The last years have seen radical change to the environment in which businesses have had to operate for success. The field is increasingly grasped by VUCA – volatility, uncertainty, complexity and ambiguity. Digitalization, globalization and growth of networking generate a degree of complexity that is increasing exponentially and is no longer manageable by traditional methods of leadership and cooperation. This alters the fundamental rules of creating and gathering value.
At the same time, businesses find themselves engaged in a War for Talent in light of a growing scarcity of skilled workers. Employer amenity and employee retention are ever more intensely crucial competitive advantages. Young members of the oft-cited Millenials and Generation Z have raised expectations of their employers. Against the background of an overall cultural development that increasingly emphasizes a striving for autonomy and individualism, they want their experience of life to be a lifetime of learning under ideal work conditions marked by intrinsic motivation and meaningfulness without dominance from above.
Success for a business is therefore defined by that company’s answer to the following two questions: How do we add value by distributing and efficiently tackling tasks under most complex conditions? How can the human factor be reinforced in the company and the potential of intrinsic motivation be meaningfully raised?
The role of management is central to this context. In a new form, it can provide the basis for enabling the above-named two-fold creation of value. Motivational research has identified meaning, autonomy and the sense of improvement as crucial factors of intrinsic motivation (see, for example, Dan Pink). The same factors at the same time support complexity manageability. It is therefore a pivotal component of agile management to design an environment that provides for these three factors to have a maximum impact for the people as well as the success of the company.
Purpose and framework: guides amid complexity
In the VUCA situation, clarity is eradicated by the complexity of stakeholder interests and demand, employees face a new situation every day: clear and firm goals as well as sticking to rules and processes are no longer effective. Instead of a firm distant goal that cascades ‘top down’ along a hierarchy, agile leadership raises an open field of goals that is iteratively approached and becomes more concrete with every step. Always applying the currently most attractive factors, a nearby goal is brought into focus and approached in the short term, to be reached with a precise method. Of crucial significance for the employees in this context is purpose: a clear and stable vision that provides direction and meaning without cutting available freedoms. As it adds meaning as well as value, purpose provides employees not only with a direction but also with intrinsic motivation and strong identification. Agile leadership replaces strict rules and rigid processes with frameworks and principles. Frameworks demarcate the space within which employees can autonomously create meaning and add value. Principles define a clear scope of behaviour within which it is still possible to react to individual situations.
Enabling self-organization in order to tackle complexity
Following Ashby’s Law of Requisite Variety, a more complex environment demands greater management complexity in order to be tackled. In VUCA situations, the classical hierarchical model with one top manager in charge of all decisions is prone to difficulties. The expert at the top becomes a bottleneck; the hierarchical model is too ‘plain and simple’ to match the complexity of the situation. It is therefore the central task of agile leadership to build up self-organized teams who can take decisions by themselves in autonomous processes. Self-organized teams massively increase the modality range of (temporary) leadership, cooperation and decision-finding, so that complexity is more likely to be mastered. At the same time, the autonomy entailed in self-organization is intrinsically motivating. Agile management must therefore enable and empower self-organized teams and keep them accountable.
Creating a system of continuous learning
In simple and straightforward environments, it is a proven method to first analyse a situation and then proceed to meaningful action on the basis of that evaluation. The VUCA situation undermines this process and drains its efficiency: complexity and dynamics radically shorten the lifespan of an analysis. In these kinds of situations, greater success has been achieved with a different process, namely to act first and create an empirical basis of experience, then evaluate in the short term which action was successful (and which was not) and eventually optimise the efficiency of each action and creation of value. It is a continuous learning curve, in which the experience of learning and helping others along become pivotal factors of success and essential motivators. The implementation of regular reviews (regarding the product/concept), retrospectives (regarding the type of cooperation) as well as permanent identification of impediments and clear feedback (regarding achievements and relationships) are crucial tools of agile leadership. All that cannot be achieved without establishing a learning culture in which mistakes are considered valuable opportunities for learning and put to good use. Fail fast is the central mission statement of agile management.
