In the past decades, countless attempts were made to introduce a more humane and flexible form of organising in bureaucratic organisations. Companies like DuPont, Cisco, Scott-Bader, Rolls Royce, Shell, Herman Miller, ABB and BSO deliberately experimented with other forms of organising. Although some of those organisations were successfully transformed and are still being run non-bureaucratically, such as the Brazilian company Semco, the American Gore & Associates and the French company FAVI, most of the changes have been diluted or reversed with time, either through mergers with other companies, leadership changes or as a result of other factors. Why is it, that so many attempts to make bureaucracy more humane and more flexible have failed? And how can innovative forms of organising be realised successfully?

Bureaucracy absorbs
One explanation given by Parker (2002) is that large bureaucratic organisations are quite successful at incorporating criticism and change activities (by developing a coaching leadership style, for example), but essentially stick to the principles of bureaucracy, such as topdown control, unequivocal rules and extrinsic motivation. Such organisations ‘absorb’ innovations to be able to control them.. Instead of loosening the hierarchy, attempts at participatory management have even led to more bureaucracy, since the gap between the operational staff, still directed in an authoritarian fashion, and highly educated staff who had rather more say, just became wider. Some organisations, such as General Motors, did decide in favour of decentralisation but not with he intention of creating a more humane organisation: the environment had become so unpredictable that employees who were close to the customer simply needed to have more autonomy to make the right decisions.

Partial change
Another explanation for the failure of many initiatives for change is that they were focused on a single aspect, for example the creation of a more humane working environment, or a more democratic form of decision-making. Even if the structure could be adjusted there were other factors, such as management habits, that turned out to be extremely difficult to change. Rolls Royce in England was a pioneer in self-directing teams; after a while, however, the teams would revert to the old ‘command and control’ style. According to Kuipers (2011), most attempts at organisational change lack integral perspective. A change that focuses on only a few factors, such as the organisational structure or HRM procedures, without a resulting change in management processes and other factors, will fail sooner or later. Yet another explanation lies in the organisational concepts used. Perhaps ambitious changers see organisations too much as machines, with individual cogs and wheels that can be exchanged without changing the rest of the machine. By contrast, if you see an organisation as a living organism, it is evident that an intervention in decision-making processes or the structure will always have implications for other aspects of the organisation. From a systemic perception, an organisation can be seen as an integrated and self-enhancing community.

Complementarity
Researchers Paul Milgrom en John Roberts (1995) studied innovative forms of organising and came to the conclusion that these are successful only if the entire system is transformed coherently. Their so-called ‘complementarity theory’ is based on a mutual exchange and interdependency between technical, organisational and other factors. Complementarities refer to mutually enhancing effects between different factors when these are tackled all at the same time and coherently. The effect of more control for employees in operational matters, for example, is enhanced when at the same time, more direction is given in regard to strategic objectives. According to this theory there is complementarity between activities in an organisation if enhancing one activity will result in a necessity to enhance others. According to this theory, an innovative change like the reduction of management layers will only result in better performance if other changes are taking place a the same time. The researchers claim that if such changes are implemented in isolation, this may even lead to a decrease in performance.

An organisation like IKEA has a high degree of complementarity, i.e. procurement and storage, products, customer service and distribution systems are all coordinated. Since all aspects are mutually connected and coordinated this success formula is hard to copy by other companies. A company wishing to copy the distribution system but no other aspects of operational management should not count on better results, according to Milgrom and Roberts.

Negative effects
In the early nineties a large-scale survey was conducted into innovative ways of organising, by researchers grouped around Andrew Pettigrew (Warwick Business School). The survey shows that, when structures, processes and organisational boundaries are changed simultaneously and together, this will result in much improved performance. If only the structure or processes are changed, or only processes and organisational boundaries, performance remains the same or even deteriorates. There are only a few exceptions, such as the facilitation of horizontal networks, which can result in improved performance when made in isolation. By contrast, the isolated implementation of a project structure will result in deteriorating performance in all cases.
Incidentally, the researchers point out that there is a ‘J curve’ effect: when new structure, processes and organisational boundaries are introduced, performance first deteriorates a little and improves only in the somewhat longer term.

What’s new?
The conclusion that organisational change is successful only if various organisational factors are adjusted coherently seems rather obvious. However, I have met many organisations that nevertheless ‘forget’ some factors. An educational institution implemented team structure, for example, and introduced various activities to achieve a more cooperative culture – yet remuneration remained based on individual performance. A health care institution introduced self-directing teams but left the management positions unchanged. A technical company decentralised decisionmaking but did not formulate clear objectives and boundaries. Siggelkow (2001) illustrates how American women’s fashion company Liz Claiborne, which was extremely successful in the eighties, was confronted with declining growth and margins in the early nineties. Year after year, management introduced ad hoc changes that had no effect at all or actually made things worse. In 1994, a new CEO came on board who devised a completely new system, from a new mission and strategy up to and including a revised structure and different management processes. Finally, performance went up.

