Transforming a small business: A learning intervention

Dirk J. Geldenhuys; Frans Cilliers

Department of Industrial and Organisational Psychology, University of South Africa, South Africa

Correspondence to

ORIENTATION: This article reports on a learning intervention in a brokers company with fewer than 50 employees. A rich description of the participants' experience is provided.
RESEARCH PURPOSE: The purpose of the study was to explore the use of an experiential learning process during an organisation development (OD) intervention in a small business by means of a case study.
MOTIVATION FOR THE STUDY: This study explored the important role of small businesses; the role of management; and, more specifically, organisation development models that were developed for large corporations; as these emphasise the need to study the purpose of organisation development interventions in small businesses.
RESEARCH DESIGN, APPROACH AND METHOD: The study reported on in this article was a qualitative case study in a small brokers company with 21 staff members. The data were analysed manually by means of qualitative content analysis.
MAIN FINDINGS: The main finding of the research concerned how experiential learning intervention provided a space for participants to start exploring, and gradually changing the dynamics of their small business, by transforming their business into a more formal company.
PRACTICAL/MANAGERIAL IMPLICATIONS: The primary implication is that experiential learning interventions that are operationalised, from a psychodynamic perspective, can be valuable when consulted by small businesses during their transformation towards becoming more formal companies.
CONTRIBUTION/VALUE-ADD: This article contributes to the OD literature on small businesses, with fewer than 50 employees, by providing data on how the learning process, that commenced during an experiential learning intervention, assisted a small company to develop its identity towards that of a more formal company.

The large role played by small businesses in the South African economy is evident from the fact that an estimated 73% of the workforce in South Africa is employed by firms with fewer than 50 employees (Rankin, 2008). Despite the importance of small businesses, reported research in management comes from large firms, which regularly renders it non-applicable to small firms (Bobko & Potosky, 2011); hence the emphasis on the need for more research on small businesses (Miller, Bretton-Miller & Scholnick, 2008). The same emphasis applies to the organisation development (OD) and transformation models, that are exclusively based on well-developed systems and dynamics characteristic of large corporations (Dyer, 2005; Rodsutti & Makaythorn, 2005). The purpose of this article is to contribute to the OD literature on small businesses with fewer than 50 employees, by reporting on a case study of an OD learning intervention carried out in a small brokers firm.

Background

The dynamics of small firms differ from those of large corporations. Smaller firms are characterised by paternalistic cultures, informal approaches to planning, an emphasis on the importance of an individual's ideas and character, learning by working with others, and a belief in the importance of economic growth (Pen, Ang'wa, Forster, Heydon & Richardson, 1998). Dysfunctional leadership practices, family strife, paternalism and succession concerns can complicate management to such an extent that the firm can collapse (Kets de Vries, 1993). In order to manage change in small firms, Dyer (2005) has developed a conceptual framework that incorporates three different interdependent systems, namely the governance system, the business system and the family system. Dyer points out why the governance system is excluded from traditional frameworks, as it is assumed not to be accessible. Similarly, the family system is also excluded from traditional frameworks as it is regarded as irrational and something that should merely be eliminated.

The role of learning in small business transformation has been identified as an important emerging field of study (Hamilton, 2011; Harrison & Leich, 2005). In the literature there is also a tendency to conceptualise learning in small businesses in social terms. Devins and Gold (2002), for instance, argue in favour of a co-constructionist view of learning, whilst Taylor and Thorpe (2004) similarly define learning as a process of co-participation. Hamilton (2011) also argues in favour of a social perspective of learning that is embedded in everyday practice. Based on a review of the literature, Higgens and Aspinall (2011) suggest that critical aspects of learning in small firms are based on contextualised action, critical reflection and social interaction.

The literature on learning in small businesses, however, does not provide for addressing the informal, often unconscious, dynamics that influence transformation. The argument in this article is that the management of small businesses should be allowed the space to create an awareness of the different systems, and to explore the dynamics related to them, as identified by Dyer (2005). This would possibly enable these managers to identify their role in these dynamics and respond to any problems. This article will contribute to the understanding of the experiential learning process during an OD intervention in a small business, by means of a case study. The case study relates an intervention that was implemented to assist the management team, of a business, in dealing with interpersonal relations as part of a strategic planning process.

