After reading the story “Sun Hydraulics”, I am wondering whether this is a real story, or just a literary work that the content is not necessarily based on fact. So my below analysis is based on the assumption that this is a real story.
The 10 years successful operation of Sun Hydraulics Corporation was quite special, which most of the business leaders cannot agree with this approach, but Bob Koski made it and achieved the business success by this special approach. The success was because:
1) Bob understood the hierarchy organization and its disadvantages. This helped him to design a more effective organization structure to conduct the business.
2) An effective climate that motivates the people to enjoy the work and allows employees to focus on their job interests.
3) Family groups made people worked very closely and effectively.
4) This “horizontal” structure created the culture that everyone is the owner of the business, which made employee more responsible. In another word, employees felt that they were not only working for the company, but also for themselves.
Though Bob and his Sun team achieved lots of successes in the first 10 years, however I do see a lot of challenges on the way. Let me audaciously predict what will happen in the future.
Sun will continue standing as an industry leader for maybe 10 more years. But after 1995, when most of Sun’s competitors moved their factories to the cheap-labor countries, those competitors became very competitive especially from product price perspective. On the other hand, competitors significantly improved their products quality and delivery lead-time after globalization. Sun wanted to “be global” as well, but it needs to solve below challenges:
1) Horizontal structure might work for 170 employees. However, with quick business expansion, this structure will make the organization more and more ineffective.
2) No clear job roles and responsibilities are