Traditional hierarchic organizations take the manager to be the driver who directly designs attainment and treats the field under their management as a machine to be perfectly configured and kept regulated, on course and well-oiled. The dominant metaphor for agile management, on the other hand, is that of a gardener who ensures that a living ecosystem continues to prosper and thrive. Agile management designs the environment, establishes the conditions, removes impediments, supports drive, fosters synergies, etc. Thereby, it acts first and foremost indirectly. It empowers and commits employees to be held accountable without abandoning them to their tasks. It makes sure that employees can adequately handle stress, conflict and tensions by themselves. It helps people help themselves. Agile leadership is therefore always also cultural and developmental work.
The paragraphs above deal with the agile management of teams; the same holds true for the management of whole organizations. Instead of changing organizations towards a tightly set and long-term goal by way of hierarchically directed change management from A to B, agile leadership will keep its own company in a constant process of transformation as a learning organization guided by the leading light of a clear purpose. In the past, strategic topics were driven into the company in top-down deployment. Now, in the VUCA situation, agile leadership ideally lets them emerge out of the self-organized potential of all employees; business fields are born co-creatively, tested on a small scale, then developed step by step and, if successful, enacted in the large scale. As in traditional organizations, agile management functions as a model: if you wish to introduce agile values such as commitment, openness, focus, courage and respect into the company, you must first and foremost integrate these into your own management work and bring them to life in your own behaviour.
Photo: Hanna Göhler
Post Scriptum: This text was initially sketched out in the context of an ongoing co-creative initiative on Agile Leadership by Robert Bosch GmbH and SYNNECTA. This blog will continue to report the outcomes of this initiative. The author wishes to thank the members of the Co-Creation Team, Michael Knuth, Jörg Jockel, Dennis Heine and Martin Hurich, as well as Christian Fust for their valuable contributions.
On the agile triangle (methods, structure, culture), one of the most difficult aspect remains that of cultural change; that is neither new nor surprising. What we call culture is a combination of many factors that cannot be grasped by causal thought and are therefore hard to influence by the usual methods of change management. Culture is not a thing that we change, it is something we live, that we bring to life by ourselves and our interaction with others.
There is a particular notion of the kind of person, or colleague, who we consider to be the basis of agile work methods, of work and life in agile organizations: it is usually a construct of young people from generation Y or Z. Structures that are more democratic, have a reduced hierarchy and are self-organized must be in touch with the life concepts of individuals if they are to work. It is no surprise that it has to be said: these »identities« are rare in the companies of today. Identities cannot easily be exchanged, it is not possible to simply adopt a new identity; yet we expect employees to do just that. In doing so, we experience that the models looking to a future of »new« work often fail to see the people performing in the companies.
We are facing the challenge of developing new identities for modern organizations. Not only companies can fulfil this task: in fact, it pertains to the social identity structures of our society.
Identity is rather a continuous process, in which people understand and design their life – in a psychological, social, political and philosophical dimension. A central aspect that touches on all dimensions is the understanding of work and the significance of work to the development of identity. This process is where we have to interject. That means that we need to address the significance of status, upward mobility, the meaning of life that is communicated through work in an accepted structure. Even where colleagues want to break down hierarchies today, their creation of identity cannot fit with the thought of a lateral career: they are attached to the expectation of hierarchical promotion and status gain.
As identity is a process, a negotiation between agents and by agents with structures, we can work on a process of identity for new organizational forms. This is where the boundary between work identity and social identity collapses; I can find the necessary conditions only in urban life designs.
As a process, it passes through several stadia. These include moments of confusion, judgemental comparisons with others, a tolerance for new forms of trying one’s own role, an acceptance of the new stage of identity, a development of pride and eventually the integration of the ‘work identity’ into the entire spectrum of the personal identity. It makes sense to describe this as a journey, which becomes easier when it is undertaken together with partners. It is probably necessary that these processes are accompanied. To achieve this, there are individual coachings as well as, especially, supervision concepts for groups. Looking for a way into this process, it is promising to address the topics of diversity and inclusion. Tackling these issues opens people up and lets them develop an openness for their own process of identity formation. At the same time, we must not overestimate the achievements that are available to a company in this process vis-a-vis dominant conditions and values. It will therefore be necessary to find people who are already on their way to living a different work identity.
SYNNECTA and the Pathfinders almost have a tradition by now! We met once again this year in Berlin on May 1st with CEOs of leading companies, inspiring speakers and about 800 talents from Allianz, Daimler, Siemens, Deutsche Bank, Deloitte and Techniker Krankenkasse. The CEOs chose a speaker on a topic that was relevant to them and invited about 100 talents from their own company in order to spend the Labor Day holiday together engaging in an intensive exchange on topics for the future.
