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Find the Best Deals on Oticon Hearing Aids Prices

  1. 1. Rethinking manageme nt’s first principlesOticon Hearing Aids Prices We could never beat them on technology, so we had to find something that we could do in a unique fashion. That led me to believe that if we could design a uniquely innovative, fast moving, efficient organization, then this is something they could never replicate.” Kolind‟s response to this problem was a radical new organizational model with no formal hierarchical reporting relationships, a resource allocation system built around self-organized project teams, and an entirely open-plan physical layout. He called it the spaghetti organization, to symbolize the organicOticon Delta Oticon, the Danish hearing aid technology and non-formal structure he was trying to create. company, was a world leader in behind the ear Inspirational strands hearing aids in the 1970s but by the 1980s its In his concept of the perfect corporate organization, market share began to decline, as people moved Kolind placed the interaction, collaboration, and to „in the ear‟ models. By 1987, the company‟s connectivity of people, customers, suppliers, and market share had dropped from 15 to seven per ideas at the company‟s heart. Kolind called it “a cent and it was starting to lose money. Lars Kolind spaghetti organization of rich strands in a chaotic took over as CEO at Oticon in 1988 to turn its network”. The key characteristics of a spaghetti performance around. organization are choice (staff initiate projects and A former management consultant and associate assemble teams; individuals invited to join a project Professor at Copenhagen University, Kolind can decline); multiple roles (the project approach embarked on a classic turnaround strategy: creates multi-disciplined individuals); and he pared the company down, shed staff and transparency (knowledge is shared throughout the improved efficiency. And he re-focused the organization). The organization is knowledge based business on its key markets. By 1989, the and is driven internally by free market forces. medicine seemed to be working and Oticon Kolind got his inspiration for this new model from returned to profit. But Kolind knew that the his deep involvement in the scouting movement: changes were not enough. “It was clear that we “The scouting movement has a strong volunteer could not survive over the next five years without aspect, and whenever scouts come together, they taking a radical step” he remembers. “Where was cooperate effecti vel y together without hierarchy. our competitive edge? Nowhere.” There is no game-playing, no intrigue; we are one “It was at that point that we reached a sort of family brought together through common goals. breakpoint. I realized the competitive situation was M y experiences in scouting led me to focus on extremely difficult becaus e we were up against all defining a clear „meaning‟ for Oticon employees, the big boys you can imagine – Siemens, Philips, something beyond just making money, and to Sony, 3M , and AT&T. M y analysis was that we build a system that encouraged volunteerism could never beat them in financial resources; we and self-motivation.” could never beat them at marketing or on brand becaus e they all had fantastic brands. Ne w frontie rs Tomorrow‟s management innovation today 15
  2. 2. Rethinking manageme nt’s first principles > Oticon “I was inspired by frustrations in former jobs”, he “My thinking went like this. If Oticon was to says, looking back. “M anagement seldom made compete with a serious competitor like Siemens, a positive contribution to the development of the we had to do something radically different. You business. Too much control; too little spirit, joy can‟t just do it 10 percent different. You have to or inspiration.” do it radically different and use your imagination, gut feeling, whatever it is, and hope it will work. So I was aware that I couldn‟t simply read the same books as the MBAs at Siemens. I had to find “I was aware that I couldn‟t simply read the same something that was unique and better.” books as the MBAs at Siemens. I had to find Kolind‟s first challenge in implementing these ideas something that was unique and better.” was to persuade the owners of the company (primarily a foundation) that a radical change was necessary to confront the challenge posed by its giant competitors. Once that had been achieved If scouting was the inspiration for collaboration, he embarked on a massive internal selling program Kolind says there was another important inspiration to explain the nature of his proposed changes to -- the desire to create a radically new physical the employees. design for the Oticon workplace. “I had a vision On New Year‟s Day 1990, he produced his that we would work according to a common goal, manifesto for change: it was to be nothing short and we would empower the staff to the maximum of a revolution. In future, he believed a company‟s level. I knew that management innovation was success would be increasingly reliant upon the name of the game although we didn‟t use that creating the right