Worlds apart?
Recently I viewed a presentation on the Svenska Handelsbanken management model. For those who do not know it Handelsbanken is one of the world's most successful financial institutions while their management model sets them apart from most competitors.
Shortly afterwards I saw a short documentary on the Dabbawallas of Mumbai, India. The Dabbawallas are an organisation of 5000 people who distribute two million lunch boxes to Mumbai's office workers every day. The hardly make a mistake, have even by some been branded as a six-sigma organisation, use no technology and a large part of the employees are illiterate.
Is it possible to find two more different organisations?
Let's look closer:
The management model of Handelsbanken has four pillars:
Purpose: The customer comes first. With largely autonomous branches, close to the customer the bank can adapt quickly to customer needs.
Structure: Each branch manager is responsible for more or less all decisions about the business. Support functions sell their services to branches at cost. Contrary to what many might think, Handelsbanken has been spectacularly successful at running an international, highly sophisticated business without budgets, without variance analyses, without individual performance remuneration, but based on trust, clear purpose and strong culture.
People: Hire people based on fit with the company culture rather than CV achievements.
Remuneration: Collective bonus distributed equally to all employees.
The Dabbawallas run their organization based on four principles:
Purpose. The customer comes first. Getting their meals to the destination on time is the goal and everything is organised around that goal. They are so reliable that many people even trust them better than themselves to bring home their salary safely!
Structure: No actual hierarchy. Only the management board, supervisors and then the Dabbawallas. There are no budgets, no variance analyses, no individual performance remuneration.
People: All the Dabbawallas come from the same rural area in Maharashtra and new people are hired from this area to ensure cultural fit.
Remuneration: Revenue is distributed equally among the employees.
Worlds apart? Different continents, different industries, one might at first sight think they are. But when it comes to the management model those two businesses are in fact more similar than they might seem at first sight.
But they are worlds apart from most other companies. Perhaps that is what makes them both so successful?