The Oticon Case: the Spaghetti organisation - Revision history

Tkokotas at 15:20, 18 December 2018

2018-12-18T15:20:42Z

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			''Developed by Fernando Lara Hoces''

	[[File:PerformanceDomains.png\|300px \| thumb\| \|'''Figure 1:''' Program Management Performance Domains. <ref name=PMI1/>]]		[[File:PerformanceDomains.png\|300px \| thumb\| \|'''Figure 1:''' Program Management Performance Domains. <ref name=PMI1/>]]
	The Spaghetti organisation was the result of a radical change that undergo the danish hearing manufacturer Oticon. When in 1988 Lars Kolind took over as the CEO, the market share of the company had dropped dramatically. That situation called for a revolution in the company in order to remain competitive. Back then, the company was up against big companies like Siemens, Philips, Sony, M3 and AT&T. It was impossible to compete against them on financial resources, technology or marketing. The only way to remain competitive was to create something that the big companies would never be able to replicate: an innovative fast-moving organisation.		The Spaghetti organisation was the result of a radical change that undergo the danish hearing manufacturer Oticon. When in 1988 Lars Kolind took over as the CEO, the market share of the company had dropped dramatically. That situation called for a revolution in the company in order to remain competitive. Back then, the company was up against big companies like Siemens, Philips, Sony, M3 and AT&T. It was impossible to compete against them on financial resources, technology or marketing. The only way to remain competitive was to create something that the big companies would never be able to replicate: an innovative fast-moving organisation.

Tkokotas at 12:51, 27 November 2018

2018-11-27T12:51:00Z

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	[[Category:Program Management]]		[[Category:Program Management]]
	[[Category:Leadership]]		[[Category:Leadership]]
			[[Category:Uncertaity]]
			[[Category:Case Studies]]

Tkokotas at 19:49, 23 October 2018

2018-10-23T19:49:43Z

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	[[Category:Program Management]]		[[Category:Program Management]]
	[[Category:Leadership]]		[[Category:Leadership]]
	~~[[Category:Program Strategy Alignment]]~~
	~~[[Category:Program Stakeholder Analysis]]~~

Jooehm at 13:18, 9 October 2015

2015-10-09T13:18:08Z

← Older revision		Revision as of 13:18, 9 October 2015
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	[[File:PerformanceDomains.png\|300px \| thumb\| \|'''Figure 1:''' ~~Project~~ Management Performance Domains. <ref name=PMI1/>]]		[[File:PerformanceDomains.png\|300px \| thumb\| \|'''Figure 1:''' Program Management Performance Domains. <ref name=PMI1/>]]
	The Spaghetti organisation was the result of a radical change that undergo the danish hearing manufacturer Oticon. When in 1988 Lars Kolind took over as the CEO, the market share of the company had dropped dramatically. That situation called for a revolution in the company in order to remain competitive. Back then, the company was up against big companies like Siemens, Philips, Sony, M3 and AT&T. It was impossible to compete against them on financial resources, technology or marketing. The only way to remain competitive was to create something that the big companies would never be able to replicate: an innovative fast-moving organisation.		The Spaghetti organisation was the result of a radical change that undergo the danish hearing manufacturer Oticon. When in 1988 Lars Kolind took over as the CEO, the market share of the company had dropped dramatically. That situation called for a revolution in the company in order to remain competitive. Back then, the company was up against big companies like Siemens, Philips, Sony, M3 and AT&T. It was impossible to compete against them on financial resources, technology or marketing. The only way to remain competitive was to create something that the big companies would never be able to replicate: an innovative fast-moving organisation.