Learning about informal dynamics

The importance of learning, as OD intervention, is well known in the literature on OD and transformation (Garvin, 2005), especially as it was popularised by the concept of the learning organisation (Senge, 1990). According to the literature, learning also plays an important role in the growth of small businesses (Zhang, 2000).

The intervention that was used in this case was based on a systems-psychodynamic paradigm and, more specifically, on the 'two-task' model that was developed by Bridger (2001), a founding member of the Tavistock Institute. Underpinning the model is an approach that is dubbed a transitional approach to organisational change (Amado & Ambrose, 2001). According to the authors, Kurt Lewin's (1947) model of change is not relevant in contemporary organisations, as change is continuous and refreezing is thus not possible. Employees must therefore learn to manage continuous change (Ambrose, 2001). Transitional change is viewed as a psycho-social process that entails fundamental change happening simultaneously on a social as well as a psychological level. Social factors refer to factors in external reality, psychological factors (including products), services, organisational culture, rules and procedures. Factors refer to the subjective experiences in the minds of people. Change on a social level is addressed from a positivistic and humanistic paradigm, whereas change on the psychic level is addressed from a psychodynamic paradigm. According to the authors, this approach emphasises the continuous reactive and proactive interaction between these two levels of fundamental change and, therefore, emphasises the interaction between a positivistic, humanistic approach and a psychodynamic approach to organisational change. Proactive interaction is associated with the creation of social aspects that originate in the human psyche, whereas the reactive interaction is associated with the influence of social aspects on the human psyche. The key characteristics of this approach are the following (Amado & Amato, 2001):

• Provision is made for learning and development, leading to a better understanding of the complex organisational and contextual dynamics.
]]> Unconscious processes in individuals, groups and organisations must be taken into account, respected and worked through.
• Freedom in the above process provides space for final outcomes that are not predetermined, but that are formed by the interaction of all the issues in the process.
• The process provides a containing space for all feelings, fears and anxieties.
• The developmental situation will be better adapted to the realities of the whole system and context wherein the activity takes place.
• The developmental situation will provide more autonomy and responsibility for the individuals who are closer to the boundaries of the system.
• The developmental situation will contain a larger variety of behavioural options in the system than before the change.

Consequently, proactive interaction will ensure more resources for the system, and an increased capacity to react to changes.

During the intervention the participants focus on two tasks, firstly, an external task that they choose to work on in order to achieve a specific objective, and secondly, an internal task of studying the relationships and dynamics at different times, especially the way in which the group as a whole influences the task, and the work process of the group (Bridger, 1990; 2001).

The internal task relates to the study of the behavioural dynamics as it happens at the moment of the intervention, similar to that of a typical group relations conference (Hayden & Molenkamp, 2003; Linklater & Kellner, 2008). The task is primarily concerned with becoming aware of, and gaining insight into, those dynamics that influence or sidetrack the functioning of the group, and also to identify the members' roles in these dynamics (Cilliers, 2000; Eisold, 1985; Hunt & McCollom, 1994; Stein, 1996). Generally speaking, an awareness of these dynamics enables the individual to mature in their understanding and management of psychological and physical boundaries (the ability to distinguish between what belongs to the individual and what belongs to the group). In other words, the individual develops the maturity to authorise himself or herself in his or her role, thereby becoming less of a captive of group dynamics than before (Miller, 1989).

The task of the consultant is to facilitate the development of insight into the manifesting problems by means of confrontation, the clarification of common issues, expectations and intentions, and the emotional process of working through the resistance to change (Kets de Vries & Miller, 1984).

The research design that this article reports on will now be discussed, followed by a report on the findings of the research. In conclusion, the findings will be interpreted and integrated with the associated literature.

Research design

Research approach

The research, on which this article reports, was based on a qualitative, interpretative approach. Qualitative research contributes uniquely to the study of organisational issues, and owing to this such research is not only becoming more popular in organisational studies (Brewerton & Millward, 2001; Cassell & Symon, 2004; Von Rosenstiel, 2004) but also has certain advantages over quantified survey type research. Firstly, it is regarded as a scientific approach to gathering information and, secondly, the unconscious dynamics are accounted for by means of reflection (Vanheule, 2002). The primary purpose of the interpretative approach is to describe and understand, rather than to explain and predict, human behaviour (Babbie & Mouton, 2001).

