THE TRIUMPH OF SOFT COMPANIES
“Culture eats strategy for breakfast” — this famous quote from Peter Drucker leaves no doubt that the culture of a company is a powerful factor that positively or negatively influences the strategy process and thus, also the entrepreneurial success of an organisation.
It is most importantly the soft factors such as communication, healthy relationships and appreciation that result in the motivation and commitment of the employees and thus contribute to a successful corporate culture. In recent decades, these have often not been taken seriously and were reduced to nothing more than mere numbers, data and facts. As a result, many nicely formulated models were consumed for breakfast in case of doubt about efficiency and profit.
But that is gradually changing.
The New Formula for Success: Soft Change
The economy and society are currently going through a profound change that means much more than just another change management project. Entire industries have to reinvent themselves completely. The existence of many of them are threatened while others will barely continue to exist in their usual form. In the midst of hectic change dynamics, it is often overlooked that change always comes in two essential aspects: an outer and an inner one.
On one hand, the use of new technologies and the development of new products require completely new structures, procedures and decision-making processes. At the same time, every external change needs an internal change. This is reflected in new forms of coworking and communication, in new leadership images and more self-determination and empowerment for employees. In the 21st century, it will be the soft factors of corporate culture that will set the course for success.
EXTERNAL AND INTERNAL CHANGE
New Work: The Mindshift is Already Here
New Work, a catchphrase that literally means new ways of working, is a crucial part of this shift in consciousness. Behind connectivity, mobility, health, neo-ecology and others, this is one of the most powerful trends of the 21st century in terms of corporate culture design.
New Work does not mean a 30-hour week of table soccer and employee amusement in a chill-out lounge. The changeover to New Work is much deeper, more complex and more meaningful. It’s about a completely new mindset, a fundamental reorientation of cultural values and this starts from the inside out.
NEW WORK: NEW FORMS OF WORK
Know-why Instead of Know-how — When Work Suddenly Becomes Fulfilling
Digitalization and automation do not only change processes and structures in companies, they also question man-work relationships. Working to earn money and job security will be as important as the company car or bonus payment. Many jobs, including qualified nature, will not exist in the future. Machines and AI perform routine activities at a much faster, cheaper and more accurate rate than humans.
Above all, these developments will throw those employees out of the comfort zone, motivated primarily by security and urge to earn enough money. For a very substantial number of employees, questions will arise in future to which companies no longer have to provide answers through know-how, but through know-why: If I become redundant to work, what then do I need the work for? This is where the soft factors of corporate culture come into play.
The paradigm of a performance-based and efficiency/profit oriented organisation is failing. The future applies to the creative economy, and thus to the people who, with their enthusiasm and creativity, cannot be replaced by any machine in the world, provided that the framework conditions allow enough freedom, co-determination and potential development.
New Organisational Principle: Enthusiasm Creates Suction
New forms of work require a new quality of leadership in two ways. Firstly, leadership must act as a lighthouse in times of change and uncertainty i.e., emphasise orientation, clarity and purpose. Secondly, leadership must also be able to let go and confide in employees that they are self-determined and responsible enough to generate solutions for whatever challenges they may face.
CREATIVITY: AN INTEGRAL PART OF A NEW CULTURE
A suction effect occurs when employees feel accepted as people, can use their potential in a creative process and can collectively develop useful products in a team on a basis of equality. This creates a very special “spirit” that is also noticeable on the outside. Companies are not islands, they are living systems that are in constant communication with their environment. Employees who are enthusiastic about their company, the product and the culture, will propagate their convictions and automatically attract new customers and employees.
The Task of Successful Companies: Rethinking the Economy
In the future, rethinking and relearning the economy and entrepreneurship will be a priceless key factor. When the true value of a business is no longer determined solely by its stock price and market capitalisation, but by general corporate goals, humanity, global responsibility, and products with social-environmental added value, then everyone benefits.
Purpose is one of the strongest motivational sources of all. Of course, people and companies should and will continue to earn money in the future so as to secure their livelihood. Ultimately, however, it is going to be about trying out new ideas and thereby venturing more into wholeness, more liveliness, more creativity and more participation.
THE GOAL — REDESIGNING WORK
To come back to Peter Drucker, culture does not necessarily have to eat strategy up for breakfast, both are complementary to each other. They are two sides of the same coin. The conscious design of internal corporate culture successfully brings the strategy to the outside. We at Lumen Partners are more than willing to support you and help you through. Why don’t you shoot us a message!
Written by Sabine Zimmermann for Lumen Partners