S131882: /* Manage stakeholders expectations */

2015-09-29T04:06:28Z

Manage stakeholders expectations

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	Another important aspect when managing the stakeholders is to take into account which expectations they have. If a program negatively affects a stakeholder, it is necessary to mitigate the impact in order to maintain the stakeholders involved <ref name=PMI1/>. In that sense, it is important to make sure that stakeholders expectations are based on accurate information. Therefore, once more, it is important an effective communication.		Another important aspect when managing the stakeholders is to take into account which expectations they have. If a program negatively affects a stakeholder, it is necessary to mitigate the impact in order to maintain the stakeholders involved <ref name=PMI1/>. In that sense, it is important to make sure that stakeholders expectations are based on accurate information. Therefore, once more, it is important an effective communication.

	In the present case, one of the biggest problems of the new organisation was to remove all the job titles. This fact created two major problems within the company. First, the resistance of the senior and middle managers. Their expectations of loosing their benefits and power in the new organisation put them against the process. Frequently, during a change process, the stakeholders who don't support the change ~~used~~ to go through eight different stages: shock, anger, denial, depression, acceptance of reality, testing, consolidation and internalisation (see Figure 4). Therefore, the task of the program manager is to contain the denial phase (e.g. not negatively affect the other stakeholders) and emotionally support the stakeholders during the depression part. Lars Kolind said: “One day a former middle manager came to me to discuss (…) he openly admitted that he did not know what to do for the company.” <ref name=JOMIE/>. At that point, the former middle manager was entering in the depression phase. The duty of a good leader was to support him emotionally. Kolind made him see that he was not only a manager, but also a great specialist. That, made the middle manager decide to return to the specialist role: “He admitted that when he had been promoted to department head, the company had lost a good specialist, and gotten a bad leader in return.” <ref name=JOMIE/>. In that example, we can see how Kolind was able to influence the middle manager, affecting his beliefs and attitude towards the organisation.		In the present case, one of the biggest problems of the new organisation was to remove all the job titles. This fact created two major problems within the company. First, the resistance of the senior and middle managers. Their expectations of loosing their benefits and power in the new organisation put them against the process. Frequently, during a change process, the stakeholders who don't support the change use to go through eight different stages: shock, anger, denial, depression, acceptance of reality, testing, consolidation and internalisation (see Figure 4). Therefore, the task of the program manager is to contain the denial phase (e.g. not negatively affect the other stakeholders) and emotionally support the stakeholders during the depression part. Lars Kolind said: “One day a former middle manager came to me to discuss (…) he openly admitted that he did not know what to do for the company.” <ref name=JOMIE/>. At that point, the former middle manager was entering in the depression phase. The duty of a good leader was to support him emotionally. Kolind made him see that he was not only a manager, but also a great specialist. That, made the middle manager decide to return to the specialist role: “He admitted that when he had been promoted to department head, the company had lost a good specialist, and gotten a bad leader in return.” <ref name=JOMIE/>. In that example, we can see how Kolind was able to influence the middle manager, affecting his beliefs and attitude towards the organisation.
	Apart from the resistance of the middle managers, another problem arose. Some people felt frustrated because it was not possible to get promoted in the organisation <ref>[Henrik Holt Larsen (2003).''Oticon: Unorthodox Project-Based Management and Careers in a "Spaghetti Organization"''.Institut of Organization and Industrial Sociology. Copenhagen Business School </ref>. The fact of not having job titles made impossible to get promoted. The salary was fixed according to the contribution of each individual to the organisation. That extreme competitiveness made some employees not to feel comfortable. Even thought there was not a formal hierarchy, a “natural hierarchy” was created as some projects were more successful than others and some groups were more productive. In that case, Kolind couldn’t do anything, as this problem was a collateral effect of the same nature of the organisation.		Apart from the resistance of the middle managers, another problem arose. Some people felt frustrated because it was not possible to get promoted in the organisation <ref>[Henrik Holt Larsen (2003).''Oticon: Unorthodox Project-Based Management and Careers in a "Spaghetti Organization"''.Institut of Organization and Industrial Sociology. Copenhagen Business School </ref>. The fact of not having job titles made impossible to get promoted. The salary was fixed according to the contribution of each individual to the organisation. That extreme competitiveness made some employees not to feel comfortable. Even thought there was not a formal hierarchy, a “natural hierarchy” was created as some projects were more successful than others and some groups were more productive. In that case, Kolind couldn’t do anything, as this problem was a collateral effect of the same nature of the organisation.

