with social interactions (or the sociotechnical/sociobusiness framework discovery). This brings balance to the perspective for proper solutions and becomes an __either/and__ rather than an __either/or__ proposition. From all of this we also get an idea of our own readiness to service the client’s needs and the their readiness to accept or not accept various solutions.

By taking the next step and diagnosing each of the domains you achieve several more things:

1. The stakeholders in each domain are alerted that your client is measuring what is happening. 2. The stakeholders feel some influence and control over impending change. Their involvement facilitates the process of buy-in. 3. You begin to understand and talk the client’s business and other challenges from their perspective and see them in a holistic way. 4. Interdependencies begin to become clear. 5. Social and task issues emerge. 6. Values, identity, relationships, information, processes, systems, and behavioral patterns become more apparent. 7. Causes contributing to the inability of the organization to increase margins (profits), velocity (turnaround from production to customer purchase), and cash flow are unveiled. 8. Your own degree of readiness to help the client begins to crystallize.

There are a number of ways to initiate the diagnosis. I like to conduct personal interviews with the CEO, his/her direct reports, and if it seems advisable, with their managers. In addition, I usually interview either individuals or groups of external liaisons, customers, and consumers. Given the responses from the interviews, I conduct focus groups with a cross-section of department supervisors and their direct reports.

The focus groups serve three purposes. One is to validate (or not) what the executives and managers said. Another is to further explore topics that emerged from the interviews. Sometimes an issue arises in an interview that I don’t fully grasp or which implies certain other problems. The focus groups, which have a cross-section of departments in them, can usually clarify these topics. Finally, and it cannot be said too often, people’s involvement reduces the punishing effects of not having some influence or control over change resulting from the OD effort. Hopefully their involvement will pique their interest and commitment.

__// This article is an excerpt from the book How to OD…And Live to Tell About It – //__ __// A Practitioner’s Guide for Organization Development, //__ __// by William Becker //__