In our research about future-proof Teal Organizations* we ran into a jewel: Aldowa Aluminum in Rotterdam
Allard Droste (managing director, previously working for Stork) calls it ‘the other way of working’. When he and his business partner Jan Boom (already employee) acquired Aldowa in 2007 from its previous owners, they were left with a traditional, old-fashioned, almost feudal sheet metal production company of 9-persons, that was completely stripped and neglected to squeeze the last Euro out of it.
Now Aldowa has over 40 employees, runs prestigious projects such as the ‘Markthal’ in Rotterdam, and wins awards like the ‘New Heroes 2015’ (for organizational reformers) and ‘FD Gazelles 2015’ (for fastest growing Dutch businesses). Not bad for a company that ‘just’ makes aluminum facades for buildings.
Rotterdam Markthal (design: MVRDV)
Culture eats strategy for breakfast – Peter Drucker
One of the things that quickly becomes clear in our interview is that Allard sincerely enjoys to constantly improve his organization. Transforming an organization seems not so much a matter of implementing some tricks or systems, but more about changing its culture.
“My biggest hobby is culture, bringing people into motion. When we took over the business, we started on all areas at the same time: clean the windows, buy new working outfits, invite clients, build a new website, maintain all the machines, install Friday lunch to close the gap between office and production, you name it. It was not always easy, I’ve seen grown up adults leaving the building crying, because they could’t handle the many changes anymore.
Transparency, responsibility, and sharing are the most important pillars of the culture in our company. All our financial results, order sizes, salaries, and profit margins are open to everyone. Responsibility means that you have to do everything. And we share everything, good or bad. If a new project comes in, it’s everybody’s order, everybody is part of our organization.”
The importance of sharing in business relationships
“In the old days, every time we needed new material the purchase manager spent a full day to call up to nine different suppliers. At the end of the day he proudly announced that he’d saved 1 cent per kilo. Now we work already for nine years with one supplier, who delivers about 450.000 kilo per year – for the day price – but who also keeps stock, and drives by every day to supply the quantity for that day (that gets ordered by the operators by the way). We might not get the lowest price, but for sure we’ve got the best deal.”
How much money do you lose with over-the-top-cost-cutting? This seems paradoxical, but I’ve seen so many purchase managers in F&A departments that – in their quest for ultimate cost control – overlook benefits that can’t be measured or put in an Excel sheet. By doing this they kill the access to ‘brains and energy’ of your business partners.
Where do you want to be in five years…
“Without a shared dream, you cannot get anywhere with an organization. It’s the only structure that you need. When we started nine years ago we described the top of the mountain we wanted to climb together: where do we want to be in five years time. On the wall hangs a collage of all the national and international dream projects Aldowa wants to participate in.
Start not only with the end in mind, but act as if you’re already there. When we’d created our shared future, we started acting as if we were already there. The only thing we needed to do was completing the journey.
We use this mindset now all the time: We already have this new project, we only need to talk to the architect. We have already won this award, we only have to collect it next year. We already have this new client, he just needs to sign.
As a result we start thinking with a potential new client as of the first contact. We don’t wait till all contracts are signed, but we immediately invest time and money in making a mock-up of a facade that the architect can have a look at. We already have the project in our pocket anyway…”
The power and energy that gets released from this approach is something that you can benefit from immediately, regardless your organization. Create a shared focus, or future, imagine you’re already there, and then look back how you did get there.
Master more than one skill
“Originally every worker was skilled in operating one machine, and the product followed its route through the factory. Since production processes are never perfectly distributed over the machines, you could see people just standing next to their machine for a whole morning, waiting, while another worker had a pile of work to be processed.
Now every operator is skilled in at least two machines, and they help each other when the need is there. As well machines are moved around according to what’s the most efficient production line for a specific project.
This mentality quickly was picked up by our transporter. The driver of the truck was often waiting for the truck to be loaded, now he has also a license to drive a forklift truck, and helps to load the truck.”
I notice a lot of frustration, inefficiency, and rework coming from strict job descriptions. “We from Marketing have prepared a great new line extension, now Sales is screwing up in getting the distribution in place…” (or the other way round). Why not remove all functional labels and make a group of people – as a true multi-skilled team – fully responsible for a brand or customer? No more “throwing over the wall” because there are no titles or walls anymore?
