Freedom, Inc_ - Brian M. Carney [77]
But Kolind’s vision wasn’t manifest only in the almost total absence of paper. In the coming years, Oticon employees would spontaneously launch dozens of new projects and potential new products—at one point, Oticon had seventy such projects under way simultaneously. And in an echo of W. L. Gore & Associates’ fluid structure, people could often find themselves leading or participating in three or more of them at the same time. To manage this profusion of innovation and activity, Kolind put in place a Products and Projects Committee to review and monitor everything that everyone was suddenly doing.
The time to market for new products was reduced by 50 percent, and Oticon started to churn out one innovation after another. Just two years after the inauguration of Kolind’s office of the future, Oticon was generating half of its total revenue from these innovations. In the summer of 1995, Oticon launched DigiFocus, the world’s first all-digital in-ear hearing aid, despite having given its competitors an eight-year head start on digital technology. Sales, which had already doubled between 1990 and 1994, had doubled again by 1999—a 400 percent increase in revenue in one decade, accompanied by double-digit profit margins.
Kolind began to feel that he had succeeded. In 1995, Oticon took over a big Swiss-owned competitor and conducted a successful IPO. At the same time, he spearheaded an international expansion, expanding branch offices in half a dozen other European countries as well as in the United States, Australia, and New Zealand.
But all was not well back at home, despite the short-term successes. Unbeknownst to Kolind, the Products and Projects Committee had become a major source of discontent and frustration within the company. People felt that the committee was micromanaging projects, suspending them or holding them up arbitrarily, and in general not upholding the values propounded by Kolind and parroted by the management. Kolind had created the physical edifice he desired and he had gone some of the way toward freeing Oticon’s people. But he absented himself too much from maintaining the new culture. And as a result, he didn’t get the early warning signals about simmering employee discontent.
So one day in 1995, the pot finally boiled over. Oticon’s employees called a spontaneous meeting to voice their anger. At the meeting, they loudly denounced the constant violation of Oticon’s values by the top management. The Products and Projects Committee was singled out for its intrusiveness and seemingly arbitrary behavior. It was viewed by the rank and file as tyrannical and capricious. Employees who had been told they would be trusted believed that they were not being treated as equals, and they demanded changes. The former middle managers who had lost their managerial prerogatives saw their opportunity and joined the calls for change. And the senior managers to whom Kolind had issued his ultimatum—“You’re with me or against me”—saw an opportunity to lash out as well. All of them got the changes they were looking for, but these only accelerated the erosion of the culture Kolind had wanted to build.
Following the confrontation, Oticon was divided into three parts according to market segment: mass-market, mid-market, and high performance. This stratification, Kolind would later comment, turned the spaghetti organization into lasagne. The Products and Projects Committee was replaced by the Orwellian-sounding Competence Center. This group of senior managers, far from addressing the complaints directed toward the old committee, doubled down on them, taking upon itself the authority to start new projects and so killing whatever initiative still lay with frontline people. It also started appointing project leaders and constrained their earlier ability to negotiate compensation for project members. The liberation campaign was effectively over.
During this period, according to the people who knew him, Kolind himself became disenchanted, even bored, with the company