Morning Star in Nederland

logo-new1Afgelopen week is Paul Green Jr. van het self-management instituut (link)in Nederland geweest. Samen hebben we presentaties gegeven bij een aantal organisaties. Self management is een organisatie model bedacht door Chris Rufer van het bedrijf Morning Star in California (link). In 1995 heeft hij alle managementlagen in het bedrijf afgeschaft. Iedereen heeft het recht zich overal mee te bemoeien, mag zelf bepalen welke investeringen gedaan moeten worden en niemand is de baas (nou, de eigenaar als het echt niet anders kan). Ik ben daar vorig jaar op bezoek geweest, het verslag daarvan kun je hier vinden.
Mijn deel van de presentatie bestond uit de veranderingen in onze maatschappij die maken dat organisaties op zoeken moeten naar nieuwe organisatiemodellen. De hierarchische structuur past steeds minder bij deze tijd.

Interview met Paul Green van Morning Star

Morning Star uit California is een bedrijf in de tomaatverwerkende industrie dat in 1995 besloot alle managementlagen af te schaffen. In een eerdere blogpost beschreef ik hoe dat leidde tot een bedrijf waar geen managers rondlopen, maar alleen collega’s, en hoe het door deze aanpak de grootste werd in hun branche. Paul Green van Morning Star komt op 10 april naar Nederland om hun ervaringen en aanpak te delen. Dat is voor het eerst dat Morning Star z’n praktijkcase komt vertellen in Nederland. In dat kader hadden we een interview met hem.

Onder invloed van digitale communicatie zijn we in organisaties steeds makkelijker in staat om direct te met elkaar te communiceren. De coördinerende rol van management is daarom steeds minder nodig. Morning Star wordt internationaal gezien als één van de beste voorbeelden van een platte organisatie. Zo heeft Gary Hamel een uitgebreid artikel over Morning Star gepubliceerd in de Harvard Business Review onder de provocerende titel:First, Let’s Fire All The Managers.
Reden genoeg om Paul Green van Morning Star zelf te horen vertellen over hun aanpak. Continue reading “Interview met Paul Green van Morning Star”

van Piramides naar Pannekoeken: de Morning Star case

Morning_Star_530In het boek Social Business by Design van Dion Hinchcliffe & Peter Kim wordt uitgebreid ingegaan op de vraag hoe online media te gebruiken zijn om anders samen te werken: intern, met klanten en met partners. Waar ze in het boek niet op ingaan is of bedrijven zich ook daadwerkelijk anders zouden moeten gaan organiseren. Het hiërarchische organisatiemodel blijft dominant in de voorbeelden die genoemd worden. Maar hoe logisch is dat eigenlijk?

Er zijn steeds meer aanwijzingen dat het hiërarchische model lang niet altijd optimaal is. Ons werk uit bestaat uit een steeds groter deel kenniswerk en dus uit (digitale) informatie (zie figuur hierboven). Directe communicatie en het delen van informatie maken samenwerking over grenzen eenvoudiger. Door de explosie aan informatie (zie figuur hieronder) en de mogelijkheden van sociale filtering krijgt iedereen toegang tot de juiste informatie om beslissingen te nemen in plaats van primair het management. De hogere transparantie (digitale monitoring) maakt het werk en resultaat beter meetbaar. Continue reading “van Piramides naar Pannekoeken: de Morning Star case”

BSO and Mcluhan

Due to my renewed interest in “Pancakes” I was looking for some info in my archive (yes, the paper one…). In the past I have worked for a company called BSO, founded by Eckart Wintzen. During the years I worked there I was director of a consultancy cell (I’ll explain the term cell later on), technical manager, commercial manager and director in the electronic commerce service line before leaving the company in 1999.
Eckart was a remarkable person, sometimes a bit difficult but always inspiring and, well, very present. He developed the vision that people work best in small teams up to 50 people. And implemented this vision!
When he left in 1996 the company had more than 4000 employees but was divided in units not larger than 50 people, called a Cell (from the biological cell). When a group grew to big it was split up and half the management team and employees started a new cell in a different place. There Board was doing their best not to steer the cells directly but tried to convince. There was almost no middle management (and nobody listened to them anyway). In many ways it was a Pancake organization before the electronic means were there. This was possible because Eckart was one of the few CEO’s that did not like raw power for himself.
Anyway, while looking into my archive I found the letter below that was part of the yearly report of 1995 (the reports were always very special, this one was designed as a folding map were you put in several papers between tabs (some of you elderly people will remember them!). This letter describes (in Dutch) how the Internet is not so much about infrastructure and computers but about connecting people and was written by the director of the McLuhan program (BSO was a sponsor of this program). Quote:

Het beeld van een wereldomspannende netwerkomgeving is niet zozeer dat van een ‘snelweg’ als wel dat van een soort ‘wereldgeest’
The concept of a worldwide network is not as much about a ‘highway’ but more about some sort of world ‘conscience’.