What does this mean?
A new, innovative form of organising is not a matter of implementing a team structure or decentralising responsibilities. It is about coordinating several changes at the same time, in their mutual dependency. This requires a considerable investment in time, patience and perseverance. In addition, such a transformation requires strong central direction by a leader (or a group of leaders) with a systemic perspective on the organisation. It also requires the ability of management to stay focused on a long-term vision and to engage in and coordinate several interdependent developments at the same time. Such a process implicates, among other things, that leaders who succeed each other must continue to work in the same philosophy, instead of trying to invent their own wheel each time.

In March 1990, then-top man of BP, Robert Hornton, launched Project 1990 with the purpose of reducing complexity in the company, redesigning the central organisation and repositioning the company for the 90s. From the top, a new vision was formulated (‘The most successful oil company of the nineties’), a new strategy designed and the structure adjusted. Non-core activities were sold. Large-scale training programmes were introduced and the assessment and remuneration systems adjusted to the new vision and values. Although not all facets were given equal attention at the same time, there did seem to be complementary change. However, results were so disappointing that Hornton was asked to resign in June 1992. What went wrong?Researchers Pettigrew and Whittington concluded that the link between the vision and the organisational changes was not clear for employees and that there was a gap between the authoritarian way in which Hornton wanted to realise his ambitions, and the propagated values of openness and empowerment. It was precisely his drive that got in the way of a fundamental dialogue about the strategy. Hornton thought systemically, but did not act consistently in line with this thinking. His successor David Simon stuck to the path the company had started on, but simplified the vision to the slogan PRT (“performance, reputation and team work”). By the time his successor John Browne came on board company performance was going up, a trend that was further enhanced in the years that followed. Browne divided the company into smaller business units, each responsible for its own profit and loss. At the same time, he strengthened the central organisation with knowledge groups, leadership conferences and a joint IT infrastructure. More than his predecessors, Browne had an eye for strategy and gave the company a renewed position in the oil industry. Browne both thought and acted in a systemic way. Source: A. Pettigrew en R. Whittington (2003)

Lessons

• Start with a mission. A new form of organisation comprises more than just adjusting the organisational structure. It starts with the question where the organisation is going (the mission). All the facets of the organisation are to be designed and arranged in the light of that mission.
• Work with pilots. In a large organisation, it is often difficult to change all facets at once. If you untie one string, the whole network unravels. So start with one business unit but be rigorous there.
• Decentralise and centralise at the same time. When staff are given more say in the operational process the focus of the central organisation should not continue to be on managing these processes. It is actually the strategic focus that should be enhanced, the mission, vision and goals must be clear, and the boundaries of the playing field clearly demarcated. Quality criteria and standards must be clear to everyone.
• The long run. Be prepared (and possibly prepare board and/or shareholders) for results to deteriorate before they improve. Some time will pass before all system variables have joined and fitted into a new cohesive whole.  
• Shared leadership. It is near to impossible for a single person to survey all facets of an organisational transition. Because of this, you must work closely together in the Board of directors or management team, and ask each other critical questions about how the organisational facets fit in together.
  

Sources
Kuiper, H.; van Amelsvoort, P. van; Kramer, E.H. (2010) Het Nieuwe Organiseren. Alternatieven voor de bureaucratie. Leuven/Den Haag: uitgeverij Acco.

Milgrom, P. & Roberts, J. (1995) ‘Complementarities and fit: strategy, structure and organizational change in manufacturing’, Journal of Accounting and Economics, 19 (2/3):179-208.

Parker, M. (2002) Against management Cambridge: Polity Press/Blackwell Publishers.

Pettigrew, A. & Whittington, R. ‘Complementarities in Action: Organizational change and Performance in BP and Unilever’ 1985-2002. In Pettigrew, A. Et al. (eds.) (2003) Innovative forms of organizing.  London: Sage Publications.

Siggelkow, N. (2001) ‘Change in the presence of fit: the rise and fall, and the renaissance of Liz Claiborne’, Academy of Management Journal, 44 (4): 838-57.

This is a translation of the article that was first published on www.managementsite.nl

While very soon all babyboomers will  leave the labour market en masse, generation Y will make its entrance to the workplace. This generation grew up with the Internet and is used to global connections and limitless access to knowledge and information. The young people of this generation work independently and identify more with their network than with the company they work for.

