Corona has changed the world. Topics like value creation, liquidity and humanity have changed. Karen Wendt and Petra Streit appeal to all managers act more agile and promote a participatory corporate culture.
The Corona crisis has unexpectedly hit the majority of Swiss companies. For example, in the five sequels about the digital transformation, Digital Switzerland writes that COVID was a digital stress test for the companies. At Digital Switzerland it sounds like this: in addition to the digital infrastructure, we need a space of ideas, a digital knowledge society and new relationships.
Many companies are waiting for the crisis to end
But where do Switzerland’s SMEs stand in this ecosystem? Many companies were able to secure their financial liquidity quickly, so they didn’t have to file for insolvency right away. But what now? A large amount of companies that experience a crisis because of COVID-19 are now waiting. They are waiting until the crisis is over, until the economy has recovered and they can move on.
This contains two fundamental errors:
- First, the assumption that the future will be as the past was. This is expressed in the assumption that when the corona crisis is over, people will simply be able to “move on”.
This linear thinking helps to maintain stability, but we ask: Will there (have to) be a process for the companies, triggered by this crisis, that leads from the old to a new stability, i.e. a transformation process? If so, then waiting is a very bad option and does not help the companies one bit.
- The longing for stability is understandable. The second misconception is to believe that the complexity of our world demands complex solutions. This is the error that has led to the fact that every complex problem requires an even more complex solution. And this is what companies (rightly) have to worry about. This trend is widespread in society and politics. According to W. Ross Ashby’s law, the greater the variety of actions of a system that controls another, the more disturbances in the control process it can compensate for. It is true that in crises it is important to be able to adopt as many different perspectives as possible.
Linear thinking is not the right approach
The authors read Ashby’s book “Introduction to Cybernetics” with fascination. However, Ashby’s approach comes from game theory, which in turn is based on mathematical simulation models. And where do the numbers for these simulation models come from? Right, from the past. So again, linear thinking, but in times of volatility, uncertainty, complexity, and ambiguity (VUCA), this is not the right approach. By the way, VUCA is a term that was coined by the American military during the Cambodian war and is now used in agile management. Because decisions under uncertainty come from what Kahnemann so often quotes: Unknown Unknows and for these, there are no predictions if they appear. So it is the U for the uncertainty that forces us to find simple solutions.
In Enjoy Projects the author Gerhard Friedrich writes: “If one were to interpret Ashby’s law as all business authors I know do, then a complex project characterized by a variety of possible outcomes would have to be managed by a correspondingly complex project organization. If one recognizes deviations from the plan, then one reacts with even more complex structures and processes, because: According to Ashby, complexity can only be mastered by complexity. But: This is exactly the kind of trap that Paul Watzlawick so aptly described in his “Instructions for Unhappiness“: “More of the same“.
Paul Watzlawick sees it as “one of the most successful and effective disaster recipes that has developed on our planet over millions of years and led to the extinction of entire species”.
Often it is also this perceived complexity that makes us wait and hope. Maybe everything will be fine by itself.
So to anticipate the answer to our initial question: Yes, we believe that a transformation process is needed.
Too complex? Let us break it down for the SME.
Human as biological beings
First of all: Yes, we are in a crisis. This is evident from the fact that predictability, probability of occurrence, decision-making reliability, the effects of measures and much more are all interrelated in a chaotic and constantly changing relationship. A classic VUCA environment.
Let’s take a look at the only constant in this system: the human being. From day to day, we were torn out of our daily routine, out of our comfort zone and banished to our home office. What for a long time was considered impossible, even unreal in many companies, was suddenly possible, even necessary. Not that it was easy. Many people had great difficulty in reconciling work and private life and had to expend a lot of energy to do so. And they were on their own. The direct management, the direct exchange with colleagues were suddenly gone. Sure, you saw each other regularly on the screen. However, these jittery head to chest pictures, which did not match the sound, were not really the real thing.