working environment - one where word at that time. I knew intuitively that innovation employees behaved as individuals rather than part would take place if we let people with different of a large organization. Inevitably there were some backgrounds work together and inspire each other; employees who chose to leave because they were So that the engineers and the marketing people not comfortable with his changes, but most were and the accountants got to inspire each other. quick to see the benefits, and became involved in Therefore I broke down the walls. implementing the transition. “At this time, many companies were actually moving away from open plan offices. They had Spaghetti in action done open plan offices in the seventies and So how does the spaghetti organization work? Any eighties because that was the fashion. But they individual who comes up with a good idea is free were actually moving back becaus e they said to assemble a team and act as project leader. people were disturbing each other so much. M y Each project, however, then has to compete with thinking was different. I said OK, we want the all the other projects trying to get off the ground at open office becaus e we want everybody to disturb any time. In true Darwinian fashion, an employee each other -- with relevant input. And the way to must attract sufficient resources and support for make the input relevant is by getting people to his or her project or it will perish. move and sit together with those people that they At times, there are up to 100 projects on the go, should be disturbing. That‟s why we took away the forming and disbanding as tasks are started or paper and established this open, flexible office. completed. Individuals invariably contribute to16
  3. 3. Rethinking manageme nt’s first principles > Oticonmore than one project at a time. Key to freeing up At that point many observers thought thethe way people think and work is Oticon‟s mobile revolution had gone far enough, but not system. Employees carry their office with By the end of 1995, he sensed that somethingthem wherever they go at Oticon‟s headquarters . wasn‟t right. It had been a hard year, withDesks are not allocated; instead workers use the company almost exclusively focused onthe nearest available workstation , rolling their developing and releasing a new line of digitalpersonal Rullemaries – Rolling M arys or mobile hearing aids. The new products epitomized thecarts – around the hardwood floor to wherever breakthrough culture. The problem was that thethey need to be in the building. temporary teams created to push them through had assumed an air of permanence.Each mobile cart holds up to 30 hanging foldersand other office paraphernalia. The caddy is The dis-organized company was becomingmounted on wheels and trundled around the dangerously organized. Kolind‟s solution was tooffice as the employee travels from team to team “explode Oticon in a new direction”. Projects werethroughout the day. re-arranged geographically within the building. He described the result as “total chaos” – preciselyAnd then there‟s the paperless office concept what he was looking for. As he reflected: “Tofor which the company is famous. Paper is all keep a company alive, one of the jobs of topbut outlawed from the organization. Incoming management is to keep it disorganized.”mail is scanned into the company‟s computersystem before being shredded. Some important When Lars Kolind stepped down from Oticon indocuments – legal documents and reports, for 1998 he left it in a strong competitive position. Andexample – may be kept for a few days or longer, notwithstanding the inevitable changes , and thebut the majority of paper is shredded within hours shift to new premises, the company stayed loyal toof arriving. the values and principles Kolind put in place. Oticon continues to lead the hearing aid market,The shredder is connected to a transparent chute with double-digit growth and industry- leadingwhich passes through the company cafeteria returns throughout the 1990s and into the newdirectly below, allowing workers on breaks to a satisfying stream of falling paper onits way to the recycling bins. Kolind estimatesthat the new way of working reduced circulating Resourcespaperwork by 80 per cent. Kolind, L. 2006. „The Second Cycle: Winning the war against bureaucracy‟. Wharton School Publishing.Validation Foss, N. J. 2003. „Selective intervention and internalThe new way of working seems to work. During hybrids: Interpreting and learning from the risethe recession of the early 1990s, Oticon‟s industry and decline of the Oticon spaghetti organization‟.experienced some of the toughest trading Organization Science 14: 331-349.conditions in its history. During those dark days, Lovas, B., & Ghoshal, S. 2000. „Strategy as guidedhowever, Oticon proved the exception to the rule. evolution‟. Strategic Management Journal 21: 875-896.In 1995, it published figures showing revenues of$160 million and operating profits of $20 million– an increase of 100 per cent on revenue and aten-fold increase in profits on the figures for 1990. Ne w frontie rs Tomorrow‟s management innovation today 17