Heikki Hirvonen: Organizational philosophy @ TEDx AaltoUniversityOnTracks

OrganizationalPhilosophy
Key factor to maintainsuccess
Heikki Hirvonen

WillHutton, The Observer: ModernCapitalism is at moraldeadend..
Chiefexecutivesmaketoomuch money
47 timesavg. workerpay in 2000, 81 times in 2010
And havelostsight of what’simportant
Ove Arup: excessivepersonalpaydivideratherthanunitecompanies – dividedorg. Collapse
John Lewis: Differences of rewardmustbelargeenough to encourage to perform, butpresentdifferencesaretoogreat (in 1957)
Arup, Lewis: Firmsaremoralenterprises, point of profitserves the business purpose of the firm

ProfessorJeffreyPfeffer (Stanford)in Newsweek
American business practicesaregoing to the wrongdirections
Companiesweakenthemselvesbyfiringpeople as problemsolving
Workmoralegoesdown, harder to hire new people
After 9/11 americanairlinesfired a lot of people
ExceptSouthwest - no peoplefired in 40 years*
Nowbiggestairline in U.S. and doeswellunlikeothers
Employeeswellmotivated, strongcompanyspirit
* due to productivityorefficiencyreasons

John Hagel III, John Brown, Lang Davison: AreallemployeesKnowledgeWorkers?
Executivesidentify the talent in theirfirm
Top tiers of management and knowledgeworkers
When the focus is in knowledgeworkers, the sight in rutinizedjobimprovization is lost
Fasttalent and performanceimprovementhasbeenmeasured in outsourcedjobs
Callcenters and manufacturing in India and China
Whenworkersarepart of firmsthatviewthem as core to createvalue, verycreatingproblemsolving
Japanese Auto manufacturersseeemployees as knowledgeworkers and problemsolvers

Jim Collins: How the mightfall: And WhySomeCompaniesNeverGive In
The fall of mostsuccesfulcompaniesstartsfrom the success and escalates in fivesteps
Step 1: arrogance in top management
Step 2: trying to grow to areaswherethere’s no competenceand forgetting the core business
Step 3: badsignals, butcompanystilldoes OK
Top management blames the environment
Step 4: problemsarise- new management
changemanagerstry to find a ”silverbullet”
Step 5: Managers and employeeslosefate
Company is ruined
According to Collins, this is whathappened to GM

ResilientPhilosophy
WasedaUniversitylecturerNaoshiTakatsuhad a coursenamedcreatingvalue in business
Some main pointsfrom the course
Onlycompanieswithresilientphilosphyprevail in the long run (Checkforture 500 from the 70’s)
Philosophyhas to behighergoalthanprofits
Philosophy and itspurposehas to beactivelystrengthened and communicated
Philosophywillunite the company, and keepit in the righttracks

Conclusion
I donotknow
the rightlevel of compensation for top executives
whenit is the rightdecision to firepeople
whenclassification of employees is beneficial
How to recognize a downfall for a companyhasstarted
But I dobelieve
Thatorganizationhashugeproblemsifitsdivided
Thatbestresultsareachievedwheneverybody in the organization is trying to achieve a common goal
Thatthiscanbeachievedbystrongorganizationalphilosophy
And thatthisappliesalso to otherorganizationsthan just companies, i.e. Universities

Itsnotabout the What, itsabout the Why and How!
Thankyou!

Heikki Hirvonen: Organizational philosophy @ TEDx AaltoUniversityOnTracks

by Aalto on Tracks on Jun 05, 2010

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Heikki Hirvonen: Organizational philosophy @ TEDx AaltoUniversityOnTracks — Presentation Transcript