The fundamental differences between traditional and non-traditional organizations

There are three clear differences between traditional organizations and non-traditional organizations. They are profound and change all the dynamics of organizations. You can choose which one you prefer. However, be prepared for fundamental change if you select the non-traditional approach. This change also required a change of the entire organization or at least support from organizational leadership.


What glue organization:

In traditional organizations the glue is fear. We all need to earn money to make our leaving, and as long there is one person that can fire you, your incentive to work with others is fear. With the American health system, this fear is even worst. I know people that are still going to work just because of the health insurance.

In non-traditional organizations, the glue is the purpose. The purpose is not to make stakeholders richer. It is an aspiring purpose that group people together, even in tough times. Non-traditional organizations are spending time and effort to take away fear from the equation.

What is the compensation model:

Traditional organizations tag you as a role and pay you more or less what this role “worth” in the market (and that is the good case scenario). Your compensation is capped, unrelated to company performance (don’t make me laugh and ask about the bonus system). There is also no correlation between your actual contribution to the company and your compensation.

Non-Traditional organizations understand that profit needs to be shared. The compensation model is not capped, and it’s base on your contribution to the company. This model is an essential incentive for people to collaborate, although they manage themselves. It also proves the concept that each person needs to perform as an owner.

How performance and progress measured:

Traditional organizations are letting managers define your performance and progress subjectively. They can chat with other people, they can look at data, but at the end of the day, it is a manager decision (talking about fear again?).

Non-Traditional organizations are based on data. They prefer metrics to give an indication of how your performance trending. On top of that, they prefer to collect feedback from everyone you interact with. This approach provides unbiased feedback on your performance.

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