The secret of future-proof organizations

According to our definition, organizations that are fit for the future remain capable of proactively developing their business despite a VUCA environment. Such organizations, in particular, manage to unlock their employees’ creative potential by giving them more freedom to act and make decisions. Therefore, many organizations experiment with “self-autonomy” or self-organization. In this article, we would like to dispel some myths about self-organization and identify the key success factors for the implementation of more creative freedom.

Myth No. 1: Employees desire and are capable of working in a self-organized way

We all wish to have creative freedom, albeit to varying degrees. In our definition, self-organization exceeds creative freedom if a real transfer of power takes place instead of mere delegation. Delegated creative freedom can be withdrawn at any time or adapted to the situation; self-organization, however, is permanent.
Hierarchical relationships are not bad per se; they have advantages from the employee’s point of view. For example, disagreements, conflicts and unpleasant decisions can generally be delegated to the manager. On the other hand, in a completely self-organized team, individual team members have to make their own decisions, even the unpleasant ones. Not everyone is prepared to do so.
Usually, hierarchical relationships can be clearly communicated and remain constant over time. This fosters security and stability. When employees criticize instructions, this is not automatically a rejection of the instruction itself. It can just as well be a criticism of the content or the way something is communicated, while a clear order or mandate is still desired – consciously or unconsciously.
In summary, there is a wide range of collaboration models between the two poles of hierarchy and self-organization. In any case, employees desire authenticity. After many years spent in transformation projects, we experience that employees tend to have a pronounced “bullshit detector”. Nothing is worse than incongruence between what is said and what is actually conveyed through daily actions.

Tip for action: Do not delegate half-heartedly, but pay particular attention to the stringent implementation of newly established rules when changing patterns and expanding scope of action – e.g., as part of regular team retrospectives.

Myth No. 2: Self-organization is democracy-based and consensus-oriented

Self-organization does not mean that everyone must always agree with everything. However, if consensus-oriented models of collaboration are chosen, implementation often slows down and a feeling of inefficiency can quickly arise. In any case, it leads to a team always agreeing on the lowest common denominator. This clearly contradicts effectiveness and impact.
Therefore, (fully) self-organized teams need other forms of collaboration. Some teams borrow from Holacracy, Sociocracy 3.0 or similar methods, others cherry-pick or find their own way. What all these self-organized forms of organization have in common is that decision-making responsibilities, which normally lie with the manager, are distributed among the team members. In contrast to the hierarchical principle, however, this distribution is less strongly bundled and not so strongly located with the same people. For successful self-organization, therefore, a continuous, efficient and transparent adaptation of the distribution of power must be an inherent part of the system.

Tip for action: Make decisions by consent instead of consensus: As long as team members do not have any serious objections, decisions made by individual team members are accepted.

Myth No. 3: With self-organization, you can save yourself the middle management level

If saving is the answer, then the wrong question has been posed. In other words, the motivation for self-organization or for more creative freedom should not come from a cost-saving perspective. Instead, it is a building block toward creating an organization that is able to utilize the creative potential of each individual and their teams.
Successful implementation should benefit employees. The Millenials’ demands for more self-determination and cooperation at eye level can be met more easily. However, caution is required when it comes to implementation. Self-organization is a big step; a gradual and increasingly strong delegation of decision-making responsibility to team members can be a suitable intermediate step.

Tip for action: Conduct regular team retrospectives (e.g. twice a month) and strengthen self-reflection and critical thinking skills within the team.

Use of creative freedom requires more “inside the skin”

If the expansion of creative freedom is a desired solution, the question arises as to whether the employees are willing and able to take advantage of it. The AQAL model (see pic. 1), which is based on the integral theory of Ken Wilber, helps to answer this question. It states that all quadrants must be taken into account in order to obtain a complete picture of reality.

Graphical representation on axes of the All Quadrants / All Levels mode
Pic. 1

Accordingly, both organizations as well as individual employees have certain outwardly visible characteristics. “Outside the skin” means that we can demonstrate our skills and competencies and display a certain behavior. Likewise, every organization has an outwardly visible structure and processes. Hierarchical relationships can be successfully built on this external structure. However, when it comes to enabling more creative freedom, for its success it is all the more critical to include the inner dimension as well, i.e., to achieve an honest commitment “inside the skin” (see pic. 2).

Graphical representation on axes of the All Quadrants / All Levels model

The inner dimension is always important. It is true that organizational culture can be an incredible enabler in stable times as well as in VUCA times, but it can also ruin a lot of initiatives. When it comes to personal proactive action, commitment is needed above all at the individual level. This can neither be bought nor organized externally.

Impact on strategy and control

Let’s start by looking at the inner dimension at the collective level. Here lies the “what for?” question for the entire organization. This apparently simple purpose question needs an honest, serious answer, both for the organization as a whole, as well as for all organizational units within the company. This is a prerequisite for employees to merge their personal purpose, their world views, inner convictions, expectations and interests with the organization they are working for.
In real day-to-day business, however, sales, revenue and growth targets are all too often the true measures of success, regardless of the vision and purpose officially communicated. An authentically intended purpose does not mean that financial goals have no place. On the contrary: stability and successful financial performance of their company is in the employees’ interest also. However, it is a question of order and priorities. If the purpose is genuinely followed, purely monetary goals will come second.

Impact on managers and their attitude

Once the prerequisites have been created at the strategic level, managers need to design the appropriate framework conditions. The further an organization moves from the pole of hierarchy to the pole of self-organization, the more essential a coaching approach to leadership becomes. For managers, the importance of “knowledge” decreases and the importance of “ability” increases. They are no longer the ones who need to know everything and be “better” than the rest.
For many of us this is a contradiction to what we have learned in school and in our private lives. Moreover, there are entire fields of professions (think of auditing, for instance), where you are always expected to be right. Flipping the switch here and seeing ourselves increasingly as framework creators is a really big step. The aim here is a culture of learning, of open-mindedness, and of sincere orientation toward customers and people.
And yet, the ability to integrate and take into account the inner dimension and the personal purpose of the people involved is precisely what makes the big difference. To give an example, in our projects on strategy implementation with OKR (Objectives and Key Results), we experience that the focus is often on knowledge and external structures: What formats do I introduce? How do we formulate them correctly? How do we adapt organizational structures and processes well? Ultimately, however, sustainable success can only be achieved if we succeed in including the inner dimension accordingly. And here we all still have a lot to learn.