What is contemporary organizational behavior
Company development: definition, tasks, procedure
I recently had the opportunity with Dr. Barbara Heitger to work on the definition, tasks and procedures of corporate development. In this post I would like to pass on some key ideas from the workshop that still keep me very busy.
What is corporate development?
Every manager is required to make decisions in day-to-day operations. According to Heitger, these are first-order decision parameters. When it comes to developing the company further, the decision parameters of the 2nd order have to be tweaked. Strategy, organization, behavior of employees and management are those variables that have a decisive influence on corporate development. One could also speak of corporate development tasks.
The decision parameters mentioned cannot be viewed independently of one another. Anyone who twists the "organization" screw will sooner or later get a strategy and / or behavioral issue on the table. Dear manager, if you change the organization, we also want to know where things are going in the future. The decision parameters of the 2nd order are therefore interdependent or dependent on one another.
How has corporate development worked so far?
In order to turn the mentioned screws on strategy, organization, behavior of employees and management, countless instruments have been developed over the years to develop the company from the here and now into a desired future. The company would develop either way. The desire to give the whole thing a desired direction is at least very understandable.
- strategy: Positioning, mission statement, vision, mission, values, strategic initiatives, etc.
- organization: Structures, processes, systems, IT systems, organizational design, etc.
- Behavior of employees: Personnel development, skill management, etc.
- guide: Leadership development, communication, etc.
What you can see at first glance, with the hard facts strategy and organization, the adjusting screws are much clearer and better known. When it comes to the soft facts behavior of employees and management, it suddenly becomes very vague.
What you can see at second glance, innovation is almost always equated with product innovation. However, innovation is just as important in terms of strategy, organization, people and leadership. This is probably even the basis for product innovation.
How is the corporate environment changing?
Even if I am very critical of buzzwords like “Industry 4.0”, the megatrend of digitization and connectivity cannot be discussed away. Deloitte sums up the effects for the individual industries very well with the following illustration:
Depending on the industry, it is only a matter of time before the effects of the megatrend digitization and connectivity become more or less noticeable. Retail can tell a thing or two about it - Amazon. Media - Netflix. Travel - Airbnb. Banks - N26. As a result, the business model of many companies will not change in small, but in large steps. If it hasn't already happened.
How does corporate development work today?
While a strategy with a time horizon of 5 years was actually something completely normal, today one could speak more of a vision. Planning 5 years into the future seems almost presumptuous instead of being shaped by the desired foresight. In order to cope with these changes, however, the classic corporate development must also change. In this case, it is worth taking a look at the constantly growing agility toolbox. What does corporate development look like when we look at you through agile glasses?
- strategy: Business model canvas, effectuation, transient strategies, strategic experiments, design thinking, EKS, etc.
- organization: SCRUM, SAFE, Holacracy, KANBAN, Lean Startup, etc.
- Behavior of employees: Commitment, personal responsibility, etc.
- guide: Leadership development, etc.
The instruments mentioned are designed for an environment that is constantly changing. The guiding principle at SCRUM is inspect and adapt. Effectuation counts on the affordable loss instead of the expected return. The business model canvas provides a quick overview of your own business model and thus a common map in a short time. Lean Startup works according to the motto build-measure-learn. Corporate development is therefore becoming a constant task for managers in a rapidly changing environment.
Which is also shown here again. There are countless agile tools and tools for adjusting strategy and organization. The behavior of employees and management still looks poor. My thesis on this: Most agile organizational approaches require a certain image of people, a certain leadership style and a certain employee behavior. Unfortunately this is not made transparent. It is better to be surprised in retrospect that the implementation did not work.
After a good 10 years of boom in almost all companies, there is high operational pressure. This tempts managers in particular to stay in the here and now. Processing the day-to-day business as efficiently as possible. After all, there is little point in looking into the future. Heitger cites the lemon squeezer as a symbolic image and speaks of the exploit mode.
Against this background, how can I, as a manager, prepare myself for the future? The answer is simple, but also difficult to implement. It takes less “exploit” and more “explore”. This means time-spaces for exploring the future. Only those who combine both modes can take care of the necessary innovation in all dimensions of corporate development (ambidextrous leadership).
Excursus: corporate development vs organizational development
How does corporate development differ from organizational development? According to Häfele, organizational development is defined as:
(..) a process of change in an organization and the people working in it, which is based on certain values and principles.