Joe Kaeser (CEO Siemens AG) invited Dr. Jonas Ridderstraele, author of the book Funky Business from the year 2000 and Reenergizing the Corporation, How Leaders make Change Happen from 2008. The cultures of successful companies create spaces where creativity can develop and the willingness to take risks as well as entrepreneurship can flourish as distinctive values. Successful companies are highly innovative, easily ready to experiment and heterarchic. The move from hierarchic leadership to independent organization and the way guidance from the top is turned into lateral attention were just some of the insights Ridderstraela was able to present in a lively and enjoyable presentation.
Dieter Zetsche (CEO Daimler AG) brought along renowned dancer Eric Gauthier from Theaterhaus Stuttgart, who worked and danced with the audience in the Tempodrom under the heading of »Spirit«. Gauthier convincingly moved the people and got them to resonate.
Jürgen Fitschen (Co-CEO Deutsche Bank), was clearly more relaxed than last year, enjoying the last to weeks in his current post. He had invited »horse whisperer« Linda Weritz, a communication scientist and psychologist from Dusseldorf who specializes on horses. Linda Weritz is a passionate and successful dressage rider. She has developed a unique training concept that consistently respects and values the nature of horses and therefore makes it possible to train horses without any use of violence at all. It became very clear how the principles of her training concept can be applied to management in companies and how important and decisive empathy and trust are in management processes.
Jens Baas (CEO Techniker Krankenkasse) introduced computer scientist and artist Prof. Jürgen Schmidhuber. His groundbreaking research has revolutionized the idea of optimal forecasts made from past data. He deals with machine learning, neuronal networks, Kolmogorov complexity, digital physics, robotics, low-complexity art and theory of beauty.
Schmidhuber showed great courage when he introduced his Gödel machine for the solution of any computable problem. Using an asymptotic optimum theorem proof technique, the Gödel machine overwrites any parts of its code as soon as it has found proof that this will improve its future performance. We humans stick to old behavior and thought for much longer, even when we have long since recognized that something different will make us perform better in the future: we are »clearly programmed differently«. Add to that the enormous digital possibilities and robotics that create new perspectives – we were truly led towards »leading the future«.
Oliver Bäte (CEO Allianz) had invited Gary Hamel from the London Business School, who spoke about »Added Value«. He forcefully repeated the valuable thoughts set out in his most recent book (2012): What Matters Now: How to Win in a World of Relentless Change, Ferocious Competition, and Unstoppable Innovation. It is about rethinking and new thinking, independent organization and experimenting in a world of business that needs to increasingly move away from hierarchy and bureaucracy on the one hand in order to meet the demands of the customers and on the other hand to meet the young generation’s needs.
Markus Kerber (BDI) and Martin Pleindl (Deloitte) decided to bring in Prof. Dr. Yasmin Mei-Yee Weiss. She is a German-Chinese academic who spoke about »Digital Talent and Digital Leadership«. In her lecture, she cited the previously unpublished results of an extensive study on skills in the digital age. One of the requirements of digital leadership is proper technological and digital competence. This research, however, identifies an entirely different skill as the most important: the ability to bring together and lead »truly diverse« teams. We are eagerly awaiting publication of the research in the summer and will report in our blog.
There was a particularly moving, golden moment at the very beginning, when Julia Engelmann spoke right to the hearts of the audience. A bright moment given to us by the young actress and Poetry Slammer from Bremen with her poem! It was an inspiring, sunny day in Berlin.
However, at the end of Pathfinder 2016 it is tempting to imagine what it would be like if the tables were turned: what if the motivators and speakers were chosen by the talents instead of the CEOs, what if there was a little more time available for interaction, participation and dialogue? Doing so would use an important opportunity to reflect that dominant call to let go of hierarchies and foster independent organization and participation in the very design of the event.
The event organizer, the business newspaper Handelsblatt, also celebrated its 70th anniversary on the same weekend. SYNNECTA is extending its warmest congratulations on this proud day and on the wonderful event in Berlin.
