3. March 2020
Use the variety of perspectives in your company to become more creative
How do we become more innovative?
This question is becoming increasingly urgent for many companies to keep up with the competition. Without innovation, time is running out for many companies.
The countdown is ticking:
- Is your company already in the starting blocks to »launch« the next innovation?
- Where does the innovative power in your company come from?
The potential for innovation have many companies. It is important to exploit this potential and thus strengthen the company from the inside out. This can mean giving space to lateral thinkers and also taking uncomfortable paths at times. With a disruptive, innovative force, even a monoculture can open up – and thus gain new, innovative perspectives.
Monocultures have a comparatively low complexity – and produce reliable, but also rather boring and predictable answers. Diversity, on the other hand, increases complexity; it counteracts simplifying response patterns – thus providing »blurred« answers with higher ambiguity. This is more demanding – but it also opens up the prospect of better, more groundbreaking solutions.
Learning to ride the tiger – jumping towards more innovation
A plausible thesis is:
»A company can only serve the market that it can internally map.«
This is how Dr. Rüdiger Müngersdorff from the management consultancy SYNNECTA, our cooperation partner in organizational development, puts it.
Illustration: SYNNECTA Diversity Insight Map®
SYNNECTA’s Diversity Insight Map® is a tool with which people are encouraged to engage in dialogue. The topics around diversity become visible and can be discussed.
A healthy diversity in the company does not only ensure that the products and services fit the market. It also promotes a forward momentum within the company that triggers new dialogues and generates ideas. The aim is to constantly rethink and reflect on one’s own certainties and thus be able to act tomorrow.
»Tensions in the company should be good?!« you might ask yourself now. – It is useful to differentiate two types of tension:
- A negative tension describes, for example, a climate of fear, of isolation or personal intrigue. Here, people feel insecure, shut themselves off and tend to only »work to rule«.
- Positive tension, on the other hand, refers to the creative energy generated by allowing different perspectives. Creative processes are not self-propelling, but usually hard work. The joint struggle for the best solution, overcoming mental barriers – the proverbial »out-of-the-box thinking« – all this requires a certain productive tension.
Even agile work or methods such as »design thinking« actively use non-conformist or external perspectives to increase the diversity and thus the creative tension within the system. Those who want to make their company the driving force behind innovations – even disruptive innovations – must not only endure this creative tension, but also actively use it for design purposes. In the free interpretation of a Chinese proverb: You must learn to »ride the tiger«.
Why does diversity become an essential concept for companies?
Promoting diversity in the company is one of the approaches to boosting creative, positive tension. Diversity is a collective term for a multitude of differences. At least the following so-called »diversity dimensions« can be differentiated:
- Cultural differences, often in the sense of ethnic-cultural or religious differences, are regularly understood as relevant differentiation.
- In society, disability is all too often a stigma that leads to a disregard for the potential of people with disabilities – a naive waste of resources from a company’s point of view.
- Gender: The »small« difference between man and woman is clear to everyone. Since 2017, the German Supreme Court (Bundesverfassungsgericht) has distinguished people who do not assign themselves to either of these two categories (official term »diverse«). Reality has always looked more colorful. »Girls play with dolls – boys with cars.« True, if you keep in mind (and preferably say it, too) that many girls also play with cars and many boys with dolls and figures.
- Age: We were all young once – and the hope unites us to become old. But that doesn’t save companies from inter-generational conflicts and misunderstandings in the workforce. Demographic change is fueling this tension: especially when young employees lead older employees – or when the »young« do not feel understood by the »old« – the difference in age suddenly becomes relevant for cooperation within the company.
- Sexual identity or orientation: »It’s a private matter after all« is the cry of naïve conformists. As those belonging to the majority frequently do not understand the concerns of the minority. But it’s not that difficult: Those who feel they have to hide »the private matter« in everyday life in the office or factory hall will be more secretive and focus their energy on secrecy – instead of on the next innovation in the company.
A decisive advantage for entrepreneurs: studies show that diversity in a company benefits them economically. Companies with high diversity are more innovative, have a stronger employer branding and a better working atmosphere. In short: diversity creates dividends.
To innovate you need to understand perspectives and recognize needs
If you want to strengthen the innovative power in your company, you should be able to change your perspective when searching for innovative opportunities. All too often, innovation processes begin with the question: »How can we improve our product?« – Sounds reasonable, but puts the cart before the horse. The initial question should rather be:
- What solution does the customer desire from our offer?