In this sense, organizational development describes a value-oriented attitude for the design of change processes in organizations (to the video development phases of an organization). Organizational development is therefore a possible variant of how corporate development can take place. Organizational development relies on changes from within with the aim of integrating those affected as well as possible.
In this context, Heitger speaks of normative organizational development because the approach is shaped by an image of man. This is neither good nor bad, but in this way the concept eludes empirical evidence of its effectiveness. This becomes particularly clear when looking at the seven ideal-typical phases of an organizational development process:
- Orientation phase: After the initial meeting (s), it is a matter of making clear agreements on the initial situation, goals and procedure, possibly as part of an orientation event for management. When the framework conditions have been clarified and the commitment of the management has been obtained, the OU process is made “public”.
- Clarifying the situation and modeling the future: Develop a common understanding of the current situation (self-diagnosis) and work out images of the future. On this basis, the first change goals can be formulated.
- Goal setting: From this, change goals are concretized, prioritized and selected by the management. The control structure for processing the selected change goals is clarified.
- Install the control structure: An internal project manager or an internal development group is installed to set up and coordinate the projects as part of the OE process.
- Informing the entire system: Inform as many members of the organization as possible about ongoing projects and the next steps in the process and obtain feedback (sounding board).
- Editing of the selected goals in sub-projects: Some change goals can be processed directly in the line, some need a separate project organization.
- Securing the OE process: (Interim) control and reflection of the overall process. Agreement on further measures to keep the process alive (e.g. annual retreat).
Excursus: corporate development vs agility
The transfer of agile methods to corporate development exudes a special charm. Corporate development and agility do not have to be opposites, but can complement each other well. In particular, by linking design thinking and SCRUM, I see great potential to accelerate targeted change processes in companies.
By using Design Thinking, an image of the ideal company in the future should first emerge. One could also speak of a corporate vision from the customer's point of view. This corporate vision is then implemented step by step using SCRUM. Here is the change process based on Design Thinking around SCRUM, in order to develop a company from IS to TARGET:
- Problem definition: In order to create a clear framework for agile organizational development, the formulation of a suitable design challenge is necessary.
- Need finding: In order to better understand our customers, qualitative interviews are now being carried out with customers, with a focus on users, needs and insights. Due to the intensive preoccupation with the needs of the customer, the focus shifts from the inside to the outside.
- synthesis: In order to bring the knowledge gained to the point, "How might we-Questions" are now formulated. One could also speak of a metaphor for the knowledge gained or of problem hypotheses.
- Ideation: With the help of different creativity techniques, ideas (= solution hypotheses) to answer the prioritized HMW questions (= problem hypotheses) are sought. Every idea found could represent a small step on the way to the ideal company from the customer's point of view.
- Prototyping: In order to be able to try out the most promising ideas directly, prototypes are built. In the case of a corporate vision, the Business Model Canvas, for example, is very suitable.
- Testing: Before prototypes are developed into final products, services or even companies, they need to be tested together with the customer. Which means nothing else, how to get feedback on the current state of affairs.
- Implementation via SCRUM: When the “best” corporate vision has emerged on the basis of customer feedback, it must be implemented efficiently. SCRUM is ideal for this.
Excursus: corporate development vs system theory
The 2nd order decision parameters defined by Heitger can probably be traced back to the sociologist Niklas Luhmann. Luhmann introduced three decision premises into the scientific discussion. Firstly, decision-making programs (= strategy) are used to determine which actions in organizations are to be regarded as right or wrong. Second, communication channels (= organization), this defines how communication takes place in the organization. Third staff (= behavior), here it is determined which people can fill which positions.
As already mentioned, the decision parameters cannot be viewed independently of one another. Muster provides a very nice picture, which she calls the management console. The decision parameters each correspond to a controller on an imaginary mixer. Leadership can be thought of as a power amplifier that brings all signals coming from the mixer to the same level.
If the controls are set higher, the power amplifier guidance can only have a small effect on signals. If the controls are set lower, the power amplifier management must intervene all the more in order to negotiate and decide the conflicting goals at the operational level. The picture and the connections connected with it cannot be proven. Still a nice metaphor.
On the one hand, corporate development works through integrated work on strategy, organization and people. On the other hand, through targeted investments in management in order to discover new opportunities and implement innovations in the explore mode. Agile methods can provide valuable support here.
Dr. Patrick Fritz
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Category: Change, leadership, organization, strategy Keywords: agile corporate development, disruptive corporate development, strategic corporate development, corporate development, corporate development tasks, corporate development definition
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