Research strategy

The case study method was used in the research on which this article is reporting in order to provide a rich description of a single case (Flick, 2004). A case study design is generally appropriate for qualitative research (Lewis, 2003) and is important for organisational research (Locke & Golden-Biddle, 2002). The unit of analysis in this case was the board of directors of a small business.

Research method

The company was a brokers company, consisting of 21 staff members. The founding members of the company (a married couple) were former members of a large insurance company and, with the addition of a third partner; all three had equal shares in the business. At that early stage there was a positive climate in the company. Three new members were added to the board of directors. Two of them were former members of the defence force (a general and a major), whilst the third member was the former chairperson of a large investment company. With the last three persons joining the board, they decided to implement strategic planning for the growing business, and to address the chairperson's concern regarding the 'poor communication' and lack of co-operation between the board members. It was decided to arrange a combined session in order to 'put the problems on the table'.

Entrée and establishing researcher roles

The first author, in the role of science practitioner, was invited by the chairperson of the board to 'clear the air' as part of their strategic planning session. Background information about the company and the board of directors was provided during contracting. Action research, as an approach to the intervention, was discussed and permission was granted to interview the respondents after the intervention and to apply the information for research purposes. The nature of the intervention was discussed with the participants and it was emphasised that participation was voluntary. The intervention took place over a weekend and involved five sessions: the first three one-and-a-half-hour sessions were for experiential learning and the last two sessions were for reflection, application and debriefing. This programme was repeated on the second day and all the sessions were attended by the six board members.

Sampling

All six board members who participated in the intervention were interviewed.

Data collection method

The purpose of the research was again explained to the respondents, and confidentiality and anonymity were ensured, and permission was obtained to record the interviews.

In-depth interviews were conducted to obtain a rich description of the experience of the Board members who participated in the intervention (Babbie & Mouton, 2001). This provided an opportunity to study the dynamics of the company.

Recording of data

Data analysis

The data were analysed manually by means of qualitative content analysis (Babbie & Mouton, 2001; Spencer, Ritchie & O'Connor, 2003). The open coding procedure of grounded theory was used to assist with data analysis (Flick, 2002). The influence of the data analysis by the process of data collection in this research is acknowledged, as these two processes cannot be used in isolation in qualitative research (Taylor & Bogdan, 1984).

Strategies employed to ensure quality data

The first author, a White Afrikaans-speaking male, was responsible for the interview guide, data collection, analysis and interpretation (McCormick & White, 2000). All of the data were discussed with a colleague who is trained in, and working from, a systems-psychodynamic perspective in organisations. The identified themes were reported to and discussed with the respondents after the analysis of the data.

Reporting

A descriptive style of reporting was followed. Wherever possible, the same phrases, words and key terms used by the respondents were incorporated into the reporting to substantiate the themes. As some responses were in Afrikaans, a qualified translator was used to translate the Afrikaans transcriptions into English.

Findings

The themes are divided into two categories: themes that are related to the experience during the intervention, and themes that are related to the experiences of the members after the intervention. The following themes were identified.

Theme 1: The intervention was an unpleasant experience that the participants would rather have avoided

Based on the data, a distinction can be drawn between the cognitive, affective and conative aspects of the experience. On the cognitive level, the intervention was a new and strange experience that did not always make sense. The experience was described in vague terms such as 'interesting', 'strange' and 'fluffy'. One respondent described his experience as follows:

'I had to give it a lot of thought, to determine the value thereof. Then I also thought the process is, as I look at it, mediocre, but the more I thought about it, the more I realised what the value of the process is.' (Particpant 1, employee, Broker Company)

On the affective level, three respondents described their experience of the intervention as uncomfortable, draining and painful whilst, cognitively, they wanted to avoid the situation. One of the respondents mentioned that he 'just wanted to get out of that situation'.

Theme 2: The intervention had a positive influence on interpersonal relationships

More open communication and an awareness of underlying conflict lead to a more accurate view of human behaviour in the company.

Sub-theme 1: Open communication during the intervention: Enough evidence was found to demonstrate more open and honest communication from the participants during the intervention than before, despite the fact that they had been working together for more than three years. One respondent mentioned that he realised that there was 'no communication between the original role players about whereto they think the company should go' whilst another respondent mentioned that '...it opened up things and the guys started talking...'.

