Interview by Beate Baldow with Michael Bartz and Thomas Schmutzer in the print issue of Diplomatisches Magazin (Diplomatic Magazine) June 2014:
Project word, individualization of activities and resolution of organizational structures – the world of work changes fundamentally and creates new challenges for the industry and for companies of all sizes. In an interview with Diplomatisches Magazin the economic experts and authors Professor Michael Bartz und Thomas Schmutzer explain how these challenges can be faced and what opportunities lie ahead.
The title of your new book is called “New World of Work“. How do you define the new work environment? What role does the transformation of the business culture from a controlling to a trusting culture, which you describe in your book, play?
Michael Bartz: Our work worlds are currently changing on a fundamental level. Essential drivers for this change are the new information technologies, which facilitate communication and cooperation over distances in such and easy and cost-efficient manner like we’ve never seen before. Due to these technologies, working methods which are flexible in terms of time and space have expanded. “The trend in the direction of new, more flexible working methods can be observed in the economies of all continents,“ the Austrian foreign minister Sebastian Kurz stated recently. More and more people have the opportunity to flexibly work outside of traditional offices, such as through a Home Office, and can also independently manage their time. These facts are accompanied by many changes: the tasks and formations of company offices change in the face of more flexible work methods, leadership concepts have to be revisited, and there is a significant need for a cultural change within businesses, namely the change from a controlling culture to a culture of trust. An advancement of the methods for cooperation and leadership in businesses must be created. In order to achieve this, an enhancement of the methods for cooperation and leadership in businesses must be created. When the “technical-methodical“ framework conditions have been created, then the way is paved for a gradual process of change toward a trust oriented business culture. Overall the transformation toward New World of Work requires a time period of 3 to5 years, since various consecutive steps need to be followed.
In your book, Viktoria Frey, the fictitious managing director of an established industrial business, begins restructuring her business after a large client didn’t extend a contract. Why did you choose this format?
Thomas Schmutzer: We wanted to write a book which was easy and quick to read, and included characters and situations which readers could identify with. Therefore we decided to package the factual content in the form of a novel. The reader should experience the changes simultaneously with the book’s characters. The expert interviews with top managers, such as Brigitte Ederer, enhance the experiences and perspectives of leading experts in the fields of industry and economics, and are included in every section of the book. The various contributions from top managers highlight the importance of the topic “New World of Work,“ since these individuals are already actively dealing with the issues this topic raises.
What influence does the Generation Y (“Digital Natives“) have on the job market? In your opinion, what main trends are fundamentally changing the work culture of and in businesses?
Thomas Schmutzer: The Digital Natives enter the job market with completely different demands. This generation is self-confident, has clear ideas regarding career, and wants to be courted by future employers. Digital Natives strive, more so than the generations before them, for self-fulfilment and the creation of meaning. Performance is a term that is not exclusively used for work, since Digital Natives have a much more holistic perspective. They apply the term “performance“ throughout their whole lives – be it in a private or professional context – and also want to unite these two spaces. They are extremely willing to work, but don’t see the connection between performance and work and a culture of office attendance. As an example, this generation currently makes up 28 percent of the Austrian labor force. By 2018, however, they will have grown to constitute 50 percent of the labor force.
Regarding the developments which will change the work culture of and in businesses, we can identify five main trends:
- The office will no longer be the only place to work
- An increase in diverse styles of work – from Digital Natives up to Silverliners
- The dissolution of company boundaries towards clients and suppliers
- The dissolution of traditional organizational structures
- The gradual substitution of full-time employees through alternative forms of employment
Through the high flexibility and individualization of employees, established management and leadership principles are working less and less. What new leadership concepts and strategies can you recommend?
Michael Bartz: Managers in particular have to fundamentally change their ideology and carefully prepare for leadership positions in virtual work environments. An important key competence, without which the new world of work will be unable to function, is the ability to lead through objectives. 70 to 80 percent of managers still rely on leadership principles which are heavily based on behavioral control. This means that, in addition to work progress, employees are observed on how they behave in the office. In the new work worlds, in which virtual work is becoming more common, this leadership principle doesn’t work anymore. Here, a paradigm shift from managers is required: instead of control, a management system based on quantitatively measurable objectives needs to be implemented. In order for this to work, it is important to qualify the managers, establish supporting processes, and to familiarize employees and managers with necessary tools, such as performance contracts, one-to-ones and other review-meetings, employee evaluations on the basis of performance contracts, and evaluation of development. When this works, then the “leashes“ can gradually be lengthened and roles and functions can be made more flexible in terms of time and space. But this is only the beginning. Managers must develop a series of skills in these new work worlds, and have to continually grow. This requires soft skills, such as empathy, and communication new skills. These are skills which women tend to possess in a greater degree. As managers, they therefore have a clear advantage in these new worlds of work.