S131882: /* Engage Program Stakeholders */

2015-09-29T04:03:06Z

Engage Program Stakeholders

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	Then, it was necessary to plan how engage and manage the different individuals involved. At that point, the most critical point was to create a clear shared vision with all the stakeholders. Until then, the vision of the company was "leaders in hearing technology". When the change started, the vision became "helping people (with impaired hearing) to live as they wish with the hearing they have" <ref name="JOMIE">"Lars Kolind. ''The second Cycle. Winning the War Against Burecracy'', Wharton School Publishing.</ref>. This motto and putting the new focus on the hearing care profesional instead of the end user created a clear and common vision.		Then, it was necessary to plan how engage and manage the different individuals involved. At that point, the most critical point was to create a clear shared vision with all the stakeholders. Until then, the vision of the company was "leaders in hearing technology". When the change started, the vision became "helping people (with impaired hearing) to live as they wish with the hearing they have" <ref name="JOMIE">"Lars Kolind. ''The second Cycle. Winning the War Against Burecracy'', Wharton School Publishing.</ref>. This motto and putting the new focus on the hearing care profesional instead of the end user created a clear and common vision.

	Apart from the vision, another aspect to take into account while dealing with the stakeholders engagement is the communication. Within a company, several channels are used, but only one message is wanted to be transmitted. That's why is important to plan ~~the~~ how to transmit the message. The strategy used by Kolind was to send a newsletter titled "Think the Unthinkable" <ref name=JOMIE/> explaining all the different changes he wanted to perform. Some days after, a meeting with all the employees took place. It aimed to clarify all the possible doubts they had. Anyone was obliged to go, but almost everyone went. He explained the idea and, in order to involve the employees in the process, he let them vote who wanted to be part of the project. Most of the audience respond positively. They were engaged in the change process. This commitment was crucial in further situations. For instance, due to the lack of financial resources, the company gave the option to the employees to invest money in the company. The first who invested was Lars Kolind<ref name=JOMIE/>, fact that increased even more the commitment among the other employees. Kolind embraced this practice <ref name=”LOO” group="footnotes">[ ''You don’t lead by pointing and telling people some place to go. You lead by going to that place and making a case.''		Apart from the vision, another aspect to take into account while dealing with the stakeholders engagement is the communication. Within a company, several channels are used, but only one message is wanted to be transmitted. That's why is important to plan how to transmit the message. The strategy used by Kolind was to send a newsletter titled "Think the Unthinkable" <ref name=JOMIE/> explaining all the different changes he wanted to perform. Some days after, a meeting with all the employees took place. It aimed to clarify all the possible doubts they had. Anyone was obliged to go, but almost everyone went. He explained the idea and, in order to involve the employees in the process, he let them vote who wanted to be part of the project. Most of the audience respond positively. They were engaged in the change process. This commitment was crucial in further situations. For instance, due to the lack of financial resources, the company gave the option to the employees to invest money in the company. The first who invested was Lars Kolind<ref name=JOMIE/>, fact that increased even more the commitment among the other employees. Kolind embraced this practice <ref name=”LOO” group="footnotes">[ ''You don’t lead by pointing and telling people some place to go. You lead by going to that place and making a case.''
	—Ken Kesey]</ref> in further situations. For example, as any employee of the company had an office, he did not have one neither <ref name=JOMIE/>.		—Ken Kesey]</ref> in further situations. For example, as any employee of the company had an office, he did not have one neither <ref name=JOMIE/>.