It is the early 1800s. The British warship HMS Surprise is about to engage the enemy. The crew are all preparing below deck. The portholeopens and the captain climbs down in order to commit his men to the sea battle with the French privateer Acheron:
»Right lads (…)! (…) discipline will count just as much as courage. The Acheron is a tough nut to crack: more than twice our guns, more than twice our numbers, and they will sell their lives dearly. Topmen, your handling of the sheets to be lubberly and un-navy like. Until the signal calls, you’re to spill the wind from our sails, this will bring us almost to a complete stop. Gun crews, you must run out and tie down in double quick time. With the rear wheels removed, you’ve gained elevation. And without recoil, there’ll be no chance for re-load, so gun captains, that gives you one shot from the lardboard battery … one shot only. You’ll fire for her mainmast. Much will depend on your accuracy (…). Captain Howard and the marines will sweep their weather deck with swivel gun and musket fire from the tops. They’ll try and even the odds for us before we board. (…) So it’s every hand to his rope or gun, quick’s the word and sharp’s the action.«
Cut to a different scene: Same epoch, same situation, but a few more ships: A collection of vessels from all over the world are facing a united enemy armada. On the Black Pearl, the captain is preparing the crew for sea battle, as above, calling out at them from atop the railing:
»Then what shall we die for? You will listen to me! LISTEN! The other ships will still be looking to us, to the Black Pearl, to lead, and what will they see? Frightened bilgerats aboard a derelict ship? No, no they will see free men and freedom! And what the enemy will see, they will see the flash of our cannons, and they will hear the ringing of our swords, and they will know what we can do! By the sweat of our brow and the strength of our backs and the courage in our hearts! Gentlemen, hoist the colours!«
One of the crew responds with the call »Hoist the colours!«, then two, then all on board. The call spreads to the other ships – Chinese, Indian, French, African – and the colours are hoisted on the masts …
In the first scene, it is the Union Jack flying from the mast. The colours hoisted in the second scene show the Jolly Roger. Both examples are fictional, not historical. They are from blockbuster films: The first captain is Jack Aubrey from the film Master and Commander. The second is Elisabeth, a courageous woman who leads the Pirates of the Caribbean in the film’s showdown. Although these speeches were never actually given in that form in real life, they are paradigmatic for two juxtaposing philosophies of leadership and organisational models: Navy Command vs. Pirate Leadership.
The navy captain has already decided for himself how the battle ahead will be won. He is a brilliant commander and has designed an intelligent plan down to the last detail. His crew is divided into functions and is highly specialised. They are given precise orders, in jargon, telling them who will have to do what and when. The captain can trust that his order will not be questioned by anyone and that everyone will enact his plan to the best of their abilities. He is the boss: the most competent problem solver, the lone decision-maker, the clear giver of orders …
What does Elisabeth do, on the other hand? She merely appeals to her men’s freedom and demands that they all give their full commitment. She leaves the decisions of how the battle will be won to each individual member of the crew. She trusts that each of them will do exactly what they consider the right thing to do in the challenging battle ahead: that collective swarm intelligence will be superior to the enemy’s military command. Elisabeth’s efficacy as a Pirate Leader is not established until the first followers attest their commitment by giving their agreement. Then, their call spreads like wildfire and catches in the other units …
It is easy to draw an accepted parallel between the military and business. Too many words that are used in the economy recall the model function of the military (consider the origins of words like chief officer, strategy, tactic, etc.). It could be more difficult to position the historical pirates as a model for successful leadership. They are usually perceived as an uncontrolled and uncontrollable horde brought together from far and wide by coincidence, who contravene all rules and break the laws to terrorize the seas and caper trade ships with cruelty and no holds barred.
I am not about to legitimize and qualify the illegality of piracy. I do, however, believe that even centuries ago, the pirates created a historical model for successful self-organization with the leadership philosophy outlined above. The economist Peter Leeson has addressed the economic and social organisation among pirates in detail. In the Journal of Political Economy, he concludes that pirates developed »one of the most sophisticated and successful criminal organisations of history«.
Pirates were not at all a chaotic mob, after all. They did have a functioning organization. It rested on a few fundamental rules and a very large degree of self-organization. Thomas Häusler says that the »enemies of humanity«, as they were called by the official authorities, were in fact »true friends of democracy«. That is probably one of the reasons they were pursued without mercy in the absolutist age. The pirate crews elected their captain – for a period of time. It was possible to replace leaders at any time, for example if they proved to be too autocratic or cowardly. The captain only enjoyed absolute authority during attacks. The only other leadership position next to the captain was that of the quartermaster; no other hierarchies were in place.