Funny how many of these issues already came together in 1995..

Size Matters

The building of the General Motors Headquarters in the 1920's. A textbook example of the big Firm

A couple of years ago I read the book “De eeuw van mijn vader” (“My father’s century”) from Geert Mak. In this book he describes how the Dutch society has changed from 1900 to 2000. One of the passages that struck me most was his statement that the majority of people in 1900 were not an employee at a firm. Many people were self employed as sail maker, baker, carpenter and other craftsmanships. Other were employed on a temporary basis as day laborer. For many people this independence meant of course mainly insecurity and near starvation.
It did open my eyes that the big Firm as a way to organize work is something relatively recent and started around that time. Before the Firm work was done by many individual and small informal companies, afterwards much of the work is done in large companies with often an emphasis on management and control. At the same time there was the shift from mainly local transactions to global transactions.
These days we again see a move towards smaller size of companies and and more informal contacts to coordinate work. Most important example is of course the explosion of Independent Professionals. But also many examples of small companies that supply a specific service, often on a global scale, like BasecampHQ, Evernote and others. My conclusion is that the Social Media and Cloud and the themes they bring forth put pressure on the size of Firms. Big is beautiful nor efficient anymore.
In 1936 (Nobel price winner) Robert Coase wrote the artikel “The nature of the Firm”. In this (very famous and often cited) article he states that the size of a Firm is based on the difference in transaction costs between the market (buying the service) and organizing the service yourself. He describes the relation between transaction costs and size as follows. The firm grows when:

  • the less the costs of organizing and the slower these costs rise with an increase in the transactions organized.
  • the less likely the entrepreneur is to make mistakes and the smaller the increase in mistakes with an increase in the transactions organized.
  • the greater the lowering (or the less the rise) in the supply price of factors of production to firms of larger size.

Transaction costs in this are all costs associated with a transaction: communication, contracts, delivery, etc. If we compare these with the themes Scalability, Communication, Cooperation, Anyplace and Anywhere and Transparency it is clear that these themes are lowering the external transaction costs dramatically.
Scalability: the advantage of the Firm has always been that within the Firm it is easier to share resources over several activities. Now many operational costs have become variable costs in relation to turnover this advantage of size is not valid anymore. The risks of major investments in infrastructure is therefore also largely diminished. Due to the high level of automated processes there is less advantage in high volumes of purchasing
Communication and Cooperation: Finding people has become easy, contacting them has become easy and exchanging information on specifications and expectations has become easy. This means that transaction costs go down. This holds mainly for external costs since internally searching and working with people was enabled by the Firm.
Anytime, Anywhere: The Firm creates a context where it is easier to know what to expect from others and has a management structure to enforce compliance to this context. Social technology now enables us to contact everybody from everywhere at any moment. A natural advantage of the firm was that it was easier to do business within the Firm on a global scale. Now small companies can do the same in a virtual enterprise.
Transparency: We now see reputation mechanisms to build trust without previous experience with that person of service. We see reviews of previous experience of others that are similar to us. We know we are looking at the same data stored in the cloud. I know where you really are because of location based services. This transparency drives down risk immensely.
From all of the above it follows that due to social and cloud technologies Firms will shrink in size. Small will be more efficient. This also has a lot of impact on middle management whose role it was to coordinate work in the Firm. This coordinating role of management will evaporate and thereby create flatter organizations: Pancakes!

Our tools shape us

Last few weeks I have been trying to integrate a lot of ideas I have been working on in the last few years. Partly in research programs on SaaS, partly and several project around the adoptation of technology and partly from my own company. Below is the (extend) set of sheets I have made out of this. Next period I will be writing a bit about the different parts of it.