- What problem does our offer solve for the customer?
- From his/her perspective, what becomes easier, faster, better, cheaper …?
This »101 of product development« (but also of sales, marketing, service) is unfortunately often forgotten and many companies first look at their offers from the »technical« side. The result is technical improvements – but they often do not provide any noticeable benefit to the customer. The key question is: »What additional benefits does the innovation create to the customer – from his/her point of view?« Every innovation must pass through the bottleneck of the customer’s perspective – otherwise it is not an innovation but only a variation. In short: Start with the customer’s perspective – not that of your offer!
An example from the DIY (do-it-yourself) sector: Instead of further improving the existing drill from your range, for example by increasing the speed or lowering the price, you might come up with the disruptive idea of developing a strong adhesive strip – after you have understood that most people in the household only need comparatively tiny holes to hang up light objects (towel hooks, pictures, wall mirrors).
But this change of perspective requires at least two skills: On the one hand, you need to be able to cognitively engage with the customer, his context and his challenges. On the other hand – and this is often the difficult part – you have to be able to feel his emotional situation (his »pain«). You need to be able to sense the different needs of the client. So you need a high degree of social empathy.
And this is where diversity and diversity management come in: The more complex my internal cosmos, which I have to manage in my company, the easier it is for me to understand the complex worlds of my customers. Consider: A range of services for women – designed only by men; a machine for the Indian market designed only by German engineers; a range for young people designed only by »old hands«? – Yes, anything is possible, but the chances are high that the target group’s needs will not be met. More promising is the approach of integrating diversity and complexity into one’s own processes at an early stage.
Why diversity promotes agility in your company
Diversity expert Hanna Göhler points out that for agile organizations, the competent handling of diversity is an important prerequisite for being able to use the potential of agile methods. Agility is a cultural issue. She puts forward the thesis:
- »Only those who are aware of diversity in the group, appreciate it and make it usable, can be and work truly agile. This makes diversity a topic of system, culture, leadership and individuality.«
More on this in her readable article »Why agility and diversity belong together«. There she also explains the concept of »diversity learning« as part of a learning culture towards more agility. Hanna Göhler writes:
»Ambiguity tolerance« (i.e. the ability to tolerate ambiguities and differences or even better to accept them) is regarded as a characteristic of diversity awareness. It is also indispensable for the agile mindset. If this ability is lacking, people react to ambiguous and often uncontrollable situations in an agile setting with »linear thinking«. They fall into rigid, old, traditional patterns, the opposite of »being agile« and constructive diversity learning.
How do you set a base from which innovations can grow?
For managers it is important to create a common base and a stable framework in which the creative tension can stimulate ideas and does not become destructive. This also addresses questions of corporate culture, which should be characterized by trust, open feedback and a pronounced sense of community. This is the only way to build bridges and avoid typical silo thinking, e.g. between departments or teams.
Support the diversity and the overarching exchange within the company. Invite open dialogues and disruptive ideas. In workshops and at larger events, focus on the potential that lies in cross-hierarchical, cross-functional or cross-regional exchange. Allow a little more »colorfulness« in the company and make sure that your company is a place where positive tension can unfold its creative power.
For futher reading (in German):
Daniel Goetz
This article was first published by the author in agateno’s blog at www.agateno.com.
Photo: Matthew Schwartz by unsplash.com
2. March 2020
Few remarks on the announcement of the bad news
It is an event that captures the attention of the managers involved. Although it is only one step in a longer process, it is the central event because it sets the tone for the whole following process: the official first announcement.
Moderating such an event requires high emotional stability, the ability to perceive moods in a group early on and to address them sensitively. Without such control, misunderstandings, multiple sensitivities and unrecorded emotions take over the direction of the event.
It is important to involve all managers in the preparation – because they determine an important part of the evaluative assessment of the situation in side conversations, in their posture, in what they do not say and what they say afterwards – they are an important part of the social calibration. Often they are not involved enough, it is overlooked that they themselves are also affected and by preparing for the event and the process afterwards, they also have to and can clarify their own attitude. The mantra applies: Show presence!
