How Companies Organize Their Own Transformation
I would like to outline this by looking at the practice of social activity and transformation in companies, rather than as a theory in social science.
Imagine yourself as hunter who suddenly sets his sight on the silhouette of a duck.
If you aim at the duck, you won’t hit it. The bang of your gun would scare the duck away before the bullet could reach it. A hunter is familiar with this problem. He has to fire at a fictive trajectory of the duck. Does this mean that innovation is hitting a fiction? What distinguishes innovative companies? A high degree of intuitive adaptability and a hunter’s experience. How can individual skills turn into corporate goals? How can companies motivate employees to chase after a fiction which above all depends on factors that cannot be influenced?Our work environments will be redesigned and this means transformation. HR will have to stop their reactive role of offering employment and will instead have to design a product which is both stable and can leave room for development, using social and labor legislation. HR does not yet use the “New Works” platform much, due to a fatal miscalculation of demographics or due to old prejudices regarding the competency of HR. Based on our consulting experience in employee loyalty projects, we would say today, that the creation of an interrelationship via individual development and security is the strategic key to corporate innovation. An innovative enterprise culture must ensure development of the individual—and must unite collectives of individuals at the same time into a comprehensive “We”. Professional life and personal life must melt. The integration of a future professional life requires a new mindset, a new mental model allow the innovative organizational models to work and to foster free self-development within a stable “We-context”.
As specified above, HR has seven levers at its disposal to create such an interrelationship.
To set the seven levers well, effective managers (HR, Legal etc.) must have understood the correlations of social acts and gaps on the macro, meso and micro level. An example of misunderstanding, in history, is the production line process of Ford: the assembly-line production with a new separation of tasks and activities. The time saved lead to the afore-mentioned social gaps. The attempt to fill these gaps with money was effective in the short run, but it led to a wage spiral in the long run, rather than to the identification with the Ford brand. This means the employee’s identification with the company can be regulated via work tasks. If tasks are interchangeable or standardized, as in production or service, it doesn’t matter where or in which organization it is performed. Ford’s understanding has evolved to now appreciating the connection between loyalty and work task. Today, in production, there is teamwork—a backwards roll to Fordism. The application of multiple skills and the resulting increase in responsibility in production is supposed to lead to stronger identification with the task. Employees will not only want to execute sensible activities, but they will also want to determine these in the future. The catchwords “Sociocratie” or “Holocratie” develop into trends in the organizational theory of tomorrow. The director of an IT service organization once explained the following to me: “I actually don't care how other people work. It was just important to me that I didn't want to work like this.”HR and its sovereignty in the world of employment transforms into a being the designer aided by instruments of legislation. This means for HR to leave behind a sequential view of its organization and to reorient itself. If the approach of disruptive innovation is taken seriously, the newly formed labor market offers vast opportunities for changing one’s job profile. How can HR lead this transformation? The challenge of a fluid network economy lies in defining new working time models and places, because in times of the “knowledge society”, creativity cannot be tied anymore to the models of optimization related to production standards.
As places to work become more and more adaptable, the creation of the firm working sphere also has a new relevance. This is not only a question of designers, but it is just as relevant for the juridical frame. The future staff of a “next” professional life and innovation culture wants to work and be led differently. Enterprises must appeal to new motives, to a changed thinking about achievement. Classical organizational structures and career paths disappear from new and adaptable working models. To be armed for the huge complexity that comes with such a development, enterprises must raise their own complexity. The new communication patterns and employer- to-employee relationships require a modus operandi of variety and diversity. The mindset of the future workforce is not hardcoded to a given identity from a role or a job or to fixed expectations, but it relates to the legitimacies of a network economy. At the same time, this has to be compatible with the self-relation of the employees.Employment law and its proponents—mainly in HR—seem to oppose the degrees of freedom, of a dynamic development by means of an array of principles almost as solid as concrete. This is where the discussion about too much bureaucracy frequently begins; it is sometimes used to dissolve a fight for rights of employees. I believe this is the wrong approach. It is not a question of having too many laws, but of whether we are prepared to view our guidelines and regulations as a system of repression or as a buffet of design opportunities. Well, I speak with the naivety of a non-lawyer and I am surrounded by a cloud of ignorance when it comes to all kinds of risks. I am also wishing for someone at my side who evaluates the risk of my environment and who excludes every risk innate to innovations, a risk relating to employees’ behavior. Leaders who hide behind the line of legal counsels lack courage. In the future, leaders will have to stand in front of that line and decide for themselves whether employment contracts have 20 pages or maybe just 2.