The brilliance of self-managed teams
Allard shares an illustrative story about how they received a €2.5m order to make 18.000 aluminum frames, with three weeks time to prepare everything. Instead of planning the whole project and then deliver it to production for execution, he selected two colleagues from the production team: the one with the most years of working experience, and the youngest. He told them: “This is the order, these are the technical requirements, and this is the budget. It’s your project, you’re responsible to arrange everything, and you have the freedom to do anything that’s needed to make it happen.”
“With one more week ahead, nothing has happened yet, and I started to feel a bit nervous. Then on Saturday I came to the production facility and they were breaking down a wall in the storage room. ‘You said we could do anything needed to arrange it!’ It happened they’d prepared everything: they set up the ideal production line, thought about the perfect logistical flow, ordered materials, rented machines, and instructed the production crew. They even started to work in two shifts when production was a bit behind. All by themselves, without a single decision from management. Everything within budget.”
Although I often receive complaints from corporate leaders about the lack of ownership and entrepreneurship within their company, they keep the org charts well embedded in the daily way of working. Last week a team leader told me she needed to ask permission to her Sales Director, then talk to HR, and finally get approval from the Finance Director, to keep a leaving manager for one month longer and capture his knowledge. It was the right thing to do, it cost only €2,000, and it took five hours of internal ‘alignment’.
Now, to improve this situation is not just a matter of throwing out hierarchy. You will need to reinvent a lot of your organizational structures if you decide to work with self-managed teams. But what an ownership and entrepreneurship you’ll see in return!
Making the switch
According to Allard, his business partner Jan was the embodiment of ‘the old thinking’. Although he used to be the traditional manager with an answer to every little detail, he managed to make the switch. Jan shares an insight that helped him realize to let go of the control, and leave the responsibility to his production crew. “My father was a artist and one of his expressive paintings represented three cyclists in a race. But he left out a lot of details, like the pedals, the chains, and the spokes in the wheels. Still it was still very clear that the racers were cycling very fast and heading for the finish. That was when I realized I can leave out all the details, and start asking questions instead. If someone comes in my office today and asks if he can do something, I only ask: did you think about it? If so, go do it.”
It’s very simple to become a leader operating from a future-proof Teal*worldview. It’s not always easy though. One of the biggest challenges to overcome is becoming aware of the way you view the world. If you believe that people need constant direction, instructions, or need to be continuously corrected or monitored, you could consider this as ‘old paternalistic thinking’.
Just imagine another possibility: that the people you work with are mostly grown-ups, can drive a car, raise a family, and make financial decisions about what mortgage to take for instance. It is highly possible they are perfectly capable of running a business if they get the chance…
If you’re able to get yourself out of the equation, and provide a space where your team can be responsible for everything, you might surprise yourself with the amount of energy, efficiency, and entrepreneurship it releases.
Allard Droste and Jan Boom
Your organization is too complex to be fitted into a box
“One of the consequences of this ‘other way of working’ is that our organization doesn’t fit in a box. Literally. When we needed to get ISO certified (on request of our clients), the ISO inspector had a hard time classifying us. Can I see your organization chart? Sorry, we don’t have one. Can I see your functional and job descriptions? Sorry we don’t have them. Can I then see your authorization scheme? Nope, everybody here is allowed to do everything. And we don’t report anything.
He didn’t understand it, and after half an hour he needed a walk outside to clear his mind. But after interviewing the whole organization, he loved what he saw and in the end we got certified.”
Hierarchy, job descriptions, and documents to describe processes might work in simple environments. However, your organization is a complex system, operating in complex markets. A better analogy for an organization would be a living organism. Now, if you look at a forest in spring for instance, there is neither a CEO deciding that every tree needs to blossom nor strict processes how to do it. It’s probably an illusion to think that nowadays you can predict and control your results.
Do you want more?
I conducted this inspiring interview with my TealTribe partner Willem-Ahrend van Hattem. If you are interested to learn more about the future of organizations, we offer a free Management Team Inspiration presentation. Don’t hesitate to contact us to make use of this offer.