It is understandable that intensive preparation is shunned again and again – one deals with an emotionally stressful and difficult topic and sometimes the desire to have already left it behind outweighs. However, with a joint intensive preparation of this event the foundation for the sustainability of the whole following process is laid and this process is not linear, it needs the ability to work iteratively as a leadership group and to deal with surprises, reversals and corrections.
Too often, very differentiated presentations are shown – they are politically and legally coordinated and usually too complicated. It is therefore important to work with the executives on stage to turn the complicated and differentiated slides into simple statements – at least when speaking. It’s all about striking the local tone.
Always too short, too loveless, only partially understanding the importance – the dialogue part of the proclamation. Here it is not just about asking questions, but about creating space for speaking. There are often only statements that ask nothing, but say what is happening emotionally. This space is of high importance, because here the people experience whether it is also about them or only about the handling of an economic problem. Here it is also conveyed that it is good, right and allowed to show emotions. After all, this is a situation in which then also the managers are no longer only preachers and explain, but also become visible and perceptible in their own emotionality. In these moments the feeling of togetherness, of being together, is created, even if the tasks and concerns are very different.
If an employee who knows that he will lose his job and who is still at a loss as to what to expect, goes to the responsible manager after such an event, by looking into his eyes and saying: »This is really bad and I don’t know what I can do now, but thank you for your clear words«, then together – the moderator, the managers and the group – have laid the foundation for a process in which everyone knows: We do the best we can in this situation and we do it for the community of all people who are affected.
Rüdiger Müngersdorff, Fetiye Sisko
Photo: David Straight by unsplash.com
2. March 2020
Transparency makes credible – the need for honest leadership
It is a classic starting situation: A general manager, a plant manager, a divisional manager is informed that significant redundancies are imminent in his area, that a site is to be closed or an entire business unit sold. There may have been a hunch, and yet it is always shocking. The person in charge experiences what he will have to communicate to the employees in the near future. And he/she very quickly feels that he/she feels left alone and that he/she only receives reliable information in slices. The situation is confusing and will remain so for quite some time. It is the first scene in a process that now follows, in which every scene has to be rethought and redesigned again and again.
SYNNECTA has been supporting companies and responsible managers for many years in the design of such processes, which focus on communication. It is a different kind of communication – it requires a much higher degree of transparency, honesty and credibility than standard communications and it cannot be delegated. The communication cascades are already problematic in normal times, in crisis communication they are dangerous – the uncontrollable infectious rumor bags are created.
Our affected manager has a first task – he/she must form a team, a management team, which is able to deal sensitively with the situation from their own concern and is prepared to show a high level of presence throughout the entire process. We know the closure process from managers who like to visit the headquarters in such times. The management team with clear knowledge of the task and an honest willingness to go down this path with all employees is the backbone of the process. It is the time when the local managers, the micro-politics learned in seminars and their own tactical behaviour have to leave behind. Fetiye Sisko, who has supported many companies in these phases, says that in the beginning, support always involves developing a common attitude, which makes it clear that the focus is always on all the people concerned.
The people entrusted with communication are too often still young employees, without their own network, with little experience and little influence on content. Their commitment is often remarkable and yet they need support. Because crisis communication has a few special features. Again and again we experience phases of confusion, anger and rage when discrepancies become visible on the various communication channels. In particular, synchronised external and internal communication is required – any discrepancies spread by the press, social media, etc. must be included in internal communication. This is the only way to prevent irritations from the outside to the inside and to avoid strong emotional reactions. Differences in communication create mood and the situation is unstable.
The lively Q&A is an important component in successful crisis communication – every question stands for a need and a necessity, every question must be answered. And if it cannot be answered in the status of the process, exactly this must be said and justified. This is the only way to actively shape the mood part of a crisis and, as experience shows, to prevent the emotional substitutes such as actions of sabotage, refusal to work, etc. This also makes it clear that crisis communication is an iterative process; none of them proceeds in the way that very clever people, who are far away from what is happening, have imagined in advance.
As we have already said, delegation to a communication cascade is not helpful – it creates differences in communication and is no longer controllable by the responsible management team. Therefore it is essential for us to communicate with everyone at the same time as often as possible. Dialogue is already important in a normal situation, here it becomes decisive. It is one of the aims of crisis communication to reduce rumours, and for this to happen, joint communication experiences are needed. They are emotional, sometimes turbulent in the middle – but what happens in a meeting does not happen outside. Of course, this requires an experienced moderator who is able to keep an overview even in emotionally violent reactions and who can behave with appropriate empathy towards everyone.