The arrival of this new generation workers urges a different kind of leadership: leiderschap 2.0. There is a need for people who know how to influence others in a network of relations with independent professionals.

Such leaders inspire others with their ideas and vision. They want to make a difference and create a sustainable, yet flexible organization. They lead from trust. These leaders facilitate connections and intercations, they are connectors rather than decisionmakers. Their openness sets an example for a transparant culture. They give priority to what really matters and make use of technological possibilities to realize that in a simple and cost effective way.

These new leaders attract others because they have shown to be followers themselves.

I believe everyone is inspired, although some people do have troubled souls. They feel oppressed by the expectations of others, by bad experiences or a lack of material security. Everyone who has the courage to listen to their heart can organise life from the deepest cravings of their soul.

How inspired are you?

First check at what times you are hardly or not at all inspired. Evoke images of situations for which you have little enthusiasm or from which you get hardly any pleasure. These can occur in your family or relationships but also in your job or in you hobbies and friendships. Then, ask yourself:

- by what are you really led at times like that?

- what is it that puts pressure on your inspiration?

- how do you notice that your passion fades?

- what changes in your life have led to the disappearance of inspiration?

Now, check at what times you are passionate or become inspired. You can do this by writing it down, but also by visualisation. You could pick up paper and coloured pencils and draw the moments that inspire you. Feel the difference with situations in which you are not, or less inspired. Then, think about the following questions:

- how many hours a week do you spend doing things that actually inspire you?

- was that inspiration always there?

- what did you need to do or not do to make space for that inspiration?

- what do others notice of your inspiration?

We live in an exciting time. Much is going on in organisations. The old paradigm of control & command is giving way to new forms of organizing. New principles like trust, horizontal cooperation, transparency and sharing knowledge result in new structures and forms of organization. The emphasis is shifting to a passion for execution. Leadership and entrepreneurial spirit are needed throughout the organization.

This transition is quite a challenge for organizations with a classical structure. They have to develop something new without closing up shop. Nor are these mere cosmetic changes: an essentially different way of thinking is concerned.

New organisational principles

I am fascinated by new forms of organizing that are developing as we speak, for example as a result of generation Y coming onto the shop floor and through the arrival of interactive and social media.

My research targets three questions:

* What new underlying organization principles are developing?

* What forms of expression of these do we see in companies and organizations today?

* How can organisations make the transition from classical organizational principles to new forms of organization?

On my other website, www.hetnieuweorganiseren.org, I report on my research. On that website I gather examples of companies with innovative structures, drawing conclusions for traditional organisations from these in my blog. I discuss relevant publications and offer summaries of other studies. The site also has inspiring footage and links on this topic.

I invite you to take a look at this site and become inspired about new forms of organization. The site is interactive: you can respond to the blog posts, contribute information and business cases, join discussion forums and leave recommendations for books to read and films to see.

The paper starts by describing the concept of spirit in organisations and leadership, the vital strength and life force of an organisation. The author points to paradox as a vital source of spirit in an organisation. Organisations that welcome contradictory forces, wrestle with them and find pathways that are not obvious, appeal to the vitality of their co-workers. They call for creativity and commitment. It is in such places that the wisdom and experience of all people are called upon.

The author distinguishes it from dilemma and polarities and sketches the implications of paradoxical thinking for leadership and leadership training. The author illustrates the use of paradox in a major leadership programme. Through training leaders learn to deal with the complexity in and around their organisation and develop an awareness of unity at a deep level, which allows them to lead their organisation from wholeness.

Read the paper

A calling, or vocation is not something enlightened.To me, working from a vocation means doing a job that suits your character, personality and unique qualities. We deliver quality in work if our unique individuality is on par with our competences and ambitions. Is this possible within an organisation? What does this require from an executive?

This essay provides guidelines for finding a balance between vocation, that which wants to unfold in people, and profession, the competence to act adequately in professional situations. If we can find this balance, quality is an obvious and natural result.

Read the essay

But what does it mean to be an inspiring leader? Some theories claim that inspiring leaders are excellent speakers, people who convince by using appealing images and eloquent language (Gardner, 1995)  Other theories say that inspiring leaders are driven by a strong vision. They work actively towards their goals and deal with barriers in an optimistic and energetic way (Spitzer, 2000) According to Vaill (2000), inspiring leaders concentrate on the process of purposing : giving meaning to the circumstances and events at work.

Inspired leaders look for other ways to have people commit themselves to their work. Rather than focussing on inventing techniques these leaders protect and foster working conditions that allow employees to be inspired in their job.

This article examines ways in which leaders can foster the already existing motivation of employees.

Read more