An appeal for more openness and agility
Nothing stays the way it is. That’s the impression more and more established companies are getting, given trends such as digital transformation, globalization, and climate change. In a working world of increasing complexity, these trends are seen as an opportunity, but at the same time, they are also considered a threat.
One thing most people agree on is that something has to change. But that will only be possible with the support of lateral thinkers and a corporate culture that actually allows people to think laterally. The Steinbeiser Alexandra Rudl (bwcon) has been putting some thought into the best setups for this to happen. One thing most people agree on is that something has to change about the way products are developed – in shorter and shorter development cycles, focusing from the outset on customer requirements. But this also affects the actual culture of a company, moving it away from fixed hierarchies under management that “should know everything.” As knowing everything is practically impossible anyway in complex, modern times, management is increasingly becoming everyone’s responsibility. Ideally, every employee should be able to shape the fortunes of a company and actively contribute to safeguarding competitiveness by adding their own ideas.
Quick development cycles and the aforementioned aspects relating to agile corporate culture are only attainable, however, if we allow people to think laterally. This is not about quickly recruiting lateral thinkers, who are often now referred to as intrapreneurs, or relying on them to come up with some or other new, groundbreaking business model. Lateral thinkers can only unleash their creative potential if they are given enough leeway within a company culture, and the culture has to allow individuals to make a contribution. And, above all, should something go awry, this should have no negative consequences for them. This is because when we think laterally and something new comes out of this, there is no way of knowing if the result will be something successful. What this means is that the context within which we operate is one of uncertainty. Coping with this uncertainty and allowing it to exist is a challenge for any company, especially if it has done everything it can until now to keep everything in place and “safe and sound.”
But what is the best way to engender such a culture? Well, the first difficulty has already been dealt with. Many companies are now becoming aware of the fact that they need to give people enough space and break down rigid company hierarchies. It’s here that Alexandra Rudl is reminded of something somebody at an established manufacturer from Baden- Wuerttemberg once said to her, which went something along the lines of it “feeling like his employer had been playing it safe for decades.” The company had a tremendous infrastructure, and management had been so convinced it was right for so long that nobody could possibly compete with it – not quickly. But now we have startups like Airbnb and Uber demonstrating how it’s possible to completely conquer a market in next to no time – without a proper infrastructure. Knowing this has made people realize that you have to do something yourself before it’s too late.
This pressure to do something is a matter Rudl and her team take seriously in their work for the “Baden-Wurttemberg: Connected” business network. Not only is it witnessing strong interest in collaborating with startups, there is also growing demand for innovation workshops, offering a chance to learn the methods used at startups and how agile software development works. These methods can be seen as a kind of guide to lateral thinking, since they radically question behavioral patterns and structures that were considered “correct” until now.
For instance, design thinking challenges people to work in teams that are as heterogeneous as possible, to let any idea go through at first, and to think “radically.” Just one example of the sort of thing you will hear when people are applying design thinking is that the term “yes, but” is actually a good way to stifle an idea – instead, you should answer “Yes, and…” And then there is effectuation, which involves encouraging people not to do any planning in the early phases of innovation. According to effectuation logic, which stems from entrepreneurship research, when things are a bit hazy – for example when developing a disruptive innovation – we’re wasting our time with planning. After all, it’s not as if one can look backwards and search for the kind of reliable data people need to write a proper business plan. Without data, it’s impossible to make any statements about the profitability of a concept in the early stages. As a result, with effectuation it is recommended that you simply get on with things in small steps, based on whatever is available at the time. The new project can be pulled together and made more tangible with business partners as you go along, instead of planning everything right from the beginning.
But what about management? Are managers just going to set off on a journey without knowing where they are headed or whether it will be worth it? That is not the sort of idea managers at established companies have readily signed on to in the past, so again, a certain ability to think laterally is required. In terms of methodological approaches that are required to do this, there is Management 3.0, a technique lifted from agile software development that makes management the task of everyone. Similar to effectuation, the focus does not lie in planning or predictability; instead, the idea is to continuously improve the company by enhancing working conditions, productivity, and employee satisfaction.
In the increasingly complex world of business, not just thinking laterally, but also making hierarchies more adaptable, allowing people to fail, and accepting uncertainty are all key ingredients if a company wants to remain competitive in the long term. Despite this, given all the buzzwords now creeping into business from the world of startups, established companies should not forget where their strengths lie and they should ensure that their own drive to bring about change remains a pivotal part of their strategy. The reason for this is that an established company isn’t a startup – and it can’t go back to being one, either. There are simply too many people at big companies, routine processes, know-how that has been accumulated over years, and the resources that go hand in hand with this. What’s more important is to find a way to introduce more agile processes and openness as a fundamental part of the corporate culture – in ways that dovetail with existing company values and procedures, and in ways that are also inspired by startups and the methods they apply.
Alexandra Rudl is director of the Innovation Academy at bwcon GmbH. She is a certified Effectuation Coach and has undergone training in Management 3.0. Rudl and her team provide support to a broad variety of organizations with transformation processes and employee training. As an external innovation expert for the European Commission, she also evaluates research applications and business plans from the whole of Europe.