S131882: /* Engage Program Stakeholders */

2015-09-29T04:00:09Z

Engage Program Stakeholders

← Older revision		Revision as of 04:00, 29 September 2015
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	===Engage Program Stakeholders===		===Engage Program Stakeholders===

	Then, it was necessary to plan how engage and manage the different individuals involved. At that point, the most critical point was to create a clear shared vision with all the stakeholders. Until then, the vision of the company was "leaders in hearing technology". When the change started, the vision became "helping people (with impaired hearing) to live as they wish with the hearing they have <ref name="JOMIE">"Lars Kolind. ''The second Cycle. Winning the War Against Burecracy'', Wharton School Publishing.</ref>. This motto and putting the new focus on the hearing care profesional instead of the end user created a clear and common vision.		Then, it was necessary to plan how engage and manage the different individuals involved. At that point, the most critical point was to create a clear shared vision with all the stakeholders. Until then, the vision of the company was "leaders in hearing technology". When the change started, the vision became "helping people (with impaired hearing) to live as they wish with the hearing they have" <ref name="JOMIE">"Lars Kolind. ''The second Cycle. Winning the War Against Burecracy'', Wharton School Publishing.</ref>. This motto and putting the new focus on the hearing care profesional instead of the end user created a clear and common vision.

	Apart from the vision, another aspect to take into account while dealing with the stakeholders engagement is the communication. Within a company, several channels are used, but only one message is wanted to be transmitted. That's why is important to plan the how to transmit the message. The strategy used by Kolind was to send a newsletter titled "Think the Unthinkable" <ref name=JOMIE/> explaining all the different changes he wanted to perform. Some days after, a meeting with all the employees took place. It aimed to clarify all the possible doubts they had. Anyone was obliged to go, but almost everyone went. He explained the idea and, in order to involve the employees in the process, he let them vote who wanted to be part of the project. Most of the audience respond positively. They were engaged in the change process. This commitment was crucial in further situations. For instance, due to the lack of financial resources, the company gave the option to the employees to invest money in the company. The first who invested was Lars Kolind<ref name=JOMIE/>, fact that increased even more the commitment among the other employees. Kolind embraced this practice <ref name=”LOO” group="footnotes">[ ''You don’t lead by pointing and telling people some place to go. You lead by going to that place and making a case.''		Apart from the vision, another aspect to take into account while dealing with the stakeholders engagement is the communication. Within a company, several channels are used, but only one message is wanted to be transmitted. That's why is important to plan the how to transmit the message. The strategy used by Kolind was to send a newsletter titled "Think the Unthinkable" <ref name=JOMIE/> explaining all the different changes he wanted to perform. Some days after, a meeting with all the employees took place. It aimed to clarify all the possible doubts they had. Anyone was obliged to go, but almost everyone went. He explained the idea and, in order to involve the employees in the process, he let them vote who wanted to be part of the project. Most of the audience respond positively. They were engaged in the change process. This commitment was crucial in further situations. For instance, due to the lack of financial resources, the company gave the option to the employees to invest money in the company. The first who invested was Lars Kolind<ref name=JOMIE/>, fact that increased even more the commitment among the other employees. Kolind embraced this practice <ref name=”LOO” group="footnotes">[ ''You don’t lead by pointing and telling people some place to go. You lead by going to that place and making a case.''

S131882: /* Identify Program Stakeholders */

2015-09-29T03:59:00Z

Identify Program Stakeholders

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	===Identify Program Stakeholders===		===Identify Program Stakeholders===

	During his first years as CEO, he met several clients in order to understand their concerns and what was their idea of Oticon. That was crucial to set an effective goal that lead Oticon to became the leader of hearing aids. Moreover, he met with internal stakeholders as managers and employees of different departments. He asked them what they thought was the vision of the company and why they ~~think~~ the company was in such trouble<ref name=JOMIE/>. That was useful to understand the misunderstanding inside the company and later align the different departments with the strategy of the company. Finally, he also figured out which ones where the relations between the different departments and what was each department exactly doing.		During his first years as CEO, he met several clients in order to understand their concerns and what was their idea of Oticon. That was crucial to set an effective goal that lead Oticon to became the leader of hearing aids. Moreover, he met with internal stakeholders as managers and employees of different departments. He asked them what they thought was the vision of the company and why they thought the company was in such trouble<ref name=JOMIE/>. That was useful to understand the misunderstanding inside the company and later align the different departments with the strategy of the company. Finally, he also figured out which ones where the relations between the different departments and what was each department exactly doing.

