Adapted and developed from Ed Lawler’s original New Logic Principles published in From the Ground Up: Six Principles for Building the New Logic Corporation, Jossey-Bass, San Francisco, CA, 2000.
Principle 1 – Stakeholder and Shared Value
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Old Logic: Limited view of stakeholders and value-focused only on customers and financial returns.
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New Logic: Comprehensive view of stakeholders and value, encompassing societal and business benefits and social responsibility.
Principle 2 – Strategy and Business Models
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Old Logic: Only top executives contribute to strategy and business model design and leadership.
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New Logic: Strategy and business model design and execution must be understood and embraced at all levels of the organization.
Principle 3 – Operations
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Old Logic: Focus on efficiency and cost-cutting.
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New Logic: Focus on creating value for all stakeholders and ensuring operational excellence.
Principle 4 – People are the Source of Value
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Old Logic: Top management and technical experts should add most of the value.
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New Logic: Employees and stakeholders must add significant value and are a strategic asset and source of competitive advantage.
Principal 5 - Organizational Capability
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Old Logic: Hierarchy and silos rule; the organization is a secondary source of competitive advantage.
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New Logic: A dynamic, matrix-like organization creates organizational capability and capacity, making it the ultimate source of competitive advantage.
Principle 6 – Organize Around Products, Services, Customers, and Markets
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Old Logic: Organizations should be designed around functions.
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New Logic: Organizations should be designed around products and customers.
Principle 7 – Involvement and Control
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Old Logic: Bureaucracy is the most effective source of control.
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New Logic: Involvement is the most effective source of control.
Principle 8 – Organizational Culture
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Old Logic: Hierarchical process is key to organizational effectiveness.
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New Logic: Lateral processes are the key to organizational effectiveness.
Principle 9 – Leadership
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Old Logic: Effective managers are the key to organizational effectiveness.
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New Logic: Effective leadership is the key to organizational effectiveness.
Principle 10 – Technology
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Old Logic: Technology as a cost center, used mainly to automate and streamline business processes.
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New Logic: Technology as a value driver, strategically leveraged to innovate and create new business opportunities.
New Logic Principles of Organization and Management
"The new logic principles of management prioritize people over processes and recognize that employees are the true source of organizational success."
-Ed Lawler, 2000