Why power to the people is not such a stupid idea

One of the fundamentals of modern management is that the traditional organisation is dead. In place of businesses structured according to finance, manufacturing, research and development and the rest, there are non-hierarchical enterprises filled with self-managed teams of empowered individuals.

The only problem is that it is not true. Or, at least, not to the extent that has been claimed. One person who is not surprised by this is Frank Ostroff, a management consultant. He believes that change has been resisted because of the absence of an appropriate model.

Unsurprisingly, his book The Horizontal Organization (Oxford University Press) seeks to provide that model. While there have been certain "early adopters" of what Mr Ostroff says is the most fundamental change in the way that organisations are organised since the Industrial Revolution, he believes that the generally slow take-up is down to a failure to pass two acid tests.

The first is whether you are in part of an organisation structured around core processes that deliver value rather than function. If you are not, you could be flat, he says, but you are not horizontal.

The second is the extent to which companies align various skills and behaviours. To be effective, organisations have to do more than just change their structures, says Mr Ostroff. That requires them to adopt 12 principles - such as organising work around processes rather than tasks and functions; flattening the hierarchy by minimising the sub-division of workflows and non-value-added activities; assigning ownership of, or responsibility for, processes and performance; linking performance objectives and evaluation to customer satisfaction; informing and training people on a "just-in- time-to-perform" rather than a "need-to-know" basis; maximising supplier and customer contact; and rewarding individual skill development instead of just individual performance.

If all this suggests a strong human element, Mr Ostroff is unrepentant. For all the talk of "people being our greatest asset" and the like, management initiatives of recent years have tended to focus on operational, or structural, matters rather than those that might inspire and encourage people.

And while downsizing, quality programmes and the rest have usually been necessary in the interests of competitiveness, they do not create the sort of transformation that Mr Ostroff is looking for on their own.

This is hardly surprising. As Mr Ostroff points out, companies tend to be conservative - and so like to revert to what they know. And this tendency to go for one thing is one of five drivers that he identifies as crucial to finding a new way of organising companies for their long-term survival.

The others aree heightening competition in the business environment; the need for cross-functional organisations to support the development of such notions as integrated supply chains; the increasingly widespread acceptance of enterprise resource planning and other programmes spanning organisations rather than departments; and the growing importance of electronic commerce and the corresponding need to be able to respond quickly and effectively.

Indeed, turning around organisations of all sorts so that they face their customers rather than their senior executives is the key message of Mr Ostroff's book. After all, it is hardly worth going to all the trouble of redesigning organisational processes if their structures prevent them achieving their objectives.

But Mr Ostroff is also adamant that this is not only about improving company performance, though he is quite sure that this will necessarily flow from such an exercise. "It improves the return to shareholders, but it's not mean," he says, adding that striving after the horizontal organisation - while not achievable for everybody - creates better performance for customers and shareholders and makes better places in which to work. A point that is not lost on Mr Ostroff and his colleagues at a time when the "battle for talent" is emerging as the key corporate challenge.

News
The cartoon produced by Bruce MacKinnon for the Halifax Chronicle-Herald on Thursday, showing the bronze soldiers of the war memorial in Ottawa welcoming Corporal Cirillo into their midst
news
News
i100
News
The Edge and his wife, Morleigh Steinberg, at the Academy Awards in 2014
peopleGuitarist faces protests over plan to build mansions in Malibu
Voices
Nigel Farage has backed DJ Mike Read's new Ukip song
voicesNigel Farage: Where is the Left’s outrage over the sexual abuse of girls in the North of England?
PROMOTED VIDEO
News
ebooksAn unforgettable anthology of contemporary reportage
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

SQL Developer with T-SQL, Watford, Hertfordshire - £350 - £360

£350 - £360 per day: Ashdown Group: SQL Developer with T-SQL, Watford, Hertfor...

Chief Financial Officer

120-150k: Accountancy Action: We are looking for an experienced CFO from a min...

IT Systems Business Analyst - Watford - £28k + bonus + benefits

£24000 - £28000 per annum + bonus & benefits: Ashdown Group: IT Business Syste...

Trainee Recruitment Consultant - Birmingham - Real Staffing

£18000 - £23000 per annum + Commission: SThree: The SThree group is a world le...

Day In a Page

How could three tourists have been battered within an inch of their lives by a burglar in a plush London hotel?

A crime that reveals London's dark heart

How could three tourists have been battered within an inch of their lives by a burglar in a plush London hotel?
Meet 'Porridge' and 'Vampire': Chinese state TV is offering advice for citizens picking a Western moniker

Lost in translation: Western monikers

Chinese state TV is offering advice for citizens picking a Western moniker. Simon Usborne, who met a 'Porridge' and a 'Vampire' while in China, can see the problem
Handy hacks that make life easier: New book reveals how to rid your inbox of spam, protect your passwords and amplify your iPhone

Handy hacks that make life easier

New book reveals how to rid your email inbox of spam, protect your passwords and amplify your iPhone with a loo-roll
KidZania lets children try their hands at being a firefighter, doctor or factory worker for the day

KidZania: It's a small world

The new 'educational entertainment experience' in London's Shepherd's Bush will allow children to try out the jobs that are usually undertaken by adults, including firefighter, doctor or factory worker
Renée Zellweger's real crime has been to age in an industry that prizes women's youth over humanity

'Renée Zellweger's real crime was to age'

The actress's altered appearance raised eyebrows at Elle's Women in Hollywood awards on Monday
From Cinderella to The Jungle Book, Disney plans live-action remakes of animated classics

Disney plans live-action remakes of animated classics

From Cinderella to The Jungle Book, Patrick Grafton-Green wonders if they can ever recapture the old magic
Thousands of teenagers to visit battlefields of the First World War in new Government scheme

Pupils to visit First World War battlefields

A new Government scheme aims to bring the the horrors of the conflict to life over the next five years
The 10 best smartphone accessories

Make the most of your mobile: 10 best smartphone accessories

Try these add-ons for everything from secret charging to making sure you never lose your keys again
Mario Balotelli substituted at half-time against Real Madrid: Was this shirt swapping the real reason?

Liverpool v Real Madrid

Mario Balotelli substituted at half-time. Was shirt swapping the real reason?
West Indies tour of India: Hurricane set to sweep Windies into the shadows

Hurricane set to sweep Windies into the shadows

Decision to pull out of India tour leaves the WICB fighting for its existence with an off-field storm building
Indiana serial killer? Man arrested for murdering teenage prostitute confesses to six other murders - and police fear there could be many more

A new American serial killer?

Police fear man arrested for murder of teen prostitute could be responsible for killing spree dating back 20 years
Sweetie, the fake 10-year-old girl designed to catch online predators, claims her first scalp

Sting to trap paedophiles may not carry weight in UK courts

Computer image of ‘Sweetie’ represented entrapment, experts say
Fukushima nuclear crisis: Evacuees still stuck in cramped emergency housing three years on - and may never return home

Return to Fukushima – a land they will never call home again

Evacuees still stuck in cramped emergency housing three years on from nuclear disaster
Wildlife Photographer of the Year: Intimate image of resting lions claims top prize

Wildlife Photographer of the Year

Intimate image of resting lions claims top prize
Online petitions: Sign here to change the world

Want to change the world? Just sign here

The proliferation of online petitions allows us to register our protests at the touch of a button. But do they change anything?