Sub-theme 2: Awareness of underlying conflict: The participants became aware of the role of emotions, especially emotions relating to conflict, in the company. Words such as 'emotional things', 'emotional baggage' and 'issues' were often used when referring to the behaviour of the group. One respondent mentioned knowing about an issue but that he did not realise how many issues there were.

Theme 3: Awareness of group dynamics

To some extent, the respondents had become aware of the group dynamics influencing their behaviour. For instance, one respondent mentioned that the awareness was valuable to him in the sense that he realised how the dynamics fitted together and that this made sense to him. Another respondent commented that they had achieved what he wanted them to achieve that day and 'when the conflict was diffused, hopefully we could say what everyone's role is, and everybody's mandate'. He summarised the experience by saying nobody there could say that they didn't discover to what extent they contribute to the process, where they fit in and what role they play ...'. However, this insight was mainly demonstrated by the founder member of the company and to a lesser extent by other members.

After the intervention

Theme 4: A positive experience, characterised by reflection, self-empowerment and commitment

Based on the data, a distinction can be drawn between the cognitive, emotional and conative experience of the participants, which are similar to the themes during the intervention. On a cognitive level, the intervention led all of the respondents to reflect as they attempted to understand the intervention per se, and the company, and as they attempted to relate the intervention to their work experience. The experience is especially evident in the following description by one of the respondents: '...after the time there was in the transaction also a number of emotional issues that are now sorted and ' ... after the time when we again talked about the company ... it became clear to me that things are now on track ...'. In the course of comparing of this intervention with previous interventions it was mentioned that:

'...and you walk out of it, I tell you, the following morning you wake up and you forget about it, but this made me think again, as I see the process happening every day One of the respondents also mentioned that he had learnt that 'you first have to fix the foundation and that there must be buy-in before you move to a new structure'. (Respondent 2, employee, Broker Company)

Of the respondents, only two referred to their affective experiences after the intervention. These experiences varied from optimism about the future to concerns about issues that still required a resolution.

On a conative level, however, it seemed that at least five of the respondents were empowered to exercise their own authority during decision-making and to confront their colleagues. One respondent, for instance, provided the following evidence for taking up her own authority and holding another respondent accountable:

'He is a driver. Although we do have equal shares, there is no doubt that he is a driver and so to say the owner of the company; and everybody accepted that it is so...but it was only when I have realised that this whole process that has taken place, you must now take responsibility... I think it was a shock for him and he said that he take responsibility for what has happened... ' (Respondent 3, employee, Broker Company)

There was also evidence of more commitment towards the other participants and the company. One respondent mentioned, for instance, that if it had not been for the intervention, they would have fallen apart. This commitment, however, was tempered with realism about the future of the company.

Theme 5: Better interpersonal relations after the intervention

It seems evident from the interviews that interpersonal relations improved after the intervention. This is especially evident from examples regarding communication and conflict after the intervention.

Theme 5.1: Open communication after the intervention:

Communication was more open after the intervention. One respondent mentioned that he had long discussions with colleagues a week or two after the intervention and said that:

'...they now need to sit down and honestly tell each other what has happened the past six months in my frame of reference; and it might be a good way of correcting problems over a long period, so that people can sit down and work on it'. The respondent who had initiated the intervention said that he also realised that there is no communication between the original role-players'. (Respondent 4, employee, Broker Company)

He also referred to his 'dream' for the company, which he shared with only two other respondents but not with the other colleagues. It was also mentioned that My thinking back about the session is that it was the beginning to sort out a lot of issues, not that I think everything is now sorted

Theme 6: Increased awareness of group dynamics in the company

After the intervention the participants referred to group dynamic constructs more frequently than during the intervention.

Sub-theme 6.1: The use of metaphors: Respondents used metaphors in a number of instances, especially metaphors related to family dynamics, to talk about the dynamics of the company. Metaphors that were used during the interventions were applied to their work place; they elaborated on the metaphors and new metaphors were added.

