In 1998 Lars Kolind was appointed the new CEO of Oticon, a hearing care company based in Denmark. At that time Oticon was struggling in the market, paying back for the strategical mistakes they had made in the 1980s.
After managing financial problems, in 1991 Kolind changed the company by designing and implementing the so-called Spaghetti Organization, which has been featured as one of the first knowledge-based, almost paperless, people focused organizations in the world.
What are the changes Kolind brought into the organization?
| Before | After | |
| Strategies | Unclear | Clear |
| Organizational Platform | Function/tasks | Tasks/people |
| Organizational Unit | Departments | Project Groups |
| Organizational form | Hierarchy | Spaghetti |
| Personal Status | Level in hierarchy | Competence |
| Communication | Memos | Dialogue |
| Management Tools | Control, decision-making | Motivation, empowerment |
| Access to information | Limited | Extensive |
| Efficiency measures | Faster work routines | New work processes |
| Rationale for IT system | Improvement of work routines | Support of team work |
| Work Place | Fixed | Mobile |
| Search Information | Difficult | Easy |
| Job Mobility | Poor | Good |
| Flexibility or organization | Little | Large |
| Access to management group | Difficult | Easy |
| Internal service level | High | Low |
| Respect for colleagues’ work | Little | Large |
The court has been chalked. Now we have to invent the rules of the game /Lars KOLIND
All these changes were too radical for the 1990s. People without assigned desks, less paper work, no set department and no titles… It may sound too much of change, but all these changes were linked with company targets. The goal was to increase the competitive ability by 30% in 3 years and it worked. In 1995, Oticon doubled its revenues and their operating profit was 5 times more than in 1991. Kolind’s biggest success was to create a profitable ‘people organization’.
I got the chance to find out about the ‘Spaghetti Organization’ and Lars Kolind during my studies. He did not only influence me by what he achieved at Oticon, but also by how he supported a student he has never met.
The spaghetti organization model is still used as a case study in many business schools and used as a benchmark for companies that are looking to change. If you are interested in learning more about the Spaghetti Organization there are many articles and books to read about it.
What Kolind did with Oticon is a good example of using change management to execute company targets and using the most valuable resources of the organization – the people. Studying this case we can maybe find ways to apply this model in the Middle East by breaking down the hierarchy and bringing some spaghetti.
The question is how would you like your spaghetti?