	===Engage Program Stakeholders===		===Engage Program Stakeholders===

S131882: /* Identify Program Stakeholders */

2015-09-29T03:58:00Z

Identify Program Stakeholders

← Older revision		Revision as of 03:58, 29 September 2015
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	===Identify Program Stakeholders===		===Identify Program Stakeholders===

	During his first years as CEO, he met several clients in order to understand their concerns and what was their idea of Oticon. Moreover, he met with internal stakeholders as managers and employees of different departments. He asked them what they thought was the vision of the company and why they think the company was in such trouble<ref name=JOMIE/>. He also figured out which ones where the relations between the different departments and what was each department exactly doing~~. The identification of stakeholders was done~~.		During his first years as CEO, he met several clients in order to understand their concerns and what was their idea of Oticon. That was crucial to set an effective goal that lead Oticon to became the leader of hearing aids. Moreover, he met with internal stakeholders as managers and employees of different departments. He asked them what they thought was the vision of the company and why they think the company was in such trouble<ref name=JOMIE/>. That was useful to understand the misunderstanding inside the company and later align the different departments with the strategy of the company. Finally, he also figured out which ones where the relations between the different departments and what was each department exactly doing.

	===Engage Program Stakeholders===		===Engage Program Stakeholders===

S131882: /* Stakeholder management */

2015-09-29T03:53:02Z

Stakeholder management

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	[[File:Program stakeholder engagement.png \| 300px \| thumb\| \|'''Figure 4:''' Program stakeholder management <ref name=PMI1/>]]		[[File:Program stakeholder engagement.png \| 300px \| thumb\| \|'''Figure 4:''' Program stakeholder management <ref name=PMI1/>]]

	Stakeholder management is an important factor to take into account in every organisational change. It is necessary to identify which stakeholders will be affected and evaluate what's their degree of commitment and their power. To increase ~~the~~ commitment, the program manager must communicate a clear vision of the need of change to all the individuals affected. He must set clear goals, see when is necessary the change, plan the change, monitor the change and manage the people issues along the change<ref name="PMI1">[http://proquestcombo.safaribooksonline.com.proxy.findit.dtu.dk/9781933890524/228#X2ludGVybmFsX0J2ZGVwRmxhc2hSZWFkZXI/eG1saWQ9OTc4MTkzMzg5MDUyNC8yMzI=/Project Managment Institute(2008), ''The Standard for Program Management'', PMI Publications, 2nd ed, Pennsylvania: , pg 227-241 ]</ref>. As it can be seen in Figure 4, the Stakeholder management can be divided in three steps: identification, engagement and management of expectations. One of the key factors of the success of the change process of Oticon was that Kolind followed those steps.		Stakeholder management is an important factor to take into account in every organisational change. It is necessary to identify which stakeholders will be affected and evaluate what's their degree of commitment and their power. To increase their commitment, the program manager must communicate a clear vision of the need of change to all the individuals affected. He must set clear goals, see when is necessary the change, plan the change, monitor the change and manage the people issues along the change<ref name="PMI1">[http://proquestcombo.safaribooksonline.com.proxy.findit.dtu.dk/9781933890524/228#X2ludGVybmFsX0J2ZGVwRmxhc2hSZWFkZXI/eG1saWQ9OTc4MTkzMzg5MDUyNC8yMzI=/Project Managment Institute(2008), ''The Standard for Program Management'', PMI Publications, 2nd ed, Pennsylvania: , pg 227-241 ]</ref>. As it can be seen in Figure 4, the Stakeholder management can be divided in three steps: identification, engagement and management of expectations. One of the key factors of the success of the change process of Oticon was that Kolind followed those steps.

	===Identify Program Stakeholders===		===Identify Program Stakeholders===