In an attempt to describe the boundaries between the members of his family one respondent stated: 'I don't want to say that the company is not important to me. My child is also my company With reference to the metaphors that were used during the intervention, another respondent said:

'If you want to talk about the family, I agree 100 per cent, because the two of us were physically in the business and all personnel were like children for us. I so much took care of these people ... I want to say that he is the brother that came out of the bush, and now he comes and frightens the other kids in the house by suddenly telling them that they are not allowed to do this or to do that. And now the mother, who is my wife, is not happy. And I understood her role but I did not know how to deal with it.' (Respondent 5, employee, broker company)

The fighting metaphor was also used by some of the other respondents. One respondent, for instance, said the following: '...the right word is war. I want to call it physical war. There is no other word to describe it and '...the other people are civies: they just sat there, looking in from the outside Another respondent referred to a colleague as not a 'fighter', whilst a third respondent referred to the fighting metaphor as '... a very well-placed process for the people to understand what their role is ...'.

A metaphor was also used to describe the ideal company. One respondent quoted another who had apparently said the company should be like a fish tank ... there is a boundary but within that you may do as you wish. This is the type of freedom what I really want to have in this company ...'.

Sub-theme 6.2: Exploring psychodynamic role differentiation:

There was ample evidence to show that all the respondents had explored the participants' roles after the intervention. The theme of inclusion and exclusion was, for instance, often referred to. The difficulty of newcomers joining the company was also acknowledged by one participant.

Sub-theme 6.3: Managing boundaries: There was enough evidence that boundaries had become important after the intervention. One respondent provided an extensive discussion about the boundaries of the company and of his family, and the difficulty in managing the boundaries between the two systems:

' ... I have to do it. I do not have a choice. Otherwise I will have to get out of my marriage, or she will have to start a new company.' (Respondent 6, employee, broker company)

Another participant's description of changing the structure of the company confirmed the important role of family boundaries for the respondents: 'Where it was a family business and the culture [was] wrong, they then ran and spread lies; that was unnecessary.' The intentional setting of boundaries was furthermore evident in the resignation of one member from the board of directors. This was mentioned by two respondents, one by linking the resignation with the formation of the company's identity. Furthermore, it seemed that, in certain instances, physical boundaries were set between participants by means of office allocation.

Discussion

The purpose of this article is to report on and discuss the purpose of an experiential learning process during an OD intervention in a small business, by means of a case study. Based on Theme 1, it is argued that the value of experiential learning in a small business cannot only be determined by the positive experience of the participants, but also how it raises levels of anxiety which, if not consulted to effectively, may cause harm in the system. This finding is in line with Miller (1989, p. 28) who states that 'scepticism tends to be a more positive indicator than enthusiasm or euphoria'. This is also in line with the critique of Long and Newton (1997) on popular views of OD, according to which change can happen without pain. French and Vince's (1999) view is also aligned with this, emphasising that training normally focuses on rational problem-solving and not making provision for what he describes as a struggle to learn from experience.

A possible interpretation of theme two is that the intervention provided space for open communication. The communications led to an awareness of the reality of organisational dynamics in a small business. The learning is that behaviour in organisations is not only rational and positive but also involves negative emotions and conflict. The value of acknowledging the negative side of human behaviour is well known in the psychodynamic literature. Lee (1999) describes the value as follows:

]]> Finally, it can help people in organisations have the courage to come to terms and be able to deal effectively and appropriately with the reality of their own and other people's lives, rather than with how they imagine it should be. In other words, it can help people "break the bubble" of illusion, which often leads to lack of action, inappropriate action, inauthentic action and subsequent dissatisfaction with their lives. (1999, p. 588)

Regarding the learning process, it can be argued that the learning formed part of a social process where the participants learned together. This argument is in line with the co-constructionist view of Devins and Gold (2002) about learning in small businesses.