We have had good experience in organising communication meetings together with the works council, employee representatives and management. This is where similarities become visible and differences become transparent. Each side has a different role and yet they are jointly responsible for shaping the situation for the people. And here again, every concern is to be taken seriously. In one case, the management had a reduction target which in their eyes was marginal (below the 10% mark) and therefore did not consider extensive communication necessary. One morning, the managers came to the site and saw 100 scarecrows wearing black T-shirts by the fence. It was the number of those to be dismantled. It may hit 100 people in the end, but in the beginning it hits everyone. And the principle is, what you do to one, you do to all.
There are many important characteristics of crisis communication – its quality makes a big difference, for the employees concerned and for the company. It takes experience to design such processes – and always a high level of emotional competence. Managers who have to deal with insecure people on a daily basis, and who are often insecure themselves, need support in these phases. If the attitude in the management circle is right, a constant empathic behaviour can be learned. Transparency, honesty and empathy are essential behavioural aspects in these processes. We at SYNNECTA are happy to do this task, even where it is very difficult, if one thing is given: the responsible leadership wants to make the process as honest and appreciative as possible for all those involved.
Rüdiger Müngersdorff/Fetiye Sisko
Photo: Hanna Göhler
25. October 2019
In the last blog article we explained why the digital transformation is not just yet another change – and how you can master it. It has become clear that the digital transformation represents a fundamental change. And it demonstrated how a holistic approach can systematically analyze the effects of the transformation. The question today is: How can people be won over to transform?
Because one thing is clear: without taking the people along this path, the digital transformation will terminate in a dead end. Or in other words: those companies that manage to take their employees with them on the road to digital transformation will be more successful than those companies that fail to do so. If you want to successfully transform your company, you need to consider the seven fundamental processes that are at work in every change.
The seven fundamental processes of a transformation
Every change project and especially every profound transformation require a complex interaction of different processes. The »system concept« according to Trigon (Professor Glasl) identifies seven fundamental processes that have to be considered and managed. The model has been in use for decades and has proven itself in practice as a useful tool for steering transformation processes. The terminology of the processes is sometimes a little difficult to get used to; however, out of respect for the authors, we orientate ourselves here on the taxonomy of Glasl, even if we would occasionally choose other terms ourselves.
Overview of the central tasks of the seven fundamental processes of a digital transformation
The following processes are effective and must be observed in every transformation or change project.
- Psychosocial processes serve to influence the emotional aspects of a transformation.
- Diagnostic processes should create awareness for the necessity of the change.
- Information and communication processes announce news and make resonance and participation possible.
- Learning processes convey the competences and attitudes required for change.
- Future design processes serve the formation of opinions and decision-making.
- Realization processes lassen die Ideen Wirklichkeit werden.
- Change Management-Prozesse turn ideas into reality.
Important: Although the processes are interlinked, they do not follow a fixed chronology. They are therefore not successive phases, but at times also parallel threads of development. However, there are »typical« procedures that often prove useful in reality. More about this aspect at the end of the article.
Psychosocial processes
Psychosocial processes are central to the success of any major change. Behind this bulky term lie the emotional aspects that go hand in hand with organizational change. These are often not at the top of the decision-makers’ agenda. However, they are the critical success factors from the point of view of organizational development.
The central task of psychosocial processes is to positively influence the emotional aspects of a transformation. In reality, change processes are always associated with uncertainty and unforeseeable events. Especially in the digital transformation, the perceived uncertainty can be huge for employees, as professional identities change.
The protection or satisfaction of basic neurobiological needs is not only the task of the leadership, but also of those responsible for a transformation.
Examples
- The »digital transformation« is leading to completely new job profiles – while old job profiles and positions are disappearing or at least becoming less important. So for the individual employee, the question automatically arises: »Will my job still exist in the future?« – »Will my commitment, my skills, my expertise still be needed and valued in the future?«
- Restructuring goes hand in hand with uncertainty about future accountability and sometimes disciplinary responsibilities: »Who will be my boss?« – »Who will be part of the team?«
- The introduction of agile working methods (Scrum, Kanban, Design Thinking etc.) or the »agile transformation« of an entire organization lead to completely new processes, which also require a changed »mindset«. Not everyone wants to face this challenge: »Will I be able to cope with these changes?« – »Do I actually have to do this to myself?«
Diagnostic processes
Not every approach or every tool work equally well in every company. What was successful in one company may be taboo or inappropriate in the next. Important: The approach must fit the corporate culture. Diagnostic surveys can be used for all phases: Depending on the change, these can be useful at the beginning, during or at the end of a transformation process.
