It has been shown that a number of organizations – both profit and non-profit – show very successful results by applying organizational practices which radically contradict dominating convictions. The US-company Morning Star produces tomatoes worth $700 million annually with about 400 employees. They achieve a double-digit growth rate compared to the 1 % of their competitors. The Dutch neighborhood-nursing organization Buurtzorg grew from 10 employees to 7000 with a market share of 75% within 7 years. These are examples for organizations which differ fundamentally from well-known organizational structures. Among others, three central characteristics of them may be summarized as follows (Hamel, 2011, Laloux, 2014): To serve the purpose or mission of the organization provides the leading orientation for every decision and action. Whether an idea or argument is good or bad will be judged by this estimation. Every employee at Morning Star for example “is responsible for drawing up a personal mission statement that outlines how he or she will contribute to the company’s goal of `producing tomato products and services which consistently achieve the quality and service expectations of our customers.´” (Hamel, 2011). The power to take decisions is allocated to those people in the organization who are competent for it. Employees choose how much money to spend on what, even including salaries. They are responsible for acquiring the tools needed to do their work. Employees even define the strategy. There are no titles nor promotions because there is no hierarchy. In such organizations there are no managers anymore. However, everybody is a manager in terms of competencies to decide. One employee puts it like that: “I’m driven by my mission and my commitments, not by a manager.” (Hamel, 2011). Employees negotiate responsibilities with their peers. They apply market-style practices within their relationships. If they want to make investments larger than what they are able to finance themselves they have to convince colleagues to lend them the rest. “There is a social risk in doing something your colleagues think is stupid.” (Hamel, 2011). People do not have to fit into predefined boxes. They are expected to take on bigger responsibilities as they develop further competencies. Therefore there are broader and more complicated roles than elsewhere (Hamel, 2011). It may be concluded that in such organizations the employees have a lot of freedom to do what they are convinced is the best thing to serve the purpose. Simultaneously they have peer-negotiated responsibility for the results of their actions. There are almost no rigid structures like hierarchy and status markers which keep them from fulfilling their mission.

1. The Future of Organizing
Prof. (FH) Dr. Richard Pircher
Richard.pircher@fh-vie.ac.at
www.xing.com/profile/Richard_Pircher
www.linkedin.com/in/richardpircher
University of Applied
Sciences BFI Vienna

2. • Technologie bürokratie
Industrial production
offers enormous
productivity through
division of laborImage: nocloudinthesky

3. commonly such an
organization is understood
as a machine.
There are buttons and
handwheels you may use to
change it
Image : Ragin Stern

4. command
execution
monitoring
report
The industrial machine organization is
a top-down pyramid
Image : (c) michaeldb www.fotosearch.com

5. a machine is
rigid and inflexible
and most humans
don`t want to be
treated as a
gear-wheel

6. New Types of Organizations
a number of organizations – both
profit and non-profit – show very
successful results by applying
organizational practices which
radically contradict
dominating convictions

7. The future of organizing is
alive here already:
(Hamel 2011, Laloux 2014, Pircher 2015)
(500, production, FR)
(>400, production, US)
(9.000, service, NPO, NL)
(1.500, services, US)
(100, production, AT)
(1.350, production, US)
(org. model)
(600, services, DE)
(900, production, US)
(4.000, services, NPO, US)
(40.000, production, global)
(1.500 stakeholder, services, NPO, DE)
(750, production, FR)
(7-1.600, service, DE)
Premium
Cola

8. Characteristics of new organizing:
purpose-driven
self-steering
competency based
accountability
motivating
adaptive - flexible
innovative
relevant actions
the whole human matters
Distributed authority
Image: (c) yodiyim www.fotosearch.com
collective intelligence

9. New Types of Organizations
• Morning Star:
– produces tomatoes worth $700 million annually
with about 400 employees
– They achieve a double-digit growth rate compared
to the 1 % of their competitors
(Hamel, 2011; Laloux 2014) https://www.youtube.com/watch?v=qqUBdX1d3ok

10. New Types of Organizations
• Buurtzorg:
– A Dutch neighborhood-nursing organization
– It grew from 10 employees to 7000 with a market
share of 75% within 7 years.
(Hamel, 2011; Laloux 2014)

11. New Types of OrganizationsFAVI:
– A French brass foundry, started transition in the 1980s,
with 80 employees at the time and competitors moving
their productions to China to keep prices down.
– FAVI, with the intention to create meaningful industrial
employment in the underprivileged northeastern part of
France, has expanded to more than 500 employees today,
with outstanding financial results and,
in spite of the big competition from China,
is still paying its workers salaries
significantly above the
market rate.
(Laloux 2014)

