Transformation of project-oriented companies – Part 2: Drivers of change

With this blog series, we want to report on current developments in the field of corporate transformation and at the same time provide concrete tips for implementation. Every month we take up one aspect of the topic and present background information, potentials for improvement as well as solutions – from practice for practice.

Somehow you get the impression that the world has gone completely off the rails in recent years. For a long time it seemed that the time of the Cold War was over. Yet the tensions between the USA and Russia and also between the USA and China are increasing significantly. This naturally also has an impact on the economic situation in Germany. Climate change and the change of mindset towards economic activity in general and the automotive and energy industries in particular are also having an impact on companies and their managers. Brexit, the unclear economic trends and questions about the political situation in our country also cause uncertainty. How can we move forward?

How should the company orient itself? Which values are right, which ones need to be adjusted? These and many other questions plague companies today and are the basis for considerations to implement changes in the company. There are a variety of drivers for change. On the one hand, there are external influences that affect the organisation and require adjustments. On the other hand, internal factors also cause the change. For this reason, managers should regularly and systematically observe and analyse the environment of their company, to determine what is changing and what influences need to be taken into account when redesigning the company.

Changes in social values can have a significant impact on corporate action. The example of siemens, for instance, shows how a rather insignificant order can lead to heated discussions between management and environmental activists. Or how the “Friday for Future” movement of schoolchildren can lead to a discussion on the use of flights in Germany, which is later referred to as “flight shame”. But new political and legal requirements can also have a massive impact on entrepreneurial action. For example, new emission regulations for cars or legal requirements on minimum wages.

Furthermore, changes in the market or competitive environment as well as in technologies and business models have a significant impact on a company. Thus, Tesla is not only setting new standards for electromobility, but also with regard to battery technology, which is critical for its success. Recently, the stock market value of the still young company exceeded 1 trillion euros. This is unimaginable in view of the stagnating development of German automobile manufacturers. This is not only about courageous decisions by an entrepreneur, but also about a particularly flexible positioning of the entire company in order to be able to respond quickly to new trends.

Changes are also caused from within the company. For example, a new management, a reorientation of strategy or a “Merger & Acquisition (M&A)” can be a strong cause for changes in organizational structures, processes and cultures. The changes can also be caused by improvement measures, by lessons learned in projects or by the ideas brought forward by employees. In the past, changes in companies were mainly introduced “top down” and changes ” imposed”. Nowadays, there is a growing perception that changes should rather happen ” emergent”, i.e. from employees who are close to the business, have the appropriate detailed knowledge and can try things out before they are declared a ” strategy”. Nevertheless it is important to coordinate changes from both directions. It is true that the company leadership provides the strategic orientation. However, what exactly is implemented when, how and by whom within the strategic framework is better decided by the people and teams who are closer to what is happening.

In our opinion, an important driver of organizational change is also the “Generation Z” which is striving to enter the labour market. This generation is very self-confident and actively represents its own interests. These are primarily aimed at a meaningful involvement with challenging tasks in a manner that is as self-organized as possible with the support of experienced colleagues. The use of digital technologies for communication and the exchange of information is also very popular with this generation. This seems to be even more important than a company vehicle or a financial incentive. “Sabbaticals” are a welcome option for representatives of the Generation Z to take time out of their daily work routine for advanced training, more time for the children or a long journey. Therefore, companies need to think carefully about whether they offer such opportunities to be attractive to new recruits, and how they can plan for them in terms of workload.

Management should keep an eye on these and other internal and external influencing factors and take them into account when transforming the organisation.

 

Author: Reinhard Wagner, CEO of Tiba Managementberatung

Leave a Reply

Your email address will not be published. Required fields are marked *