Reframing Organizations summary

It’s an adage that’s been drilled into us for all our adult lives – good team players make for good employees. That said, companies still largely structure themselves with the expectation that their employees will work as individuals. But what if companies were truly structured to function as teams?

One model they might look to is that of self-managing teams. These are teams that don’t have a boss, and team members work and make decisions collectively. They elect who is responsible for which tasks and determine team goals and timeframes for completion.

In business, the quality of your product becomes irrelevant if you don’t have a good team in place to keep customers happy. And the best way you can achieve this is by knowing what exactly you want to offer your customers.

Let’s look at how Southwest Airlines does this. The company aims to give their customers a great flying experience. That premise means they know exactly the sort of team they want. Their employees have to have a positive outlook, great interpersonal skills and a sense of humor.

We all want job security. But it’s no longer a given in the modern market economy. The response of American companies to the 2008 recession demonstrates just that, as they laid off over two million employees. That said, not all companies have ditched the idea of job security. And there are good reasons for that. Let’s look at an example.

Lincoln Electric, a manufacturer of arc welding materials, has a policy of never firing employees who've been working there for at least three years. This has been challenging at times. Even when Lincoln Electric saw their sales figures sink by 40 percent over several years, they managed not to fire anyone. They found alternatives, for example by retraining mechanical workers as salespeople.

Big brands don’t always have the best reputations. More often than not, they’re vilified as the poster children for consumerist societies.

But brands are valuable– they’re an intrinsic element of a company’s mythos and also motivate employees to identify with a company's vision of itself. The right use of myth and vision is sure to support company success. Carl Jung, the famous turn-of-the-century psychologist, argued that myths are critical for the creation of collective dreams. These legitimize the values and ideas that hold organizations and companies together.

No matter what sort of company you’re working for, you’ll know that rules, routines and regulations matter. Everything has to function like clockwork. But nevertheless, it’s inevitable that at times, egos will rub against each other, and eventually, conflicts and grudges emerge. Things can get even more intense in times of change, like when a new manager arrives.

There’s no point beating around the bush – taking on a managerial position at a new company is tough. And you don’t want to be the spark that lights a tinderbox of lingering resentment. Let’s look at the fictional case of Cindy Marshall, who’s been transferred. She’s now a new manager in the customer service section of her company in Kansas City. Theoretically at least, it’s a major promotion. But she’s been posted there because the service has been sluggish and inefficient.

Company culture can be difficult to quantify and analyze. But it can be done. The consultancy firm Bain & Company ran a survey asking companies how well they thought they deal with changes in company management. It turned out that only 12% were able to achieve what they had in mind, namely a smooth transition that didn’t detrimentally affect company performance and kept employees satisfied. The lesson of this is that new executives have to adapt to company culture.

Let’s turn to how 3M dealt with changes to their top management. 3M is a company that is famous for its innovative and creative solutions. You know Post-it Notes? Well, that idea stems from 3M. However, in 2001, the company's profits were tumbling. A new CEO, James McNerney, was hired. It was his job to make the business profitable once again.

There’s no bigger coffee chain in the world than Starbucks. No wonder, then, that in 2007 its chairman, Howard Schultz, asked his fellow company leaders whether they felt that Starbucks was at risk of losing its soul. The company had grown so quickly that Schultz worried that its shops had become impersonal and that its ethical guidelines regarding produce and employees were being disregarded.

What defines this story is that Schultz hadn’t lost sight of ethical issues, despite his company’s size. Meanwhile, most companies don’t worry about that at all. In truth, companies that don't compromise on their ethics will do better in the long run. Just look at the German electronics company Siemens. It used to routinely pay bribes overseas when cultivating business partnerships.