Furthermore, in comparing the learning that took place during the intervention (Theme 1 - Theme 3) and the learning after the intervention (Theme 4 - Theme 6), it is argued that experiential learning in the small business can be regarded as a process that goes beyond the learning intervention. The process has similarities with Kolb's model of experiential learning (Kolb, Osland & Rubin, 1995) whereby experiential learning is viewed as happening in four phases, starting firstly with concrete experiences, followed secondly by observation and reflection, thirdly, forming of abstract concepts and generalisations, and fourthly, testing the implications of the concepts in new situations. This intervention, however, added a deeper dimension to Kolb's (1984) model as it entails studying people and their mutual relatedness, where the participants learned about organisational dynamics and their role in these dynamics. This is evident from Theme 4 and Theme 5. The intervention provided an accelerated starting point for a learning process where participants learned to work on exercising power and authority, to be aware of and to manage themselves in their roles. The conflict was not solved, but the participants became aware of their responsibility to solve the conflict themselves after the intervention. The empowerment of the individual members probably leads them to commit more fully to the company. Based on the findings presented in Theme 6, it is argued that the inclusion of metaphors can add value to the experiential learning process in a small business. According to Morgan (1980), the use of metaphors plays an important role in the process of constructing a social reality. By means of metaphors, the unknown is placed in the light of the known and in this manner they serve as bridging for cognitive domains. Metaphors can therefore be used to generate knowledge, to stimulate creativity, to change perceptions, to provide new perspectives, and to facilitate change (Putnam & Fairhurst, 2001). Gaddefors (2007), who studied the presence of metaphors in the entrepreneurial process, also argues that the use of metaphors facilitates learning, particularly when people are working under pressure to communicate something complex and difficult.

According to Putman and Fairhurst (2001), metaphors have a dual function, namely to facilitate change and also to provide stability. This is in line with the application of Winnicott's (1951) theory of personality development, by authors such as Amado and Ambrose (2001) to facilitate organisational transformation. As indicated in this article, the model that was used during the intervention was based on this model. In the light of this discussion, the metaphors in this case were used to understand the dynamics that they unknowingly confronted during the intervention, and could thus have served as bridging objects. For example, the family metaphor, on the one hand, could have symbolised the safety of the previous family business, whilst, on the other hand, it could have been indicative of the illusion that they are part of a family and not a real business. In this sense, the inclusion of the metaphor could have been helpful in transforming the family business into a more formal company.

A further interpretation is that the presence of metaphors allowed the participants to explore the psychodynamic role differentiation, and ultimately assisted them in managing the boundaries between the different systems of which the participants formed part, such as the governance system, the business system, and the family system (Dyer, 2005). It is, therefore, argued that their attempts to manage their boundaries, on a personal and social level, allowed a process to be put in place to develop the family business into a more formal company. The importance of managing boundaries on a psychological and group level is well-known in the psychodynamic literature (Bion, 1961; Czander, 1993, Roberts, 1994; Stapley, 2004).

Conclusion

Based on the discussion, the emerging hypothesis is that the experiential learning intervention provided a space for participants to commence with exploring and changing the dynamics of their small business, in transforming it toward a more formal company. This learning can be regarded as an accelerated learning process, the value of which was only experienced after the intervention, and not before it. The process was painful, characterised by the inclusion of metaphors to assist with the transition. The content of the learning related to the improvement of interpersonal relationships, empowerment in working with group dynamics and role differentiation, and the management of personal group boundaries. The literature on the application of an experiential psychodynamic learning intervention was thus supported by the findings.

Implications

The implication of the research is, firstly, that experiential learning interventions, as operationalised from a psychodynamic perspective, can be valuable when consulted by small businesses during their transformation into becoming more formal companies. Secondly, opportunities after the intervention, to reflect on past experiences, will enhance learning in small businesses.

Only board members were involved in the intervention, and not employees of the business. More interventions, including more members of the company, could have assisted in validating the findings in the rest of the system. The intervention was also performed over a short period, whilst longer interventions could have provided more saturated data.

Recommendations for future research

It is recommended that similar interventions be carried out in different small businesses to allow generalisation. It is further recommended that the role of metaphors in the learning process should be studied in more depth. Longitudinal studies are also recommended to assess the transformation of small businesses over time.

Author Acknowledgement

Competing interests

The authors declare that they have no financial or personal relationship(s) which may have inappropriately influenced them in writing this paper.

Authors' contributions

Both authors participated in the planning of the research project. D.G. (UNISA) performed the literature review and the empirical study. F.C. (UNISA) was acting in a supervisory role and was co-responsible for the academic editing of the article.

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Correspondence to:
Dirk Geldenhuys
PO Box 392, UNISA 0003,
South Africa
Email:geldedj@unisa.ac.za

Received: 21 Oct. 2011 ]]> Accepted: 11 Jan. 2012
Published: 27 Mar. 2012