Management of organizations in the era of great transformation
Part 2: The great transformation phase - proposal of a holistic and long-term management response to the complex challenges of our time.
This is the second article in the series dealing with the topic of the great transformation. I have already explained in detail in the first article that this is a large subject area that goes far beyond currently frequently discussed topics such as digital transformation, work 2.0, home office work and New Work.
In this article, I now propose a process that I consider meaningful and promising for harmonizing your company or organization as well as possible with the challenges of our time in the purpose of a location determination and realignment. This dynamic process, which is not to be understood as a concept or model, has the goal of promoting a more holistic way of thinking, which ultimately also leads to new types of structures, processes and an image of man that is better suited to the demands of our time. In my view, this is long overdue, because time is pressing, new approaches are required, and untapped potential that has been overlooked so far should be uncovered and utilized.
Today, it is hardly disputed that we are in a major transformation phase. But what this great transformation means for us, the economy and our society in concrete terms is still open in many areas – it is discussed in different ways and is therefore by no means clear. In my previous article, “The era of the great transformation – we are only at the beginning,” I therefore took an initial look at what this could be about from an overarching perspective.
In doing so, I also wanted to remind people that this is a very complex topic that goes far beyond digital transformation.
So this article follows on from the first and aims to present suggestions on how your company or organization can successfully face the complex challenges of the great transformation.
To better understand the connection between the two articles, it would be beneficial to know the content of the first article.
What this is about
It is about finding a long-term oriented and as clear as possible entrepreneurial answer to the challenges of our time for your company or organization.
Before this process can begin, however, it is necessary, in my view, to first make some preparatory decisions.
Era of the Great Transformation – New Demands on Management
The era of great transformation places new demands on management. Why is that? What is different from before?
From my point of view, managing the great transformation is a completely new entrepreneurial challenge because it not only involves a great deal that affects all of us, but also because
- the sum of the challenges to be met is unique;
- it is a matter of anticipating a future that is not yet very clearly defined, but which is likely to change all areas of our lives significantly, creating extraordinary planning uncertainty (what will others do, what external influences will have an impact on us, what flexibility do we need to retain?);
- the dynamics and complexity in the world are constantly increasing, making it more and more difficult to orientate ourselves precisely, to plan reliably and to keep up well with developments;
- time is pressing and other resources are also becoming increasingly scarce.
The first thing you should do is decide what your basic mindset is in terms of your response to the big transformation in your business or organization.
Active or passive attitude
In the first article, I suggested that the challenge of the great transformation should not only be seen as pressure from outside, but also as an opportunity to critically question what has existed up to now and to leave behind what is no longer useful, outdated and in need of change.
Of course, you can also approach this differently. So how do you decide?
- Passive management response focused on adaptation
If your management response to today’s challenges is rather to continue on the existing path with modifications, to trust in future technical solutions (from others), to wait and see, and then to react to external developments in due course, then this is a dangerous attitude. In the worst case, it could even lead to you potentially putting the existence of your company or organization at risk with regard to the future.
- Proactive management response focused on helping to shape the future
In my work, I consistently advocate a proactive management response to the great transformation that is consistently geared to helping shape the future. In the long term, and based on my broad professional and life experience, this is objectively the more promising and thus much better management response to the challenges of our time.
We are at a point where there is still a lot of untapped potential in people, companies and organizations. In order to be able to use this potential, we need to be open to new ways, approaches and perspectives and, in principle, to allow all employees to critically question what they already do or have done.
Ultimately, this calls for an open and transparent corporate culture in companies or organizations in which top-down and bottom-up communication also functions very well.
In no company or organization will only one or the other attitude be found. Rather, there will always be a mixture of the two. However, if you clearly decide to actively help shape the future in your company or organization, this is more than just continuing on the path of partial modifications.
Actively helping to shape the future is oriented toward today’s challenges, makes a contribution to overcoming them, and takes a view that goes beyond one’s own company or organization. It will ultimately also lead to innovations, new products and services, and will result in new ways of management (new approaches and perspectives, new management and leadership models).