We are just what we are: human beings. And as such we want direct interaction. We want to see the gestures, perceive the facial expressions, feel the emotions. This is deeply biological and corresponds to our being – it is a MUST for us. Therefore, all this speaks for the return to normality, the return to direct interaction with other people. And for this we can make maximum use of the human component for the future: We can build an ecosystem for our business. This means that, as explained below, we are not only thinking of ourselves, but of the entire value chain. And the crisis has also shown something else: We must add a digital component to our ecosystem, a digital ecosystem that strengthens and supports our human ecosystem, which is built on direct contact. And that brings us straight to our next point.
Leadership after the home office
But what kind of people are coming back to work now? Many were expected to have a high degree of independence and personal responsibility. Many have come to appreciate the high degree of work flexibility and time management made possible by the home office. Can these employees be led or managed as before? Do we believe in Ashby’s theorem (even more complex control systems) or in our humanity and human reason, which allows us to keep things simple?
And then it’s like the tango: If one of the partners (employees) takes new steps, I, as the boss, must also tread new paths.
Yes, leadership must change. It must become agile. This mainly for two reasons:
- Just as the economy will not be the same after Corona, the employees who come back to the office will not be the same. They have had drastic experiences. They have had to deal with themselves. They have gone through a development. Many now want to participate differently.
- The companies have to go through a development. As mentioned before: Waiting is not an option, because if everyone waits nothing moves. If we want to get our economy (yes, it is our economy) going again, we all have to move. We need to evolve as a company and as a community of cooperating companies, creating a flexible human and digital ecosystem.
This requires agility. You know what agility means? It means developing an organization in a proactive, and anticipatory way. In other words, to predict a development on its embryonal stage, be it societal, technological, social, etc. In order to make this development sustainably successful, your employees, you need agile leadership. In corporate practice, for managers it means: the control transforms into strategic foresight, integration and service. Why service? Because a manager cannot or need not predict everything alone.
The task of managers is therefore to support the operational staff, to challenge the employees to be the internal entrepreneur in the company, to develop the company further with the help of leadership, because in the end, it is the employees who perform and participate in the room of ideas. It is therefore imperative that employees take responsibility and help shape the company’s prospective development. Of course, this is a costly and time-consuming process for management. But the employees – Human Resources have regained the awareness that they are human beings – they can no longer be managed easily. You have to actively interact with these employees, the biggest asset in the company. It is worth it!
The agile culture
How do we get to this point? How will I involve the stuff in prospective company development? We must go through a development now, otherwise, we will suffer from the effects of COVID-19 for far too long. To let the employees participate, you need an agile culture. What is that now, please? Culture is what shapes us. An agile culture in a company actively deals with the environment, discusses trends internally, looks to the future and involves employees in the prospective development of the company. In the financial industry and political economy, this is known as leverage point analysis. In business practice, this means that control and policy instruments take a back seat. Transparency and an open culture of discussion characterize the organization because this is the only way to find the tipping points in time. For example, investors who do nowcasts and leverage point analysis did not lose any money in March this year.
A company with an agile culture doesn’t simply follow the competitors and reacts to what they do. Such a company has detached itself from the competition and acts with foresight, it follows the pulse of time and is open to new ideas. An agile culture is a prerequisite for agile behavior in general. Now, there is an impression that every company has to reinvent and change itself in the wake of the Covid crisis. This way of thinking and behavior should be used to move out of the Covid waiting room.
Out of the waiting room
if a company thinks agile in this crisis, it thinks, also, of the business partners along its value chain. It thinks of suppliers, of customers, of other influencing elements of this value chain. If you start talking to each other, you will understand challenges of the business partners that can be very different sometimes. And this can be the starting point for the common way out of rigidity, out of the corona waiting room. You, who have initiated this development, this teamwork, can position yourself as a reliable, forward-looking partner in your value chain. You are recognized as a driving force, as a condensation point for new developments. In the end, this initiative has an extraordinarily positive impact on your reputation. And it is priceless.
Together you can develop perspectives as a “community of destiny”. Because this is exactly what we currently lack: thinking in terms of ecosystems and developing perspectives. Once all partners involved know where the waiting room is, a great dynamic is created. The energy that has been lacking until now comes back.
Therefore: start talking to each other, listen, become agile and do justice to your employees.
