Rethinking organization

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					 Rethinking
organization
  6 inputs
Rule # 1
Efficiency
is the goal
   The management model that predominates in most
   organizations has its roots in the early 20th century.

   At that time, management innovators were focused on
   the challenge of achieving efficiency at scale. Their
   solution was the bureaucratic organization, with its
   emphasis on standardization, specialization, hierarchy,
   conformance, and control.




Source:
http://www.managementexchange.com/blog/m-prize/management-20-challenge
Most important for efficient strategy execution




Source
The secrets to successful strategy execution. Harvard Business Review, June 2008.
http://hbr.harvardbusiness.org/2008/06/the-secrets-to-successful-strategy-execution/ar/1
Efficiency


      Hierarchical   Innovative
       company        company




      Bureaucratic   Creative
       company       company



                             Creativity
               Low degree of        High degree of
              controlling detail   controlling detail


   Many
controlling    Unmature              Mature
  layers      Bureaucracy          Bureaucracy



   Few
controlling      Market            Self control
  layers
                                  Closed           Open
                                  system          system


Rational                  Organization as     Contingency view
 actors                     a machine         Organization as a
                                               living organism




  Social                  Human relations     Organization as a
                          Organization as a   loosely coupled
  actors
                             big family           network



Source: W. Richard Scott, 1981.
Redefinition of rule # 1

        What if creativity
         was the goal?
A person, who is excited about an idea, tries it out.




Source: http://www.managementexchange.com/hack/%22quests%22-organizing-principles
                  Efficiency                          Creativity




Source: http://www.vijaygovindarajan.com/2009/08/innovation_in_a_reset_world.htm
  The successful organization of the future will have two
  organizational structures:
  1. A hierarchy.
  2. A more teaming, egalitarian, and adaptive network.

  Both are designed and purposive. While the hierarchy
  is as important as it has always been for optimizing
  Work, the network is where big change happens. It
  allows a company to more easily spot big opportunities
  and then change itself to grab them.


Source:
John Kotter.
http://blogs.hbr.org/kotter/2011/05/two-structures-one-organizatio.html
  Rule # 2
Hiearchies are
  prescribed
Power for decision making
 is centralized at the top
Power distance

        China          France




                 Uncertainty avoidance
Redefinition of rule # 2


   What about letting hierarchy
      develop naturally?
      In any Web forum there are some individuals who
      command more respect and attention than others -
      and have more influence as a consequence.

      Critically, though, these individuals haven’t been
      appointed by some superior authority. Instead, their
      clout reflects the freely given approbation of their
      peers.

      On the Web, authority trickles up, not down.



Source
http://blogs.wsj.com/management/2009/03/24/the-facebook-generation-vs-the-fortune-500/
Power distance




 UK, USA, Scandinavia




                        Uncertainty avoidance
Number of management levels
Rule of thumb

Number of people                   Number of management levels
Up to 20 persons                   1 manager.


Up to 200 people                   Maximum 2 management levels.


Up to 2000 people                  Maximum 3 management levels.



Source:
Mr. Lars Kolind.
http://kolindkuren.dk/2008/11/03/v%C3%A6kst-i-krisetider-ledelse/#comment-166635
  Rule # 3
  Information
flows vertically
                    In large organizations,
              resources get allocated top-down.




Source:
http://blogs.wsj.com/management/2009/03/24/the-facebook-generation-vs-the-fortune-500/
Benefit of one-way communication: Time savings




 By commanding, assignments are coordinated fast.

 By commanding, conflicts are ended fast.




Source: Malone, Thomas W.: The Future of Work, p. 53.
Redefinition of rule # 3


       What if information
         flows freely?
Source:
”Harnessing the power of informal employee networks, 2007.” The Mckinsey Quarterly, November 2007.
Source: http://www.realinnovation.com/content/c090209a.asp
  Rule # 4
Centralization
           Managers may become bottlenecks
              due to information overload.




Source: Malone, Thomas W.: The Future of Work, p. 53.
  The management dilemma

          Badly judged centralization can stifle initiative,
          constrain the ability to tailor products and services
          locally, and burden business divisions with high
          costs and poor service.

          Insufficient centralization can deny business units
          the economies of scale or coordinated strategies
          needed to win global customers or outperform
          rivals.