So, in my view, if you opt for the proactive management response, a very good basis has been laid for a realignment – in the purpose of the dynamic corporate development proposed in this article – of your company or organization.
Enterprise or organization as a living social system
Since the process of dynamic corporate development proposed below relies heavily on transparent, rapid and open communication channels, and involves all employees at all levels in the process as early and actively as possible, it is next necessary to take a closer look at the corporate culture.
More specifically, it is first about the way of thinking, the prevailing worldview, and the openness to new ways, ideas, and approaches that help shape your corporate culture. I have already discussed this topic in the first article.
- The mechanistic world view put to the test
The mechanistic worldview is still widespread in our cultures. One indirect effect of this is that it leads to organizations that are still strongly based on classical management and leadership models. Such organizations lead to structures and processes that are usually relatively sluggish, contain considerable potential for conflict, and involve major frictional losses. All in all, this leads to too much human and organizational energy being wasted. There is a relatively strong emphasis on hierarchy, management is based on the top-down approach, and tasks are usually distributed in this way.
This ultimately leads to a corporate culture in which an open attitude towards employees outside the management and new approaches or ideas is not possible. As a consequence, there are too few transparent and rapid communication channels, which are needed in order to recognize and then systematically exploit unused potential, and they cannot be established so easily.
In my view, this is not the agile, i.e., flexible and rapidly adaptable organization that you will increasingly need to master the great transformation.
- Run the company like a living social system – New Management
If, on the other hand, you understand your company or organization as a living social system, the previous management and leadership models are automatically put to the test. After all, a systemic view of your company or organization suggests that it is by nature a complex, living and dynamic ‘organism’ that is embedded in its environment in a variety of ways.
In order for your company or organization to function optimally, it should increasingly be viewed in its entirety as such a living complex organism and be designed and managed accordingly.
In order to survive in our complex and dynamic world, your company or organization will increasingly have to be organized and managed in such a way that it is as flexible as possible and can adapt quickly to impulses from inside and outside (lively, dynamic structures and processes, including free-flowing communication and vital relationships both internally and externally). In my view, this is one of the great management challenges of our time.
Based on my first article, the above remarks and my long practical experience, the question for me is not whether or not the systemic view should become increasingly established in corporate practice. It is rather the case that I consider this to be necessary in order to be able to successfully master the great transformation in the long term.
In preparation for the process of dynamic corporate development, the corporate culture should therefore first be specifically prepared for this.
Establishing an open corporate culture that is willing to change
Visions, ideas, concepts, products and services are ultimately created in the minds of us humans, i.e. in the minds of your employees at all levels.
It is also the case that those employees who are most familiar with the day-to-day business in their area of responsibility and who thus know the processes best (strengths, weaknesses and untapped potential) are often to be found close to the grass roots.
My work in practice has repeatedly shown me how much potential in companies and organizations is not used, i.e. lies fallow, because this is not sufficiently recognized and such potential is not methodically and systematically developed.
In my experience, this is usually due to the fact that
- employees outside management are not given enough credit for creativity, vision and innovation (outdated view of people),
- employees in traditional management structures are only allowed to communicate with higher hierarchical levels through their superiors (filter function),
- direct superiors do not systematically raise or allow suggestions from the grassroots because they see such suggestions as a potential threat to their position that could undermine their professional competence,
- as a result, valuable impulses, ideas or suggestions for improvement from the grassroots never reach the decisive positions in the organization.
Transparent, open communication
However, organizations will be increasingly difficult to manage successfully in the future if the potential for ideas, creativity and know-how is not communicated directly and openly throughout the entire organization – and used in the best possible way.
In order for your company or organization to succeed in such a major challenge as co-designing the great transformation, a starting point should be created that consists of really WANTING to shape – not HAVING to adapt – and a corporate culture that is characterized by an honest, direct, transparent and open communication culture.
To ensure this, employees at all levels should therefore be integrated into the process of long-term corporate development as early as possible and in such a way that they can contribute their know-how and their potential for ideas and creativity as unfiltered as possible to shaping the realignment of your organization.
