Ways to survive the organizational revolution

The newest book of Prof. Ard-Pieter de Man and PwC's Martijn Ars en Pieter Koene

Contemporary information technology makes new ways of working possible. Successful new businesses with radically different organisational models are emerging. What’s characteristic of these new organisations is that they are dynamic, flexible, and externally oriented. That’s nothing less than a revolution, say Prof. Ard-Pieter De Man and PwC's Martijn Ars and Pieter Koene, authors of the recent How to Survive the Organizational Revolution. Their book provides an overview of the latest organisational models and highlights the pros and cons. We talk with Ard-Pieter de Man and Martijn Ars.

Why do you want to offer managers this overview?

“Our book is aimed primarily at leaders who are thinking about ways to improve the performance of their company,” says Ard-Pieter De Man. “They get to see so many management concepts that they lose track of things. That’s why we’ve listed the most important new models and suggest an answer to the question ‘when should you use a particular model and when shouldn’t you use it?’

A lot of businesses are currently discussing the direction the company is taking,” adds Martijn Ars. “They feel the company isn’t performing as well as it could and isn’t responding quickly enough to external developments and customer demands. They also see competitors that are doing better. So then it’s obvious that they think about how their company is organised. That’s where this book can help.”

Why are companies concerned about questions like that?

“A lot of companies and organisations have always worked with an industrial business model”, says De Man, “with numerous hierarchical layers. That slows down the decision-making process. That approach doesn’t work anymore. Businesses want speed and agility so as to innovate faster, and be able to respond more quickly to changes in the market. What makes it complicated is that people want flexibility while at the same time wanting to keep control and continue to direct things financially.”

"We’ve listed the most important new models and suggest an answer to the question, when should you use a particular model and when shouldn’t you use it?"

Ard-Pieter de Man Prof. Vrije Universiteit Amsterdam

"Keep it simple at first. Start with the basics, and don’t make it too complicated. Also accept that things may go wrong once in a while. It’s new for your employees. They still need to discover themselves and their new role, and get used to one another. New work arrangements need to be made, and that takes time.”

Martijn Ars PwC

What’s behind the need for speed and flexibility?

“Customers are constantly making new and more stringent demands on services and products,” says Martijn Ars. “Companies realise that they’re reaching the limit of what they can do when it comes to meeting those demands. And the changing expectations of potential new employees also play a role. Young employees want there to be scope for their own entrepreneurship and creativity. Companies are often still too hierarchically and functionally structured to be able to provide it, which makes them less attractive.”

Prof. De Man adds: “There’s also another reason why many traditional companies need to tighten up their act. All kinds of new competitors, start-ups, are emerging. These are often companies that are highly expert at dealing with the new technological possibilities. Moreover, certain sectors – such as finance and the pharmaceutical industry – also have to deal with a proliferation of new government regulations.”

Do businesses and their leaders know what they need to do?

“They do know roughly which way they need to go,” says Prof. De Man. “That they need to be more flexible, with fewer management layers and more and better use of information technology to share information more effectively. But what’s missing is the overview. They wonder what the right approach is so as to still keep some control. That’s what causes them headaches. How do they prevent it from becoming chaos?”

What are the important features of new organisations?

“They all have less hierarchy and more self-management and self-organisation”, says Martijn Ars. “And another feature is that organisations no longer stop at the boundary of the company but are also involved in setting up the network around it. These days, we refer to that as ‘the ecosystem’. A third feature has to do with planning. That involves more and more short-cycle planning so as to be able to adjust more quickly when the market demands it.”

“Take a look over the garden fence. Check out what other companies are doing. It’s important to adopt a broad perspective. Don’t just look at that one model and that one solution – you need to broaden your horizons. Take a look at what other companies are doing, including companies that you might not consider relevant."

Ard-Pieter de Man Vrije Universiteit Amsterdam

Is there an organisation model that you think is the best?

“If only it were that easy,” laughs Prof. De Man. “Of course you’ve always got people who think they’ve found the perfect solution. That a certain model is the solution for everything. But that’s not how it works. It helps to think in terms of models when you look at organisations, but you always need to adapt that to the actual situation of the company – to the reality."

“What that usually means,” says Martijn Ars, “ is that you have to deviate from what the particular model prescribes. You have to make adjustments or borrow something from another model to make things work for the company or the organisation. Despite what you hear some gurus say, there’s no single method that works for everything. We’re critical about that. That’s why we’ve added information inserts to the book like you get with medication, saying ‘these are the ingredients, but be careful: these are the side-effects. These are the opportunities and the advantages, and these are the side-effects and the drawbacks’.”

“The most important thing,” says Martijn Ars, “is for your organisation to have a vision about where you want it to go. The way you organise the company has to support that vision. The new forms of organisation that are emerging and that we’ve listed offer many opportunities for that.”

What tips do you have for a manager who reads your book and decides he or she wants to take things in a different direction?

“My first tip,” says Prof. De Man, “would be to look over the garden fence – in other words, check out what other companies are doing. It’s important to adopt a broad perspective. Don’t just look at that one model and that one solution – you need to broaden your horizons. Take a look at what other companies are doing, including companies that you might not consider relevant: organisations with very different products or services to your own company. Investigate why they’ve chosen a particular approach, and listen carefully to what their reasons are.”

“Tip two,” says Mr Ars, “is not to impose the reorganisation on your employees top-down. Look for people within your organisation – at all levels, from high to low – who get excited about it and believe in it, and group those people together. Because every level in an organisation and every function looks at this matter differently. Get a handful of people away from what they do on a day-to-day basis, get them together, and have them brainstorm about it. Creative minds who like experimenting. And look at what they’ve learned from experience.”

“Tip three,” says Prof. De Man, “is to start small and tackle things step by step. Think about the consequences of a reorganisation for the various teams and systems within your organisation. Take a long, hard look at where your company stands. What are the various possibilities? And be realistic about it: don’t just copy what a competitor is doing – it might not work for your company because of your people, your financial systems, your IT, or your HR. And don’t just scrap layers of management, because those kinds of positions continue to exist. In short, look hard at whether your organisation can handle what you have in mind.”

Martijn Ars adds: “Tip four is to keep it simple at first. Start with the basics, and don’t make it too complicated. Also accept that things may go wrong once in a while. It’s new for your employees. They still need to discover themselves and their new role, and get used to one another. New work arrangements need to be made, and that takes time.”

“And tip five,” says Prof. De Man, “as a manager, have the courage to let go. If you give a team scope to experiment, then really do give them that scope. Don’t just direct them towards a desired outcome.”

Contact us

Martijn Ars

Senior Manager, PwC Netherlands

Tel: +31 (0)88 792 75 09

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