The central task of diagnostic processes, in addition to examining the »cultural fit«, is above all to »create awareness« of the necessity of change. A simple survey can become the starting signal for a change if it shakes the decision makers awake.
Examples
- 360-degree feedback across the organization can provide illuminating insights into the leadership culture.
- An employee survey can provide a startling picture of the mood in the company and thus be the trigger for a transformation of the company – as happened at the Upstalsboom hotel chain with its owner Bodo Janssen.
- With instruments to survey the corporate culture, the characteristics of the organization can be determined.
- The effects of a transformation process can be observed through online surveys, but also through regular cross-hierarchical presence workshops with managers and employees from other disciplinary areas.
Information and communication processes
In the classical world of change management, change processes were »rolled out« from top to bottom, along the hierarchy. In countless small groups of workshops, superiors were informed first and employees only later on; mostly with ready-made PowerPoint slides about the changes. Participation was only sporadic, if at all, and hardly more than a fig leaf. This approach regularly contributed to the failure of change projects. The key to the success of a transformation, however, lies in the participation of the employees. For this reason, dialogue events or other participation formats are crucial to success. The digital transformation in particular opens up many opportunities to report on the gradual success and to share »success stories« with the team.
Strictly speaking, information processes and communication processes can be differentiated. Communication is characterized by the fact that there is not only a sender and a recipient, but a dialogue develops.
In this sense, »information« refers to a one-way street on which decisions and news are sent out – e.g. in the form of video speeches, e-mails or on the notice board. The question is highly relevant, who I inform when and about what exactly: Content, tonality, time, medium, target group. Legal issues (e.g. information of the works council) also play an important role here.
With some transformations, special sensitivity is required. Particularly when it comes to staff reductions or changes in responsibilities, direct contact with those affected should first be sought. At the same time, communication to the entire company must take place very promptly in order to keep the unavoidable »office grapevine« as low as possible.
»Communication processes«, on the other hand, are characterized by the fact that they invite to dialogue and explicitly request direct feedback. Typically, this takes place within the framework of face-to-face events, in which both the response to the presented content is queried – and the participants are invited to get involved (see below). Dialogue events of this kind thus combine aspects of »resonance and participation«. As a decision maker, I can demonstrate personal commitment at these events and show how important the topic is to me (keyword »management attention«).
Learning processes
Learning processes in the stricter sense can include training and qualification of employees. The starting point here is often the question: »What new skills and competencies do employees actually need to have to be able to act in line with the new idea for the future?« In addition, social learning can also be used to design measures to promote the exchange of ideas among employees and thus support informal learning. This makes it easier to transfer knowledge from »tacit knowledge« – i.e. knowledge that is difficult to convey in writing or graphically. In addition, social learning is often a prerequisite for changing the mindset. And an updated mindset or new, changed attitudes are the rule rather than the exception in transformations. Especially in the digital transformation it is not only the new software programs and processes that need to be learned. Rather, the understanding or mindset must develop that learning becomes a permanent development movement. In the past, people learned a new interface that was valid for the next 10 to 15 years (example: SAP). Today, there are rather countless »apps« that require flexible familiarization. What we already know from smartphones as a natural part of our lives will also spread to software in business. On the private smartphone, we learned to click and type until we understood the (preferably intuitive) user guidance. As a decision-maker, I have to support this learning process and give the employees in the company the opportunity to try it out. Learning is a cultural characteristic and is therefore closely linked to the feedback and error culture in the company.
Examples
- Learning new software and new process sequences
- Leadership and feedback techniques
- Methods and tools of self-leadership
- Reflection on one’s own mindset in relation to agile procedures
At best, learning becomes part of the corporate culture. The formats for teaching competencies (knowledge, skills and attitude) have become more diverse in recent times, as the trends of »corporate learning« show:
Future design processes
Processes for shaping visions of the future serve to form the will within the organization and support the commitment of those involved. Well designed, they thus promote sustainability and increase the chances of success of subsequent implementation.