A few basic prohibitions ensured order: hard punishments were doled out for violence against crew members, theft within the crew, cowardice in battle and gambling for money. The pirates’ codes, which every member had to swear on, often guaranteed that prisoners would be treated well and women respected. They regulated the distribution of the bounty and guaranteed social securities: The pirates had a balanced wage scale, with the captain getting no more than double and the quartermaster no more than one and a half times the share of the bounty as any other member of the crew. Compare that with modern-day CEO wages, which might be as much as 300 times that of the employees! Whoever was injured or even rendered invalid in battle was given a generous compensation and therefore good security. At the same time when the crews on trade ships were given short shrift, subjected to hard drills and maltreatment, the pirates therefore established a »democratic counter-model to the autocratic trade marines« (according to Häusler). It is not for nothing that so many marines defected to the pirates, even at the risk of being pursued by the state as outlaws.
I repeat: I am not calling for lawlessness and breach of compliance in organizations! But I do want to encourage to learn from the historical facts of the pirate era. As I see it – to put it bluntly – too many organizations and departments are nowadays still being managed like marine ships and are casting away a great amount of potential that could by salvaged with Pirate Leadership: especially so in the uncertain navigable waters of the VUCA world.
By now, the first organizations are courageous enough to give Pirate Leadership a try, with democratising structures, consistent self-organization and support for freedom of decision-making on all levels. Brian M. Carney and Isaac Getz published their book Freedom, Inc. in 2009, coining the apt and provocative term of liberated companies. Frederic Laloux offered a very impressive documentation of the potential that can be realized in self-organization in the 360 inspiring pages of his recent, pioneering book Reinventing Organizations (2014). This former McKinsey associate partner provides a detailed analysis of twelve organizations from a range of fields, countries and contexts (with as many as 40.000 employees!) and documents how the abolition of excessive hierarchy and a switch to self-organization can achieve stunning effects.
For example: The Dutch healthcare organization Buurtzorg was able to reduce the care effort per client by 40% (!) by switching to self-organized nursing teams. Ernst & Young estimate a savings potential of approximately two billion Euro if this model was adopted throughout Holland.
It has been argued that this is not possible beyond the NGO sector. The French automotive supplier FAVI has refuted that point: while all of their rivals have by now moved their production to China due to the lower wage costs, FAVI is the only manufacturer of shift forks to remain in Europe, with a market share of 50 percent. The product quality delivered by FAVI is described as »legendary«, their punctuality of delivery is considered »mythical« (not a single order has been delivered late in the last 25 years). FAVI attains high profit margins every year amid aggressive competition from Chinese rival suppliers, pays wages that are clearly above the average and does not suffer employee turnover. Laloux argues that this and other achievements are due to the radical realization of self-management in the organization. Down to the assembly line, the FAVI employees direct, manage and organize themselves in small teams (known as mini-factories), without a declared manager.
A film has recently been doing the rounds on the net: Augenhöhe (a version with English subtitles is available on the site.). It presents more organizations that value self-determination and real participation – successfully so. In February and March, the TV channel arte gave several showings of the wonderful documentation Mein wunderbarer Arbeitsplatz (unfortunately only available in French and German). Like the pirate leader Elisabeth above, the leaders of organisations in this film appeal to the »free men (… and women) and freedom« in the organization.
The organizations in the films and books above that are managed in the spirit of Pirate Leadership show that the focus on self-organization and freedom of decision pay off. Beyond that, most of the people featured in the portraits confirm that they never want to work differently again. This must be another key to the potential that Rüdiger Müngersdorff addressed in his last blog contribution. If, as surveys say, only twenty percent of employees are really motivated, how great is the room for development in an organization in order to win the remaining eighty percent?
With a bit more pathos, we might say that whoever has tasted the freedom of a pirate’s life will not want to return to a marine ship. That notion will strike fear into the bones of many managers. Yet I am convinced that this is in fact the very opportunity for organizations. The quote ascribed to the much-adored and highly successful Steve Jobs is no coincidence: »It’s more fun to be a pirate than to join the navy!«
Criteria for a Successful Transformation (Part 1)
Everyone knows that an organization’s viability for the future is decided by its ability to react and adapt to fast and fundamental changes to its conditions.