Why have business strategies become almost imperceptible on an employee level? How can this be remedied?
Michael Bartz: It is difficult for organisations to effectively transmit business strategies to employees, and to make the implementation success transparent. This is not possible with a 300-page strategy paper and complex project management systems. In order to achieve this effect, it is critical to translate a business strategy into a manageable number of quantifiable business objectives. And these goals must be clearly quantifiable. This can be achieved with the help of the so-called Balanced Scorecard Method. In the New World of Work Research Center at the IMC University of Applied Sciences, we utilize this method on New World of Work transformational projects, and scientifically accompany businesses over many years with a so-called Impact Measurement. For this purpose, we determine the expected benefits of the implementation of innovative work methods in businesses, such as for example the increase of employee satisfaction and the reduction of costs for office infrastructure. In the next step, the expectations are translated into quantitative targets, such as: the cost of office infrastructure should be reduced by 28 percent by 2016. The business objectives are then consolidated in a New World of Work Balanced Scorecard, and are supported by a policy plan, the so-called Transformation Map. Our independent research institute at the IMC University of Applied Sciences Krems conducts the measurement and evaluation of these so called key performance indicators in the transformation process. In this way, businesses can achieve an unbiased picture of achieved progresses on the path toward new, innovative work methods. The employees and managers will understand what policies work, and which areas still need to be improved. Through the clear connection between methods and measurable goals, progresses in the implementation of business strategies will become more transparent and comprehensible to employees. We are basically “putting strategy on wheels.“
One of the trends you describe is “consumerization,“ which means that employees wish to use their private terminal equipment for work. What are advantages and disadvantages? To what extend should businesses respond to their employees on this topic?
Thomas Schmutzer: This trend has, in a short amount of time, led to a changed work methods for employees and businesses. The New World of Communication and Collaboration 2014 study from HMP, the IMC University of Applied Sciences Krems and the Magazine Report state that the benefits of the co-called Bring Your Own Device policy are very significant for businesses. It is notable that an improvement of employee motivation (66.0 percent), heightened mobility (54.2 percent), and the positive influence on employer attractiveness (49.3 percent) have all been registered. Therefore, such a policy is actually a win-win situation. This topic is becoming increasingly important for employees, and it is useful for businesses. However, consumerization also has an effect on a business’s IT department. The increasing variety of terminal equipment, for example, makes support and operation more difficult. But the question really is: “What happens if I don’t engage in consumerization?“ Especially young, new employees are already asking about a business’ stance toward this trend in the interviewing stages. Employees increasingly want to decide how they can most efficiently work themselves. Therefore we suggest a proactive approach to the subject.
What do you define as “Unified Communication“? Why is this so important?
Thomas Schmutzer: Through a variety of channels, Unified Communication (UC) pursues the goal of making communication – which has lately become a veritable productivity inhibitor – efficient and manageable once again. The idea behind UC is to improve accessibility and therefore speed up business processes. UC describes the integration of communication channels into a uniform application environment. UC forms the bridge between various communication and information channels, with the goal of providing the user access to currently required applications (for business or for private use) through his terminal equipment with the most consistent user interface and the use of optimal, available transport routes. The measurable advantage lies in the increase of employee productivity and therefore business productivity, which occurs through efficient, targeted and controled communication, as well as in a direct optimization of costs.
To what extent does the future lie in “digital automatization?“ What is the meaning of this term? What is the meaning of the “Doodle Principle“ for production?
Michael Bartz: The digitalization of our work environments is steadily increasing. In the area of production, the work methods are changing as well. In this field, there is a particular emphasis on self-organization. The planning and coordination of shift allocations in the area of production is a notable example. In the old world of work, planners were responsible for shift allocations in the administration areas of a business. Employees in the area of production were divided in shifts “top down.“ In the production sector of the new generation, the responsibility for the coordination of shift allocations is increasingly shifted to the employees. Online tools, which many are familiar with in a private context, have proved to be valuable for this form of self-organization. One such tool is Doodle (www.doodle.com). With this tool, adequate appointments for a group can be quickly and easily chosen. Speaking from experience, the group dynamic and the group pressure automatically lead to a fair allocation of popular and unpopular shifts. Therefore, shift allocation practically becomes a self-adjusting system.