The Horizontal Organization : What the Organization of the Future Actually Looks Like and How it Delivers Value to Customers

272 Pages·1999·11.81 MB·English

by  Frank Ostroff

the HORIZONTAL
ORGANIZATION
Frank Ostroff
OXFORD UNIVERSITY PRESS NewYork Oxford 1999
the HORIZONTAL
O R G A N I Z A T I O N
What the Organization of the Future Looks Like
and How It Delivers Value to Customers
Oxford University Press
Oxford Ne w York
Athens Aucklan d Bangko k Bogot a Bueno s Aires
Calcutta Cap e Town Chenna i Da r es Salaam Delh i Florenc e
Hong Kong Istanbu l Karach i Kual a Lumpur Madri d
Melbourne Mexic o City Mumba i Nairob i Pari s Sa o Paulo
Singapore Taipe i Toky o Toront o Warsa w
and associated companies in
Berlin Ibada n
Copyright © 1999 by Frank Ostroff
Published by Oxford University Press, Inc.
198 Madison Avenue, New York, New York 10016
Oxford is a registered trademark of Oxford University Press
All rights reserved. No part of this publication may be reproduced,
stored in a retrieval system, or transmitted, in any form or by any means,
electronic, mechanical, photocopying, recording, or otherwise,
without the prior permission of Oxford University Press.
Library of Congress Cataloging-in-Publication Data
Ostroff, Frank.
The horizontal organization: What the organization of the future looks like
and how it delivers value to customers / by Frank Ostroff.
p. cm .
''Throw away your old organization chart and create a new one.
Manage across, not up and down. Use structure to drive results."
Includes bibliographical references.
ISBN 0-19-512138-4
1. Teams in the workplace. 2 . Management—Employee participation. I . Title.
HD66.068 199 8 658.4'02—dc2 1 98-978 1
1 3 5 7 9 8 6 42
Printed in the United States of America
on acid-free paper
To My Beloved —Wife, Parents, Children, Family
This page intentionally left blank
CONTENTS
Preface i x
Acknowledgments x i
PARTI
WHAT THE HORIZONTAL ORGANIZATION I S
1 WH O NEEDS THE HORIZONTAL ORGANIZATION? 3
Almost Everyone
2 EAC H HORIZONTAL ORGANIZATION IS UNIQUE 2 5
Ford Motor and OSHA Show the Way
3 HORIZONTA L IS NOT THE SAME AS FLAT 5 8
Distinctive Features of the Horizontal Organization
4 TH E HORIZONTAL ORGANIZATION EMPOWERS PEOPLE 7 3
How Employees Control the Company's Core Processes
PART II
HOW THE HORIZONTAL ORGANIZATION WORKS
5 ORGANIZIN G AROUND A CORE PROCESS 8 9
The Supply Management Organization of Motorola's Space
and Systems Technology Group
6 ORGANIZIN G A HORIZONTAL OPERATING UNIT 1O 2
GE Salisbury
7 ORGANIZIN G A DIVISION AROUND A
SALES AND SERVICE DELIVERY PROCESS 11 5
Barclays Bank's Home Finance Division
8 ORGANIZIN G AN ENTIRE COMPANY HORIZONTALLY 13 O
Xerox
PART III
HOW TO BUILD A HORIZONTAL ORGANIZATION
9 THRE E PHASES TO MASTER 15 1
Set Direction, Formulate Design, Institutionalize the Approach
10 PHAS E ONE—SET DIRECTION 16 7
Where and How Will You Compete?
11 PHAS E TWO—FORMULATE DESIGN 18 5
How Will You Do What You Do?
12 PHAS E THREE—INSTITUTIONALIZE THE APPROACH 20 5
How Will You Maintain Momentum?
Epilogue
THE ROAD AHEAD 22 9
Anticipating and Avoiding Problems and Seizing Opportunities
Notes 23 5
Index 24 3
Viii CONTENT S
PREFACE
This book started a number of years ago with a question tha t I wanted
to address: What will the organization of the future look like? I was in
management consultin g and was working with a number o f large an d
important organizations that were facing a rapidly changing world. If
there was an organizational form that would equip them t o cope suc-
cessfully with this change, what would it be?
My answer was what I now call the Horizontal Organization, and over
recent years it has been applied in a number of different kinds of firms
and organizations with startlingly successful results. Although this book
will describe the concept in detail, here is a brief description tha t will
serve as a background to the rest of the book.
Nearly all firms and organizations have as their mission the delivery
of something o f value to thei r customers . This ca n be a product o r
service, and the customer can be a purchaser of the product or service.
But there are some organizations—such as government agencies—tha t
deliver something of value to customers who don't pay directly for it.
However, they are just as much customers as those who buy products and
services from commercial firms. Clearly, it is to the organizations' advan-
tage if they can deliver maximum value to the customer no matter how
the customer is defined. The Horizontal Organization is designed to give
organizations the structural form and integrated organizational approach
that will allow them to deliver this value to customers.