Many know how organizations can be modernized, transformed or »reinvented«; many know how to develop a vision full of meaning and significance, how to initiate personal responsibility and establish a culture shaped by trust – the basis for creativity, innovation, speed and agility.
Few recognize their organization as potential, a living organism with a proper soul and intention to unfold its mission in the world.
Finally, some businesses have really created organizations for a modern age that is viable for the future, that meet the requirements of the people and our shared environment on the earth.
The businesses of a modern age viable for the future are said to have attributes like an integral use for all stakeholders, a significant and emotionally binding object of the venture, sustainability, creativity, innovation, personal responsibility, teams that know how to lead themselves, a comprehensive approach, modern spatial concepts and flexible use of time, networked working and direct communication terrifically supported and shaped by digital technology, lean, speed and agility – in different degrees and combinations.
Different groups of companies are dominantly named in current discussions on New Leadership – New Organizations. One the one hand, the cult enterprises keep cropping up, including Apple, Google, Amazon, Facebook, which are all at the very top of the list of most admired companies (Hay Group/Fortune). On the other hand, we keep hearing from the sustainably successful classics, such as Gore, Semco, Morning Star, dm – drogeriemarkt, and the »Teal Organizations«, that have been celebrated in recent literature, e.g., FAVI and Buurtzorg. Finally, we come across initiatives like the team WIKISPEED – a car manufacture that started as a single project with volunteers only and has the potential to revolutionize the entire automobile industry.
Creative and initiative personalities create new organizations around a technological paradigm shift
A company like Facebook, which has only been active since 2004, develops its culture without being tied into a long company history. It develops this culture together with similarly minded digital natives in order to fulfill its mission to give people the potential to communicate, to make the world more open and to connect.
Personalities like Steve Jobs, Larry Page, Jeff Bezos and Mark Zuckerberg for the American cult ventures and Wilbert Lee »Bill« and Genevieve Gore, Ricardo Semler, Chris J. Rufer, Götz W. Werner for the classics, as well as Jean Francois Zobrist, Jos de Blok and Joe Justice are integral to the individuality and mission of their organizations, their companies.
It is clear that founders give a company its soul. For example, the attitudes and convictions of Bill and Genevieve Gore still shape the culture of their company. They established their business in 1958 and initially operated from the basement of their private house. By now, there are 10,000 associates worldwide in a flat organizational structure without an instructive hierarchy who work with technological innovation and success in multi-disciplinary teams. They do so in manageable business units in order to ensure direct communication. »No ranks, not titles« is alive, even though today’s actual business cards do bear titles, like »Global Leader« for a given division and others. The sustainable success of the company is greatly supported by the strong reduction in hierarchical culture and one-on-one communication at eye level by Gore. These same factors can, however, also limit the company, for example when Gore expands into other countries, such as China, where a stronger hierarchical orientation is culturally ingrained.
Joe Justice emerged in 2008 as the founder of a new generation, when he established his Team WIKISPEED as an organization that grew out of a blog about a technologically exciting challenge. One of this organization’s founding elements is utterly voluntary participation.
In 2008, he participated in the »Progressive Automotive XPrice« competition and gained shared tenth place in this global competition against the giants of the automobile industry. Prize money of 10 million US Dollars was awarded in this initiative supported by the US Department of Energy. Competitors had to meet the challenge of building a car that was able to travel for 100 miles (160.9 kilometers) in real traffic conditions on one gallon (approx. 3.8 l) of fuel.
He began alone and reported his progress and obstacles in a blog. This way, he found 44 volunteers in four countries, who worked together to create a prototype for the competition within three months. Team WIKISPEED achieved a »sensational« development cycle of seven days, where the traditional automobile industry takes years. Joe named three enablers for this incredible speed: Agile, Lean and Scrum.
Development takes place in modules in separate teams. Every task is completed in pairs, so that knowledge is shared on the spot and time-consuming training can be avoided. All programs and tools that are used, which did not even exist ten years ago, are »open source«.
Use of material is kept to a minimum and waste is avoided. Visualizations of the processes immediately reveal inefficiencies and allow for their removal. The use of the project framework Scrum, which has proved itself in software development, made it possible to be stunningly fast in the development of an automobile prototype.