Just a few decades ago, processes for shaping the future were the exclusive domain of corporate management. Today, it is increasingly recognized that it makes sense to involve employees at an early stage in the design of ideas for the future. This insight refers not only to the conception of new ideas, but also to the sustainable implementation in the course of change. In short:
People find ideas better which they have helped to create.
The basic neurobiological needs of autonomy and self-efficacy play a central role here. The appropriate extent and type of involvement are strongly dependent on the respective company. The task of the leadership is to make the space for participation as large as possible. Digital transformation in particular allows – or even forces – many degrees of freedom – simply because many ideas for the future are still in motion and have yet to develop. There is simply no blueprint for digital transformation. This makes the involvement of employees all the more valuable; in terms of generating ideas – and above all in terms of sustainable implementation.
Examples
- Workshops with the management to develop a vision or a mission statement for the company
- Elaboration of a meaningful change story with the Core Change Team
- Large group events (in the style of Open Space and Barcamp) in which employees can contribute their ideas.
- Support for initiatives driven by employees (see »Working Out Loud« (WOL); more on this in the article on Social Learning).
Realization processes
The sustainable realization of the envisaged future idea is the central objective of every transformation. This is where projects and tasks are realized and implemented. Managers also play an important part as role models for the new culture. Often, a more modern understanding of leadership is explicitly part of the transformation idea (cf. our series on leadership of the future).
In the past, change projects were »rolled out«; today the focus is on participation at an early stage. It is not only about the perception of the resonance (as with the described communication processes), but also about the participation in shaping the future as well as the actual implementation of ideas. The processes of shaping the future and realization are therefore closely linked and run parallel at times.
It often makes sense to tackle targeted transformations relatively quickly and in small steps; and to communicate the realization of progress effectively (cf. information processes). The digital transformation allows the possibility to present innovation in an innovative way. As a decision maker, I can design communication in such a way that content (digital transformation) and medium form a unit here – in the sense of »walk the talk«.
Examples
- Kick-off events (»Big Bang event«) give the official starting signal for the reorganization of a company or the introduction of new software.
- Regular updates on project progress via various media (intranet or ESN, mailings, events such as Open Office)
- Symbolic actions (»flip the switch«) of the management board
Change management processes
Last but not least there are the change management processes. This includes all measures that serve the planning, controlling, coordination and evaluation of the transformation. Actually, the term transformation management processes would be more appropriate, since by no means only temporary change projects are affected. This includes the establishment of a steering body and possibly a further resonance group, but also contact with the relevant decision-makers of the management so that decisions can be made quickly.
Due to the significance of this task, it is important to be strongly positioned within the company in this respect or to obtain external professional advice.
Typical approach to steering the fundamental processes
As mentioned above, the fundamental processes are not phases with a »natural« sequence, but rather interconnected and in principle independent processes without a chronological order. From the point of view of transformation management, however, some sequences appear more frequently than others in everyday organizational development and can be described as typical. Here are three examples.
Case 1: After countless employee surveys, employees are »survey tired«.
Instead of a new survey (diagnostic processes), it makes sense to remind employees of the purpose of the change (future design processes) and to respond to their emotional sensitivities (psychosocial processes). In addition, there should be rapidly visible changes in the sense of »quick-wins« or immediate measures (realization processes) in order to strengthen the confidence in the change.
Case 2: The climate between the participants is negative
and conflicts prevent constructive cooperation.
The first priority is to clarify the relationships (psychosocial processes) in order to re-establish a workable basis for cooperation. A survey (diagnostic processes) can bring clarity about previously unrecognized moods in the company, which may smolder in the organization independently of the individual case of conflict. Subsequently, attention can be drawn to the joint shaping of the future (e.g. elaboration of a corporate vision/strategy).
Case 3: Employees distrust the management’s commitment to change.
If employees have lost confidence in the leadership’s ability to implement (after unsuccessful declarations of intent), »strong« and immediate symbolic actions on the part of management can »send a signal« and thus revive confidence in the management’s will to change (»This time they seem to mean it up there!«). Future design processes and realization processes should therefore take place quickly side by side. Afterwards, management should seek closeness to the workforce in order to overcome broken-up gaps (psychosocial processes).
Of course, the cases described above are very simplified and the measures are by no means to be understood as a »recipe«. Each transformation process is individual and brings with it its own challenges – and opportunities – and requires an individual approach. In addition, it is important to keep in mind that each »process« can include a wide variety of possible measures.