12. Tele-Haase
• In Vienna, Austria, they employ approx. 100 people
• There is no CEO anymore
• Core-processes and supporting processes are defined instead
of hierarchy
• The changed happened in a gradual step-by-step approach

13. Tele-Haase: processes – no hierarchy
„Regie“ = direction,
formerly known as
„management“ / „CEO“

14. Zappos - Holacracy
• Zappos is one of the worlds largest online shoe
stores with more than 1.500 employees. It is
owned by Amazon
• the company restructured its organizational model
to use Holacracy
• Holacracy is a system of organizational governance
in which authority and decision-making are
distributed throughout self-organizing teams
• In Holacracy roles are the building blocks instead
of job descriptions or hierarchical positions
• Holacracy explained in a nutshell

15. Differentiating Characteristics
Self-steering - no fixed hierarchy:
• The power to take decisions is allocated to those people in
the organization who are competent for it.
• Self-management requires a set of interlocking structures
and practices. Fluid hierarchies replace the fixed pyramid.
• Motivation is much higher. Employees even define the
strategy.
• There are no titles nor promotions because there is no
fixed hierarchy.
• Everybody is a manager in terms of competencies to
decide. One employee puts it like that:
“I’m driven by my mission and my
commitments, not by a manager.”
(Hamel, 2011)

16. Differentiating Characteristics
Purpose-driven:
• To serve the purpose or mission of the
organization provides the leading orientation for
every decision and action. Whether an idea or
argument is good or bad will be judged by this
estimation.
• Example Morning Star:
Every employee at for example “is responsible for
drawing up a personal mission statement that
outlines how he or she will contribute to the
company’s goal of `producing tomato products
and services which consistently achieve the
quality and service expectations of our
customers.´”
(Hamel, 2011)

17. Differentiating Characteristics
Self-organization:
• Employees negotiate responsibilities with their
peers.
• These companies apply market-style practices
within their relationships.
• Change can come from any person who senses that
change is needed.
“There is a social risk in doing
something your colleagues think is
stupid.”(Hamel, 2011, Laloux, 2014)

18. Differentiating Characteristics
Wholeness:
• People feel that they do not have to wear a mask and
to fit into predefined boxes. Employees are expected
to take on bigger responsibilities as they develop
further competencies. Therefore there are broader
and more complicated roles than elsewhere.
• Simple management practices allow people to be truly
themselves.
• Example Patagonia:
The company maintains a child development
center. Kids visit their parents´ desks, join adults
during lunchtime, etc.
(Laloux 2014)

19. Differentiating Characteristics
• It may be concluded that in such organizations
the employees have a lot of freedom to do
what they are convinced is the best thing to
serve the purpose.
• Simultaneously they have peer-negotiated
responsibility for the results of their actions.
There are almost no rigid structures like
hierarchy and status markers which keep them
from fulfilling their mission.

20. Strengths and Challenges
• Employees tend to be more
motivated, engaged and
innovative
• Both Repetitive and reflexive
tasks are combined
• Everybody in the organization
may become a sensor for
relevant changes
• The purpose of the
organization is the guiding
star for every decision and
action
• Change is embedded in the
genes of the company
• A culture of cooperation and
effective use of resources is
much easier to establish
• It takes time to understand a
completely different logic of
collaboration and to get
accustomed to it
• Not everybody wants to
engage in work
• Recruiting is more difficult
• Owners and leaders with an
appropriate mindset are
essential
• Individual success may not be
measured in conventional
hierarchical terms anymore
• Employees have to be capable
of dealing with freedom and
accountability

21. Take-home messages
1. There are organizations which successfully
function in a purpose-driven way without rigid
management roles
2. The employees are much more independent,
self-organizing and responsible than in most
other organizations
3. These organizations are more effective,
innovative, flexible and responsive to their
environment
4. Hierarchy free self-organization may be realized
for the whole organization or just in parts of it

22. Prof. (FH) Dr. Richard Pircher
Richard.pircher@fh-vie.ac.at
www.xing.com/profile/Richard_Pircher
www.linkedin.com/in/richardpircher
richard-pircher.net
Slides are available at de.slideshare.net/pircher
I would be glad to
answer your questions and to
discuss the topic
Please feel free to contact me!
University of Applied
Sciences BFI Vienna