Out with the old, in with the new (work)
Each year in June, ESMT Berlin invites experts from business, government, academia, and civil society to share their perspectives and experiences as it relates to the hottest topics of the modern business world. This ESMT Annual Forum draws more than 300 guests and is an event highlight of the Berlin campus.
Because of the coronavirus crisis, the Berlin campus was temporarily shuttered and the annual forum had to be canceled. Nevertheless, we reached out to our speakers, inviting them to approach the forum’s theme – “The New Work Illusion?” – through the lens of the pandemic.
When I first heard the “The New Work Illusion?” theme my initial reaction was: That’s what it still is for most employees in Germany and around the globe – an illusion. Terms like “remote work”, “flat hierarchies”, “work-life balance”, “purposeful work”, “holacracy”, or “the leader as a servant” are still unheard of in a lot of long-established companies. And then there is a second group of companies – often startups – that use those terms to push their own employer branding initiatives. But the vast majority of them don’t live up to their promises or even understand what those terms mean. They are still promoting open offices and ping pong tables as benefits and essential part of a great New Work environment, which is simply wrong and counterproductive. Most of the managers still rely on hierarchy or information asymmetries to justify their role as a leader and only a fraction of them apply new leadership models, like Direction, Alignment and Commitment (DAC). And, if the working hours of most employees are indicative, flexible working hours are far from being mainstream.
I believe that an essential shift will happen as managers and shareholders become aware that companies following new paradigms outperform old-fashioned work environments and put them out of business. The more volatile, uncertain, complex and ambiguous (VUCA) business environments for participants in the markets become – and they are increasingly doing so – the more important it is to recruit the best talent, to optimize decision-making processes, and to build work environments that allow efficient, collaborative work.
Under the pandemic, the VUCA world became real. Suddenly, all companies that had remote work systems, processes, and strategies in place had a huge advantage. I heard of a company that ordered 30, 000 laptops when the coronavirus shutdown was announced. Now two weeks later, employee access to email was more or less possible from home, but laptops haven’t yet arrived. It is hard to fathom the amount of money they burnt by having employees – that could easily work remotely – sitting around at home, idling, because they couldn’t work productively. I am absolutely sure that stories like these will lead to a lot of initiatives to be undertaken in companies that neglected the topic until now.
But there is another, much more important aspect to this topic than a failure to deploy the necessary technologies to make remote work possible: company culture. A lot of companies had the technology in place, but they only rarely used the possibilities because they feared that anarchy would reign if they didn’t have their employees come in for work. But, alas, the world didn’t end and most people just tried to do their jobs. In most cases, this was not very efficient at the beginning. But this was to be expected where the necessary cultural foundation was lacking and offline processes were simply brought online. This is like switching from walking to riding a bike, but not using pedals.
To make efficient use of the new possibilities, we must make cultural change happen and really implement New Work paradigms. Employees who understand the thinking behind company strategies believe in their goals and perceive their work as purposeful will perform better in their home offices, because they are not dependent on tight control and are motivated – nay, empowered – to make things work.
The biggest challenge to this, and what many organizations face, is that most so-called leaders are not really leaders – they are managers. And a lot of managers don’t become leaders because they aren’t willing to change the status quo that favors them. To become a leader, you can’t rely on hierarchy or your privileged access to information to justify your authority any more. Instead, you have to relinquish the illusion of control and to build strong relationships based on trust. This is not for everyone.
Nevertheless, we will need more leaders in positions throughout our companies to deal with increasingly complex and fast-paced changes in technology and our socio-economic environments. Tackling these challenges will only be successful in environments where information is shared transparently, strategies and goals are jointly developed, and decisions can be taken by empowered, decentralized experts that have the necessary knowledge to make the best choice – fast.
The leader’s role will thus be to attract and hire the best talent, to instill a sense of purpose within the team for pursuing common and challenging goals, to jointly develop strategies for achieving these goals, and then to remove all the roadblocks in their way. Piece of cake? No. Every manager and every leader reading this knows how hard it is to live up to these demands. But there is no other way to reconcile the challenges of our VUCA world with being successful economically as an organization in the future.