From the point of view of the decision-maker, it is important to keep an eye on all processes and to have them coordinated and monitored by internal and, if necessary, external transformation partners. Depending on the transformation and individual case, the processes have different impacts. All too often transformations fail because one or more of the aspects have been ignored. If you want to transform your company, pay attention to the professional management of the seven fundamental processes.
Daniel Goetz
Photo: anh-tuan-to-U by unsplash.com
This article was first published by the author in agateno’s blog at www.agateno.com.
Are you responsible for transforming your company? Then this question will be of interest to you: How can HR drive the transformation on an equal footing with management?
In March 2020, we will start our new »Transformation Partner« training course in Cologne. Find out more on our website hr-transformation-partner.com.
9. October 2019
Digital transformation is a fundamental change that can only be fully understood with a holistic model approach. The seven essential elements of an organization and their interrelationships can be well understood using the example of the digital transformation of a purchasing department.
Companies with a high potential for the future have a special mindset that promotes innovation. Innovative companies are characterized by a culture of innovation that supports pattern breaking and gives the »fools« in the company room to contribute. Interrupting patterns promotes innovation. Agile working also requires a completely new approach. Compared to the traditional procedure, the iterative approach of the agile method SCRUM with »retros« and »reviews«, for instance, is a clear pattern interruption. In addition, self-organization – whether in agile work or without this specific iterative element – requires a new relationship culture, i.e. new patterns in the relationship design. Last but not least, pattern interruptions also play a major role in the mega topic »digital transformation«; more on this topic in this blog post. When it comes to innovation, one often thinks of inventing »something«. However, digital transformation is a good reminder that you sometimes have to »reinvent yourself« in order to keep up and fit in with the modern times.
Transformation means more than just change
The classic »change process« usually describes a linear transition from an initial state to a target state. With a real »transformation«, on the other hand, one does not really know from the start in which target state one will end up. A transformation is highly complex and influenced by numerous unpredictable parameters – mind the »VUCA conditions«.
It is useful to have a model for this comprehensive consideration of the transformation. We use the »system concept« according to Trigon (Professor Glasl) for this purpose. It contains the seven essential elements of an organization. It makes sense to observe all seven essential elements and to analyze whether and to what extent they change during the transformation.
The seven essential elements of an organization
Here is a first overview of the character of the seven essential elements of an organization:
1. Identity (including concepts such as vision, mission, and purpose of the organization): What is our fundamental self-image as an organization? What is our contribution to society or (somewhat more profane) the economic system in which we operate?
2. Strategy (also corporate policy): what is our business model? Which principles or basic rules should guide us in our economic activity?
These two essential elements can be described as the »head« of the organization (or »cultural subsystem« in Glasl’s taxonomy).
3. Structures: These include the organizational structure (the organizational chart), the layout of the organization, and the design of the management hierarchy.
4. Functions: How are the tasks divided into individual functions and organs?
5. People: How can the climate in the company be characterized? How can the management style be described? What is the mindset (basic or specific attitudes) of the employees? How are ambivalences (e.g. conflicts and diversity) dealt with?
These three essential elements can be described as the »heart« of the organization (»social subsystem« in Glasl’s taxonomy).
6. Processes: How are the work processes in the company designed? How (transparently) is information provided? Who is involved and when? How are meetings organized?
7. Physical means: How modern is the infrastructure in the company? How is the company equipped with hardware and software? How many locations exist and how are they distributed regionally? How are the workplaces designed (open-plan vs. individual offices vs. home office)?
These two essential elements can be described as the »hand« of the organization (»technical-instrumental subsystem«).
Identity, structure and physical means can be described as the stabilizing (and in the long run rather constant) aspects of the system, while strategy, functions and processes, on the other hand, have a rather short-term and dynamic effect on the system of the organization. It becomes clear that the various elements are interdependent: If one element is changed, other elements of the system change as well. It is therefore a matter of conscious analysis and change of the entire system of the organization. An isolated change of a single essential element is not possible. In business practice, unfortunately, there is often the pretense that one can change a single element separately without touching or considering the others.
The practical benefit of the system concept
A model like this is not meant to provide simple answers. Rather, it helps decision-makers to ask smart questions. The right questions are often much more relevant to the success of a company than the quick answers. Therefore, the question: “What is the best constellation of the seven essential elements?” is pointless without considering a concrete context.