Team WIKISPEED now has 1000 members in twenty countries, building and selling cars. All participants provide their work and knowledge free of charge; any attained profit is distributed among the community.
With his passion and the belief that it is possible to achieve decidedly more environmentally viable mobility, Joe Justice found similarly minded people. The realization of a cooperation that relies on »sharing«, the digital options applied to permanently connect the scattered teams and ensure exchange as well as the transmission of methods and tools from software development to traditional heavy industry are elements of this rapid success. However, a public call for support suggests that Team WIKISPEED has reached its limits and that the community will have to provide new impulses in order to continue its success story. Environmental awareness, passion, volunteering, knowledge sharing: these are the striking features of a new generation of founders. The consistent application of freely available tools and agile working with lean concepts and the SCRUM project framework are the striking elements of equivalent modern organizations. Joe Justice is striving for his model to also be put to use in finding solutions for great issues of society such as tackling epidemic disease.
How, though, can traditional, hierarchical companies be modernized: companies which were not placed into a New Era by their founder and entrepreneur, but which have a long history and were established at a different time into completely different conditions?
FAVI is a successful subcontractor and automotive supplier. The company was established in 1957. In 1980, Jean-Francois Zobrist attained the post of »directeur général«; he would remain in this responsible position for 29 years. FAVI was successfully transformed to provide toom for personal responsibility, ownership and a comprehensive concept as described by Frederic Laloux in his inspiring book: Reeinventing Organizations, A Guide to creating Organizations inspired by the next stage of human consciousness (Brüssel 2014).
Zobrist faced a company with five hierarchical levels and many processes and functions, mechanisms that were exclusively concerned with employee control. Zobrist spent some months attempting to prepare his leadership team for changes, experiencing vehement resistance.
For nine months after he had taken over the management, he visited the production line every day, spoke to every one, asked many questions, but was also glad to answer all questions put to him; he tried to take his managers with him on his journey of modernization, but did not succeed. Then, he addressed his entire work force. He shared his conviction that the way in which the people in the factory were managed and controlled is unworthy and his belief that they deserved a different treatment, that they deserved trust. He announced concrete changes, including the removal of clocking, adaptations of the salary system to fixed salaries, opening the store and trusting that every one will take what they need for their task as well as the abolition of a separate canteen for managers.
He acknowledged that he himself did not know the exact shape that operative work should take in the future and invited every member of his audience to take part: »I suggest that together we learn by doing, with good intentions, common sense, and in good faith.« (Zobrist, La belle histoire de FAVI, p.38, cited in Laloux Frederic, Reeinventing organizations, p.273)
The managers opposed these changes vehemently. Zobrist made it perfectly clear that he was not going to go back on any of his decisions, but confronted them with the next step of transformation: the introduction of self-leading teams. As this meant that there would be no more management positions, he gave »security in insecurity« to his managers: Nobody will be let go! There will be no salary cuts!
Everyone was challenged to take a look around and find or create a meaningful role. Once he had abolished management roles and introduced personal responsibility, Zobrist gave no further orders, but invited the employees to develop sensible solutions, an expedient structure without hierarchy and practicable methods of operation.
Zobrist had gained a lot of trust as a person during the first months and all the measures he introduced reflected this value in the entire organization. In this case, a credible, initiative personality successfully transformed an existing organization and gave a new soul to a company. Yet, we do have to acknowledge the fact that FAVI is a company with 400 employees in one single location.
The examples above sketch out three initial criteria for successful transformations and radical renewals of a company.
- Success is significantly linked to the personality, intentions and values of the entrepreneur and/or the CEOs, as well as of course to how they translate this into their concrete Change Leadership.
- The second key to a successful transformation are clear, consistent and »lastingly« reliable structures of power and decision-making.
- The third factor of success is the decision to actively mobilize a management coalition that is not conceived in terms of hierarchy for the change. This would be a management coalition that does not target the »upper« managers, but people on all levels and from all areas. These are people who recognize the need for change, who understand the soul of their company and can bring others to resonate with this.
It is intriguing to see whether traditional large-scale enterprises are able to fulfill these conditions.
There remains one prevailing question: How will it be possible to pick up on and realize these keys to success for a radical modernization in such a way that they can even be applied to traditional and hierarchical companies with complex structures, power functions that are divided and subject to temporal limits, and a long history?