Dynamic of change

Lars Kolind’s method for bringing about change at Oticon followed closely with Nadler’s integrated change agenda.  The integrated change agenda is referred to as an umbrella type agenda because it covers all elements of the change effort: values, governance, operating environment, talent, operational performance, organization,  strategy, and purpose (Nadler, 1998).  

Values:

According to Nadler, communication of the organization’s values is the most important step to change.  While some elements such as strategy may change as needed, the values for which a company stands remains the same and guides the decision-making process (Nadler, 1998).  Kolind released a statement of values for Oticon which clearly identified the organization’s nine core values.

1.

1. All human beings like to take responsibility if they are given responsibility.

2. The people we are willing to trust will return that trust.

3. People innately wish to develop and make progress.  People, then, prefer to be challenged and, while they may be afraid to change, don’t like things to be always the same.

4. People want a clear understanding of the structure and overall objectives of their work environment, but also like the freedom to fulfill these objectives.  People like to have influence over their daily work situation. 

5. People wish to be paid according to their performance and their results in a way that is fair and justified.

6. People prefer to be partners in their companies, in both good and bad times.

7. Job security is best achieved through developing individual competence, so that competitors will compete for your services.

8. Every person should be treated as an individual and assisted in his career development.

9. People are interested in knowing how their work relates to the strategy and goals of the company, and wish to fully understand the company’s general situation and development.

By developing these values and communicating them to the employees of the company, Kolind set the guideposts for which all decisions would be based moving forward. 

Governance:

(I struggled with this area – sorry guys).

Operating Environment:

Kolind made drastic changes to the operating environment within Oticon.  To promote efficiency and conversation, Kolind removed the paper communication process and replaced it with a computer information system.  With the new computer system, any employee could work from anywhere.  Another environmental change that Kolind initiated was to remove all the walls or partitions within the company.  By doing so, Kolind encouraged employees to work together as one big team. 

Operational Performance:

To achieve the goal of a 30 percent increase of in profitability in three years, Kolind had to rethink operational performance.  Each employee was asked to examine their own job and focus on what they did well.  Employees that excelled in one area of the process was less efficient if time was spent doing something else.  Every employee was asked to eliminate activities that did not add value to the process.  Employees were also required to learn a new activity that that would keep them productive when one area of the process had slowed down.  This enabled each employee to maximized their individual contributions to the organizational mission and goals. 

Organization:

The re-organization of Oticon removed most of the middle managers and project teams became the basic organization frame of the company.  Top managers decided on projects to start and appointing project leaders.  Project leaders had the responsibility for managing the resources, outcomes, budget, and schedules of the projects they lead.  Titles and job descriptions within the company were abandoned.  The organization only acknowledged three managerial roles: project managers (responsible for overseeing individual projects), senior specialists (provided professional expertise), and coaches (mentors and other human resource related roles).  All employees were eligible to become a project manager and all employees were encouraged to submit project proposals (Larson, 2002).

Strategy:

Originally the strategy for Oticon was “to be the biggest, the best, to do everything for everybody.”  This strategy was no longer working.  Lars Kolind’s new strategy was to run not just faster but better.  Kolind believed that with the increase in competition, having the best product was not enough.  Oticon’s new strategy was to create an increase in profitability by 30 percent over three years.  Titled Project 330, the proposal was to move from a purely manufacturing company to a first class service company with products developed and fitted for individual customers.  This was to be accomplished by all departments: sales, marketing, service, production, and administration, working together in unison (Sull, 2003). 

Purpose:

The purpose for the changes at Oticon was transforming the business’ market focus to giving greater attention to end-user satisfaction and partnering with dispensers.  The goal was to develop and maintain activities that created customer satisfaction.    

Advice on moving forward:

Given the resistance that Kolind is facing, my advice would be to continue in the same manner of leadership as he has thus far.  When he first initiated the change process, Kolind gave the power to the employees to decide whether they wanted to try the change.  Throughout the transformation, Kolind had given power to the employees by including them in the decision-making process.  I believe that Oticon can continue to overcome resistance by continuing to involve the employees and allowing them to decide for themselves whether they want to continue with the vision (LaBarre, 1994). 

Resources

Larsen, H. H. (2002). Oticon: Unorthodox Project-Based Management and Careers in a “Spaghetti Organization.” Human Resource Planning, 25(4), 30–37.

LaBarre, P. (1994). The dis-organization of Oticon. Industry Week/IW, 243(14), 22.