Management commitment, patience and time
Preparing your company or organization for the process of dynamic business development requires a great commitment from your management – and patience:
What has settled in the minds of us humans in the course of our upbringing/socialization and training (conditioning), what we can no longer use in terms of outdated thinking and what thereby slows down or could slow down the further successful development of the company or organization, must be carefully elicited.
Then, through specific training and communication, employees at all levels can be prepared to participate constructively as timely and open-minded actors in the successful realignment and shaping of the new organization.
This transformation, which therefore begins in the minds of the employees and then gradually transfers into a new corporate culture, will take time. But because this step is so important in the whole process, it should not be shortened.
This preparatory transformation of the corporate culture is achieved through targeted training and communication programs, for which I would now like to make some suggestions.
Transformation through training and communication
As I have already explained above, encrusted structures, ways of thinking that no longer serve any purpose, management and leadership models should first be softened through targeted training and communication programs in such a way that space is created for the new.
Before your company or organization can take on the challenges of the great transformation in a targeted manner, a corporate culture must first be established in which the introduction of new ways, approaches and perspectives (unconventional thinking) and the questioning of the existing or established is explicitly desired and encouraged.
As I have already suggested, this can be achieved through well-timed and targeted training and communication that involves or actively involves as many employees as possible at all levels of the organization in the process from the outset.
Suitable training objectives can be derived from the above text, among others, but must ultimately meet your own requirements.
Nevertheless, here are a few suggestions for training topics that would be essential from my point of view:
- Preparation for your company or organization to proactively embrace the great transformation. How should this be done, what should the process of dynamic corporate development look like?
- Convincing why a change in thinking should begin in the direction in which your company or organization is understood as a living organism. It should be conveyed that the future organization will therefore be designed as a dynamically functioning and rapidly adaptable system. Inflexible, rather rigid structures and processes should be dismantled – outdated and obsolete things should be left behind.
- Training a more holistic view and a way of thinking with more breadth, in larger periods of time and large contexts. In the future, the company should be perceived even more as a responsible member of society, with a well-maintained and functioning network of relationships both internally and externally. Systemic thinking is thus trained.
- Convincing why and to what extent still prevailing classic management, leadership and thinking models should be replaced by new, more modern and agile ones. Training on how to ensure faster communication channels, top-down and bottom-up, and how to use the untapped potential more systematically throughout the organization.
Employees outside the management
In this phase of the process, it seems to me to make sense to prepare these employees for the coming changes as far as possible from the outset, above all by means of targeted and well-organized communication.
Whether training similar to that for managers makes sense here, or to what extent, will depend to a large extent on the specific circumstances in your company or organization.
In any case, it makes sense to start training at an early stage,
- that teaches holistic and systemic thinking,
- which explicitly desires and promotes the critical questioning of the previous or existing as a component of the new corporate culture,
- which calls for the uncovering of unused potential, the introduction of new ideas, approaches and perspectives, and the submission of proposals for the concrete contributions that your company or organization could make to mastering the great transformation.
Preparing for the new world of work – new work, work 2.0
I will show later that the realignment process discussed in this series of articles can ultimately also lead to new forms of work, management and leadership models, which may even give rise to an entirely new type of manager.
Overall, new forms and models of work, such as those discussed in connection with new work, agile organizations, agile management, work 2.0/working world 4.0, etc., offer a great opportunity to achieve a sustainable paradigm shift toward more dynamic and effective forms of work.
Understanding dynamic long-term corporate development
The process can begin – Dynamic, Long-term corporate development at a glance
If the above preparations have been completed, your company or organization is, in my view, in a very good starting position to be able to successfully go through the process of co-creating the great transformation, which I will call dynamic corporate development in the following.
To set the mood for the next article, here is the graphic representation of this realignment process as I see it.
Outlook for the next article
In the next article, I will go into more detail on how you can create an inventory of today’s challenges for your company or organization in order to then systematically align the actual process of long-term realignment of your company or organization – as illustrated in the graphic above – with it.