It becomes clear that there cannot be one »objective« answer to this question – but only a highly individual, temporary answer specific to the company. Therefore, a more useful question could be: “Which constellation is appropriate and useful for us in the current situation – given our history and the resources we derive from it and with a clear orientation towards our desired future?”
The digital transformation of a purchasing department analyzed with the model of the seven essential elements
The model of the seven essential elements can best be understood by means of an example: Let’s imagine a purchasing department of a large industrial company that is going through a digital transformation. The cost and efficiency pressure on purchasing departments is increasing. At the same time, the possibilities are growing as a result of the digital transformation. Big data, artificial intelligence and platform economy are just a few of the buzzwords that come to mind in this context. But even today these buzzwords have already a very concrete influence on the work context and the work organization of the people.
How the platform economy is transforming purchasing
But what are the effects of a platform economy when consistently thought through? Pricing is becoming increasingly transparent. Value chains are becoming increasingly integrated – and are developing into value networks. The cost structure of suppliers, but also that of producers, is becoming more and more public. The »poker face« in purchasing negotiations is becoming superfluous, as everyone is laying their hands openly on the table anyway. The rules of the game change fundamentally. Perhaps one realizes that one must invent a new game, in order to be able to remain further in the game. And this point is extremely important to keep in mind: It’s not just a matter of digitalizing the existing processes. Rather, it is a question of making full use of the possibilities offered by digitization. And this often goes hand in hand with an adaptation of business models.
So it is by no means just the »processes« that have to be adapted – even if these are the most obvious changes. Rather, the changes in processes often entail changes in hardware and software (»physical means«): data is automatically aggregated, analyzed and displayed so that employees can quickly gain an overview. This changes the decision paths and also the way in which the people in the department coordinate and work together.
But these are only the more obvious changes. The changed way of working can lead to changes in the layout of the purchasing department (e.g. dismantling silos – or vice versa setting up specialized sub-departments). In addition to the »functions«, changes in the »structure« (organization chart) can also be affected. It is even possible that the »strategy« of the purchasing department has to be adapted, since value creation now takes place in a different way – no longer through »hard negotiations«.
A transformation affects the self-image of employees
The most fundamental change, however, concerns the people themselves – their »self-image«, i.e. their professional »identity« as purchasers. The self-conception as a purchaser is changing due to the digital transformation. Where the purchaser used to be known for achieving good results by keeping a poker face even in tough negotiations, in the future the platform economies will negotiate the best price transparently and automatically. The human being as a negotiator in the narrower sense is no longer needed. The buyer must redefine his role and his function in this system. In the future the purchasing agent will be needed above all as a problem solver and »relationship manager«. People will be needed in particular when problems arise with suppliers or their products. This requires completely new competencies from the procurement staff; other values become relevant for the work.
In short: the self-image of the purchaser changes fundamentally. For the individual employee, this means having to reinvent themselves completely. Old skills and patent remedies no longer work. Previous values must change. However, this can only succeed for the individual if these values are also lived out in the company itself. It makes sense that the digital transformation outlined here also has an impact on the culture (and the »people« in the taxonomy of the system concept) of the company.
The basic neurobiological needs must be protected in the transformation
In a transformation, the leaders are challenged not only to be role models for the transformation. Leadership must also protect and satisfy people’s basic neurobiological needs. The human need for security and certainty is put to the test in a transformational process. The management can counteract the insecurity of the team by emphasizing and promoting »connectedness«. Especially when the perceived status or »self-esteem« of employees – e.g. through changed roles – is in jeopardy, leadership needs sensitivity to safeguard these needs. Especially in times of transformation, it is important to actively involve employees (need for »self-efficacy«).
Daniel Goetz
Foto: Ashwin Vaswani by unsplash.com
This article was first published by the author in agateno’s blog at www.agateno.com.
Are you responsible for transforming your company? Then this question will be of interest to you: How can HR drive the transformation on an equal footing with management?
At our SYNNECTA roundtable discussion on Transformation Partners on 15 October 2019 in Cologne, we will discuss solutions with you on how you, as an internal HR professional, can actively shape change in your company. In March 2020, we will start our new »Transformation Partner« training course in Cologne. Find out more on our website hr-transformation-partner.com.
