The new role of organizations in 21st century

The world of work is in transition. Self-organisation, project work and start-ups are just a few keywords for the change that is currently taking place in our society. There is a lot of talk about “new work”, “agile projects” and “self-organized work”, but nobody asks the question as to why organizations are still needed.

Traditionally, organizations (mostly in the form of a company) offer a workplace and work. The employees expect a certain amount of job security and a regular income with which they can earn a living. In return, they subordinate themselves to the hierarchical order of their organization and follow instructions from their superiors.

However, fewer and fewer employees want to follow instructions from superiors who are simply higher up in the hierarchy. Employees are also looking for variation, opportunities for self-fulfilment and personal development, which are often not offered in traditional organizations. The “War for Talents” indicates that with an increasingly scarce number of qualified personnel, talents can choose the context in which they want to work. This means that only organizations that are attractive to the next generation can grow.

My sons, for example, clearly prefer a start-up to a traditional company because a start-up simply offers more freedom of manoeuvre, more variation, with little hierarchy, and the practical work in projects makes it easier for them to become individually involved and grow personally. Does this now mean that organisations must reinvent themselves as start-ups? Certainly not. But organizations must increasingly face the demands of (future) employees. This means that organizations will be the breeding ground for talented employees to work independently. They must allow more self-organization and self-determination. Work is increasingly taking place in form of temporary projects, with changing working conditions, in which internal and external experts co-creatively work on a project.

In future, organisations will have to offer space for creative development and experimentation on the one hand, but also create a balance between creative work and necessary routine in production or service processes on the other hand. Such organisations will attract people who provide room for development and are a breeding ground for new ideas. Of course, this means a high degree of adaptability in strategy, structure, processes and culture. Organisations that define themselves through hierarchies, subordination and dependent employment, i.e. that see people only to maximise profits, will find it difficult to attract talent.

Is it not possible without organizations? Everyone hires himself out as a “freelancer” and organizes projects with colleagues from his own network? Surely this will be possible in one situation or another. However, there is a danger that people will become increasingly lonely, that not enough talent will be found to carry out the project, or that the critical mass for realizing complex and costly projects will not be reached. Organizations offer a long-term sustainable framework for work that is predictable for employees and customers at the same time. Therefore, organizations will remain necessary in the future to better manage economic activities together.

Author: Reinhard Wagner, CEO of Tiba Managementberatung


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