freshStructure: Changing How Companies Think and Operate
The Knowledge Revolution, as this new era we have entered into has been termed, is a paradigm and irreversible shift for businesses and the global state of mind wherein people and businesses add value by creating and using knowledge - actions which are part of a cumulative and indefinite process. The old paradigm - Hierarchy of Managers - is outdated and no longer works. Asset-based wealth no longer carries the weight or importance of centuries ago as economies shift from a pure exchange of goods and services to an exchange of concepts and knowledge. And since the Knowledge Revolution is here to stay, businesses require a new model to keep employees motivated.
The Impact of an Outdated Paradigm
Though the organizational model most business use today - Hierarchy of Managers - started 250 years ago, this model has inherent flaws and problems:
- Employees are not motivated to improve either the assets or the profits of their enterprise.
- Coordination between employees is slow, and information is biased and sparse.
- Managers are expensive. (see the example below)
- Since most present-day employees are knowledge-workers, the contracts between the employees and their employer do not work successfully.
How much does the Outdated Paradigm - Hierarchy of Managers - Cost Your Business?
|The current paradigm's costs (per worker per year) are:
|Manager's Salaries $18,055
|Costs associated with non-maximum motivation is between (75%) $53,333 and (25%) $160,000
|Costs associated with non-maximum coordination is between (75%) $10,467 and (25%) $62,004
|All together: between $81,855 and $240,059
Notes: - freshStructure developed these numbers in an independent study of 80 high-tech multi-nationl companies.
Failure of the Hierarchy of Managers Paradigm - A Prime Example
Microsoft - a corporation that is much admired for its innovation and ability to grow with the times, has suffered from the Hierarchy of Managers Paradigm as much as any other business. Just look at the numbers and what employees have to say:
"Microsoft is slowing down. Its sales are up 73% in five years, but profits are up only 30%. Payroll doubled in the last six years."
"What has gone wrong? Microsoft, with $40 billion in sales and 60,000 employees has grown muscle bound and bureaucratic. Some current and former employees describe a stultifying world of 14-hours strategy sessions, endless business reviews and a preoccupation with PowerPoint slides; of laborious job evaluations, hundreds of e-mail a day and infighting among divisions so fierce that it hobbles design and delays product releases."
The Impact of New Technologies
The freshStructure solution is based on new technologies - personal computers and digital/mobile telephone - linked to each other via the telephone system and/or the internet. These technologies didn't exist 250 years ago when the current paradigm - Hierarchy of Managers - started. As with any new technology, these bring forth the ability to, and necessity for, change.
The freshStructure Solution
freshStructure uses these new technologies - and a new way of thinking - to solve the motivation and cost problems related to the old paradigm:
- Employees are motivated - their rewards are linked directly and fairly to their contributions to their team's profits.
- Coordination is via a modified price mechanism (two dimensions are used - price and C.S.I.). Coordination is fast, accurate and robust.
- Each team creates true leaders/teachers/administrators instead of managers and employees.
- Employees are part owners of their team and/or enterprise.