HR and employment lawyers will have to decide how to coach leaders to enable them to distinguish between necessities of regulations and scope for innovation. Leadership must not withdraw from compliance rules and their application. Freeing leaders from their straight jacket of perfection and their superman role may enable this. Moreover, it must be possible to control different sides of power constellations such as influence, reputation and compliance. Leaders were drilled to have their staff on board. Temporarily, this became dictum in every management meeting. There was a perception that the right and legally correct information sufficed to change the acting people.
Organizations are structured by rules—rules of communication and interaction, of interpretation and action.[100] In the future, HR and employment law staff will have to ask themselves how organizations can change their rules. Is there such a thing as a rule for modification and evolution?[101] Up to the 1990s, sociology and business science observed the transformation of employment in organizations from the point of view of organizational rationalization strategies in the capitalist society. On the side of economics, the term “Change Management” (see Levin’s phase model) entered organizations. It seems that only a minority of consultants or leaders was given the key to change and only they were able to initiate change. The term empowerment meant giving the individual tasks but without giving them responsibility, as well. Former generations tried to fight for their rights to participate in work outside entrance gates of companies.
A team of young entrepreneurs like Larry Page, Sergey Brin and Mark Zuckerberg introduced a new understanding of power and responsibility, first related to their own role and then also with a view to the teams in their start-up companies. Their approach hasn’t changed as they became the multimillionaire CEO, and as the company exploded in terms of size.
Such patterns contradict the thesis that company development depends on the size of staff or on sequential planning of processes. The attitude of a framework-giving institution determines whether companies are innovative or not. Whether it has democratic legitimation or follows a capitalist founder motive is not relevant for the transformation of employment. It does become critical though, that the moral perception of rules is| Production organization | Transformation organization | |
| Function | Routine tasks: balance or eliminate disturbances | Analysis of disturbances to allow for transformation of regulations |
| Criteria | Effectiveness and efficiency of the operational target tracking | Creation of transformation willingness and ability |
| Typical instances | R&D, Production, Personnel, Controlling, Marketing | Organization development, in-house consulting, project management, coaching, think tanks |
Fig. 1 Difference between production and change organisation. Adapted from M. Moldaschel trumped by the chance of renewal. The moral use of power in organizations will be the determining factor.
The crucial question for the development of employment will be: how can a newly understood power of collective decision making replace the existing idea of production process improvement, thereby leading to a change in employment culture? Ulf Brandes, one of the “New Work” drivers, writes in his book “Management Y”: new innovation approaches such as “Design Thinking” comprise methods and tools as well as employment-cultural recommendations.[102] Success and innovation don't depend on regulations; the design of rules which guide the interaction between the world in front of and the world behind the facade of companies.
In his opinion it is a question of the distribution of and participation in decision making power.The change of perspective on the employers' side can be supported by distinguishing organizational regulations as to whether they are (i) primarily part of operational tasks or (ii) their permanent evaluation and adaptation. Manfred Moldaschl picks up on that in his approach of institutional reflexivity; however, his distinction between a production organization and a transformation organization is portrayed in an ideal-typical way (Fig. 1).[103]
Can Legal and its principles of order help recreate a seemingly lost stability and tranquility? The natural distance between a term such as innovation and a collection of principles such as legal texts might explain why not many people see a connection. We do see a connection of innovation and Legal for the future, because for us Legal will be a navigation aid. In fact, innovation and Legal must meet on a new surface, which acts as catalyzer. On the level of employment, which creates stable relations through task and role in a company. On the level of organization, in order to build new frames of learning and change. It takes more than job description and a salary. In fact, the job itself must be considered a product, which has to prove itself in a tough market.
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