ICG

Keeping a finger on the pulse of change or shaping it

“We need stability again…”, “When things calm down again…”, or “Things will certainly be less turbulent in the next few weeks…” – These are statements we hear repeatedly in our workshops or conversations. The desire for more stability and consistency is clearly noticeable. Even though there may be cases where things are dynamic “just for the moment” and then calm down again, the fact is, these are isolated cases.

Uncertainty is here to stay. So we must learn to deal with it: as individuals, as a society, and as organizations. It is therefore necessary to design organizations in such a way that they do not just operate in crisis or reaction mode, but they are fit for the future.

What does this mean? Fit for the future does not mean “being positioned in such a way that unplannable events do not stress and overload an organization”. Rather, it is about making sure that the organization remains capable of acting in the VUCA world and taking advantage of opportunities.

Agile approaches are helpful here. However, relying on agile methods alone is not enough. Being future-oriented requires a holistic approach. It includes “hard factors” such as strategy, management and structures, as well as “soft factors” such as leadership and culture. The actual design naturally depends on company-specific factors. In this context, it is worthwhile to consider or recall a few central aspects that almost always apply.

Strategy and management

It is no secret: The days when long-term, comprehensive strategies with detailed plans and measures made sense – if that was ever the case – are over. For one, reality often overtakes the best strategies and measures. Additionally, it has been shown that effective implementation cannot be detached from strategy development, but is ideally a living process.
Strategy work has proven to be effective, only if along a clear orientation – ambition, vision, purpose, strategic thrusts, or goals – it makes concretization and implementation very short-term, iterative, and adaptive, i.e. it allows learning and exploitation of opportunities. Thus, through participation, the feeling of responsibility (accountability) is broadly anchored. A specific approach that has proven itself many times is OKR (Objectives & Key Results).

Structures

Generally speaking, structures encompass everything that guides the cooperation and behavior of people inside and outside the organization. This includes processes, roles, the structure of the organization or communication structures, but also other structures that guide behavior, such as incentive systems of working time models.
Of course, the same applies here: The specific design depends heavily on the nature of the organization, the business model, the industry, etc. What is essential is that the design of the organization focuses on the following central questions: “What should the organization be able to do?” and “What are the ‘design criteria’ for the organization?” In addition to company-specific aspects, these are agile principles in the VUCA world: seeing the organization as a “team of teams.” The basic building blocks are therefore teams – ideally, teams that act autonomously within a defined framework, are interdisciplinary or cross-functional in composition and are consistently aligned with the market or the customer (external as well as internal) in terms of processes and mindset. In other words, the question of benefit, impact, and performance for customers or the respective stakeholders is always the focus and is systematically supported by processes, methods, and roles.

The organizational form can range from the classic matrix to very flat, low-hierarchy organizational forms or mixed forms (outlined by Kotter as a “dual operating system”). Future-fit organizations are ideally positioned to respond quickly to volatile conditions because structures are set up in a flexible way, and change, willingness and ability to change are highly developed. Ideally, then, even more far-reaching structural change, such as the restructuring of entire units, mergers, etc., can be managed, not without effort, but without major consequences.

Leadership and culture

However, all this only functions to the degree that the leadership is set up in a “suitable” way and the organizational culture promotes the diverse structures and acts as a constructive guide to action. Therefore, leadership in future-proof organizations means (again, more as a reminder than a completely new insight): less hierarchy and a more coaching and understanding approach.
Leading forces in the company are those that shape the context, give orientation, convey the meaning again and again or help to understand it, provide support and create suitable framework conditions. They develop and secure a culture of learning, openness, sincere customer and people orientation. A culture that understands leadership not only as a concept for managers, but sees the entire system of “leading forces” (which can also be processes or values).

Finally, a culture that does not overlook the fact that every person in the organization leads or should lead him/herself and is (co-)responsible for his/her development and can shape it. A culture that is aware of its own “Circle of Influence” and thus strengthens self-efficacy and resilience on both the organizational and individual levels.
This type of leadership and organizational culture, in conjunction with up-to-date, future-oriented strategy work and a suitably “fit” organization also supports a “healthy” approach to uncertainty in the longer term. In this way, chances and opportunities can be used consciously and quickly, in order to stay on the pulse of environmental change, or to even actively help shape it – keyword innovation.