Source:
https://www.mckinseyquarterly.com/Organization/Strategic_Organization/To_centralize_or_not_to_centralize_2815
        If you answer no to all 3 questions,
                 do not centralize




Source:
https://www.mckinseyquarterly.com/Organization/Strategic_Organization/To_centralize_or_not_to_centralize_2815
Redefinition of rule # 4

    What if people took as many
      decisions as possible
            themselves?
    At Haier, each unit regards itself, and is evaluated,
    as an independent business earning a profit or
    loss.

    Managers are there only to make sure that the [self
    managed] units get what they need. If managers
    do not help the self managed units well, people can
    vote managers out.



Source
Zhang Ruimin.
http://management.fortune.cnn.com/2011/07/15/zhang-ruimin-managements-next-icon/
   Today, the average manager in Google’s product-
   development group has more than 50 direct reports,
   and for some leaders the number tops 100.




Source: Hamel, Gary: The Future of Management, p. 111.
3 factors lead to better performance
and personal satisfaction:

# 1: Purpose
What is meaningful.

# 2: Mastery
The urge to get better.

# 3: Autonomy
The desire to be self directed.


Source:
Daniel Pink. http://www.youtube.com/watch?v=u6XAPnuFjJc
Hierarchies   Markets
          Few and weak   Many and powerful
          stakeholders     stakeholders


  Few
changes




 Many
changes
                                  Closed           Open
                                  system          system


Rational                  Organization as     Contingency view
 actors                     a machine         Organization as a
                                               living organism




  Social                  Human relations     Organization as a
                          Organization as a   loosely coupled
  actors
                             big family           network



Source: W. Richard Scott, 1981.
  ”What if many tasks currently done by large
  companies were done instead by temporary
  combinations of small companies and independent
  contractors?

  Taking this idea further, what if most businesses
  consisted of one single person?”




Source: Malone, Thomas W.: ”The Future of Work”, p. 74.
 Strengths of markets

  Efficiency
   People move to assignments where they
   generate value for others.

  Flexibility
   Anyone can work on any aspect of the problem.

  Motivation
   High autonomy to decide things individually make
   people work hard.



Source: Malone, Thomas W.: The Future of Work, p. 106.
  Rule # 5
Specialization
   Each worker does
       specialized
operational assignments
   In a sense, the crowning accomplishment of
   the hierarchy and its management processes
   is the enterprise on autopilot, everyone
   ideally situated as a cog whirring on a steady,
   unthinking and predictable machine.



Source:
John Kotter.
http://blogs.hbr.org/kotter/2011/05/two-structures-one-organizatio.html
                                                 Someone else’s job




Source: http://www.janbosch.com/Jan_Bosch/Presentations_files/ESA2010-Keynote.pdf
Specialized work becomes routine.
Source: http://www.realinnovation.com/content/c090209a.asp
Source: http://www.pixelio.de/details.php?image_id=316694&mode=search
     Specialization prevents people from doing
     more jobs which could create more value.




Source: Malone, Thomas W.: The Future of Work, p. 53.
     ”The old organizations are breaking down, because
     if everybody is doing a well-defined task and job
     requirements change, people do not know what to
     do anymore – nor do their bosses.

     And today’s fast-moving, competitive markets will
     not let you hide this kind of ignorance inside your
     organization.”




Source: Abell, Derek F.: Managing With Dual Strategies, p. 129.
Source: http://www.youtube.com/watch?v=UKl1pjhQJaI
Redefinition of rule # 5

    What if every person worked
    on many different things that
       they find meaningful?
Source:
Tom Malone.
http://blogs.hbr.org/video/2011/07/the-future-of-work-20.html
3 factors lead to better performance
and personal satisfaction:

# 1: Purpose
What is meaningful.

# 2: Mastery
The urge to get better.

# 3: Autonomy
The desire to be self directed.


Source
Daniel Pink. http://www.youtube.com/watch?v=u6XAPnuFjJc
Tasks are chosen, not assigned

The Web is an opt-in economy. Whether contributing to
a blog, working on an open source project, or sharing
advice in a forum, people choose to work on the things
that interest them. Everyone is an independent
contractor, and everyone scratches their own itch.




Source
Gary Hamel.
http://blogs.wsj.com/management/2009/03/24/the-facebook-generation-vs-the-fortune-500/
  Rule # 6
Standardization
Structures and processes
  are VERY important
      Structure




Process           Task
Structures, processes, plans, budgets,
   templates, guidelines, and rules
       uphold standardization
Command and control management
  establish and keep regularity and
  predictability in operational work
Redefinition of rule # 6

 What if products and services were
  individualized / personalized
      to create more value for
     the individual customer?

				
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Description: 6 inputs on rethinking organization.