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The new organizational order

Consider these four cases:

Case 1: Outdoor activist and the founder of an incredibly successful outdoor clothing company Patagonia, Yvon Chouinard, has stated:

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Yvon Chouinard at his favorite place

“I hate the idea of managing people. I don’t like people telling me what to do, so I can’t stand to tell other people what to do. I purposely try to hire people who are really self-motivated and good at what they do, and then I just leave them alone”.

”Mainly, my job is to be on the outside and bring ideas into the company and forge change.”

“The worst managers try to manage behind a desk. The only way to manage is to walk around and talk to people.”

”I know it sounds crazy, but every time I have made a decision that is best for the planet, I have made money.”

Case 2: The practice of defining the annual salary in highly successful tomato paste company Morningstar that controls half of the US market:

All employees define their own annual salary level and make it public within the company. They receive feedback from a committee of colleagues, for example: ”you were little modest this year, shouldn’t you give yourself an increase” or ” you gave yourself a 7% salary increase and we think that is quite generous, would 3-4% do?”. However, the employee decides if he or she will stick to their own salary decision. Interestingly, employees seem to be able to gauge their position quite well because only 1% is ”out of range”, in other words, too generous or tight to themselves. Since everything is public and open, people are not playing games, which can be common in ordinary companies. The above type of approach relies completely on people’s sense of justice, which is strikingly similar no matter where you are in the world.

Case 3: How meetings are run at the German health clinic Heiligenfeld:

Each meeting begins by choosing one person to follow the dialogue: she is given a bell and her task is to sound it when she observes that someone’s ego is speaking. When she feels that a person is only trying to impose his or her own opinion, she rings the bell. This tells all participants to be quiet until the bell also quiets. This non-violent communication helps people learn to control their egos during discussions.

Case 4: Lack of secrecy about the factors of the amazing success of the Dutch nursing company Buurzorg founded by Jos de Blok:

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Jos de Blok and me at their headquarters in Almelo, Netherlands

Buurtzorg’s mission is to help people live meaningful lives through an innovative home nursing service. It has been tremendously successful in achieving its mission. The success has not kept founder Jos de Blok from explaining to competitors how they’ve gone about it or from remaining open about every factor of the company’s success. He considers this openness as part of his job. In fact, the absolute openness of the company practices has been one of the key reasons Buurtzorg has become one of the most successful companies in the Netherlands over last 10 years. The openness applies within the company too: company strategy is not defined from the top, rather there is a company-wide process in which the founders and everybody else, together, carefully consider and weigh in on what direction the company should take. All new practices or functions are adopted only if the nurses are willing.

These four examples illustrate the rise of a new kind of organization, which operates very differently compared to the standard corporate world. These companies follow three basic principles[1]:

  1. The practice of self-management: most of the work is arranged around autonomous teams that have an absolute vote on how they organize their work
  2. The appreciation of the wholeness: people in those organizations are encouraged to be very authentic in what they do and to express their deepest sentiments and thoughts.
  3. The evolutionary purpose: these companies are actively and constantly striving to find new ways they can realize their larger mission, which is
    always socially driven. 

ReaktorIn Finland, we have done thorough research on Reaktor, the digital service company. They follow these principles too, with a great success. We were absolutely impressed by the ways they had challenged every standard way of leading a company. And been very creative in ways building a more human-centric form for work. It has led to an incredibly interesting story. You can read more about their ways of working from our recently published report “RE-acting the Future”, downloadable from here.

I am very convinced that organizations like Reaktor, Buurtzorg, Patagonia, Heiligenfeld and Morningstar will lead us to the future. The most enduring success stories will be told about the companies that practice these principles. The evidence already shows that following this kind of a path leads to a triple win: a) outstanding company performance b) happy, satisfied and productive employees and c) high customer satisfaction. What more can you ask?

In these times, when robots are threatening our jobs and most of those who still have a job feel disengaged, we need to be shown that the future is of those organizations that do not follow the industrial pattern of organizing the work but turn the focus on human being, thereby tapping the true potential that lies hidden in all of us.

 

[1] You may get a nice overview of these companies from the  seminal study by Frederic Laloux:  Reinventing Organization (2014). Nelson&Parker.

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