The state of organizations 2023: Shifts
Image: The Global Goals (https://www.globalgoals.org/resources/)
In the uncertainty and complexity of the present, a transformative power has emerged that organizations can no longer ignore. The transformation of work since Corona, the rapidly growing importance of sustainability through the UN SDGs and European regulation, and the high speed of technology development create enormous momentum in which people, teams and organizations must grow if they are to keep pace with the shifts and seize the opportunities that emerge. In addition, attractive cultures have become a strategic factor in times of shortage of skilled workers and the great attrition. After all, the younger generations are opting for an environment in which they enjoy working. We regularly encounter these shifts in our work with our customers. So here are a few impressions we have gathered over the past few months.
> Measuring culture and knowing the status quo
There is a strong need to better understand the direction of cultural change and the measures that are effective, first, by analyzing the status of a culture. There are many methods in place that allow analyzing culture - including online-based metric surveys that can be used to display the strengths and weaknesses of a culture with relatively little effort. Yet it is much more important to derive the right development measures from this status quo. And this can only work in a dialog that includes diverse groups of the organization - from the management team to HR and internal initiatives such as culture clubs or culture catalysts networks that drive cultural change in addition to their professional roles. Again and again this dialog proves to be the only way to create a sustainable commitment to the consistent implementation of the measures. Especially at top management levels.
> Leadership goes Culture – Role Model for future Behavior
This brings us to the next aspect: cultural change and leadership. The two are inextricably linked. Because culture stands and falls with leadership. We have been observing for quite a while that the commitment of leaders to question and adapt their own leadership style has strong impact on cultural change. Development psychologists such as Jane Loevinger, Robert Kegan and Susanne Cook-Greuter have described what is required to support that kind of personal growth of leaders. Interestingly enough this brings us to sustainability: the Swedish non-profit organization Inner Development Goals (IDGs) has translated findings from psychology into development goals for leaders. The hypothesis of the IDGs movement: sustainability can be consistently implemented as a core value in organizations when leaders role model the required mindset.
> In uncertain times, Psychological Safety is key
Leadership development has direct impact at the team level. On the one hand, it is easy to measure the energy level of a team and the quality of its collaboration. On the other hand, a few one-on-one conversations are enough to identify the influence of leadership on energy and mindset. The most important, however, is the degree of Psychological Safety in teams, on which leaders have a decisive influence. It forms the foundation for people to contribute to problem solving and innovation with their own perspectives, show their vulnerability, speak openly about failure in order to learn from it or ask others for help. And only then does the team’s diversity unfold its power that is needed to cope with complexity. And it provides relief - safety is, after all, a basic human need. From our work with teams and leaders, we have learned that the degree of Psychological Safety can be increased without much effort. With a positive effect on the learning culture and the speed of development in teams. This is essential with regard to the next topic that companies are facing: Digitalization.
> Data Culture - what drives us in the future
The future is data-driven. We all see a lot of evidence for that. In some companies more, in others less. Where data culture once consisted of reporting numbers by using classical office programs, our future colleague AI will take a seat next to us and make own decisions. This increases the complexity in organizations. Especially since the ways of dealing with data is developing in very different ways. While for some it is already daily bread and has led to more agile forms of collaboration, for others it is still a source of permanent overload. The next tool update is enough to paralyze work processes and frustrate employees. The answer to this can only be a well-developed data culture in which people from both groups learn together quickly, support each other and plan for the next technological quantum leaps with a longterm perspective. It is hard to imagine that a company will be competitive without a strong data culture.
> Sustainability is also data-driven
Interestingly, sustainability takes this a step further. The EU Taxonomy - i.e., the data-based balance sheet of the organizations’ environmental footprint - represents a fundamental value shift in companies. Where quarterly results and margins used to be the key drivers, algorithms are now being feverishly developed to ensure reliable bottom lines e.g. for the greenhouse gas footprint. From now on, cultural development must therefore always include the development of a strong data culture in which teams define a common approach to deal with the complexity of data and the high speed of AI development. It is no coincidence that tech companies were the first to recruit positions like "Data Culture Manager*in" or "Head of Data Culture".
> People make culture - promoting a sound people culture
Of course, all this raises the question: What does this do to the people in companies? Post-Corona studies show that the feeling of belonging and cohesion are partially lost through home office and remote work - and with it the identification with the employer. What is needed here, however, is a specific analysis of why employees prefer to work from home. For some, it is certainly a way of life – e.g. for programmers who can code for companies like Spotify from anywhere on the planet. But we've also seen cases where people flee from their manager, the team or the entire company. Or are obliged to move back to the office for control reasons. Either way, it is one of the most important leadership tasks to keep asking how the individuals in the team are doing and - sometimes with external help - to keep the team spirit high. And which forms of collaboration are ultimately the most effective for the team and the organization.
> Change competence urgently needed
In general, there is currently a huge demand for a skill that we as consultants have assumed to be sufficiently available by now: change competence. Leading change is both a leadership task and the ability of those affected by change to mindfully take care of themselves in order not to be overwhelmed or exhausted. Only then teams are able to play an active part in change. From our perspective many companies need external support for their change processes - for example, by refreshing change skills, supporting specific change concerns (e.g., how do I communicate the change to the workforce?), or by offering guided reflections on how to manage the change and build resilience. With regard to the latter, we have had very good experiences with the application of methods and concepts from neuroscience, which allows easier access to those who are affected by change.
