I am convinced that a system that revolutionized our economies 100 years ago can no longer provide sufficient answers to our questions of today's world. Nevertheless over 90% of our companies are still organized according to tayloristic assumptions. Did really nothing change and what could be an alternative approach? That`s what the following article is about.
Like many people, I started my professional career as an intern. Out of school, into business. My first encounter with companies and the way how they are organized. Full of zest for action and curiosity, I soon discovered: Wow, is that stiff! It is clearly regulated who is responsible for what. People accomplish their tasks. Enquiries that do not fall within the scope of one's own responsibility are strictly rejected. But if the boss comes into the office, we drop everything. A scenario that is still to be found in one office or another. But who actually thought this up and why?
Taylorism - how our business world was revolutionized at the beginning of the 20th century
In times before the industrial revolution: markets are local, competition is strong and products are highly individualised. Strictly speaking production does not yet exist, it is primarily the craftsmen who create added value in industrial manufacturing. The dynamics are high, but manageable. The industrial revolution then begins, markets are opening up, it is easier to evade the competition, markets are becoming slower and individualisation seems very expensive. It is Frederic Taylor who tries to find solutions for this new situation. He is the first one who looks at organizations and management from a scientific perspective - also known as Scientific Management - and in many ways he still shapes the way we organize work today.
Work can be controlled and structured The dynamics of value creation can be reduced by structuring work into standardised processes and procedures.
Thinking and acting can be separated Management "thinks", develops strategies, processes and makes specifications that only need to be implemented by the workers. As a result, even unskilled workers can be quickly deployed and productivity has been increased a hundredfold.
Workers are lazy They only do what is expected of them. To keep the work performance high, the worker must be controlled as much as possible. This is best achieved by giving the worker clear instructions on which steps follow each other and what has to be done. Revolutionising work by rationalising work processes.
This is the origin of the pyramid organisation structure of companies, which we still know very well today. Power and knowledge is centralized in the top, management defines strategies, and the workforce executes them. Employees are motivated by targets and bonuses. Goal is the highest possible productivity, achieved through planning, forecasting and control. The company, the organization as an efficient machine.
Our common perspective on work is still highly influenced by tayloristic thoughts. We at VIBRANT THINKING call this the "static perspective on organizations"
The organization as a controllable, plannable machine whose primary goal is to increase productivity. Changes only take place when an external disturbance occurs. People are considered lazy and must be motivated by goals and bonuses. Therefore, a corresponding hierarchical structure is required, in which power is distributed from top to bottom and the work of the employees can be controlled and monitored.
According to the Kienbaum study from 2017, even today about 90% of organizations are still structured as functional, divisional or matrix organizations based on basic tayloristic principles. Only 3% of organizations are agile.
14,317 persons interviewed, 19% 101-500 employees, 16% <500, 14% 1,001-5,000 employees
Somehow surprising, because a lot has actually changed since 1900 and Taylor's approaches.
Different concepts and theories for other forms of organization have been developed during the course of the 20th century. These look at the topic from different perspectives and dimensions: the organization as a structure with one main goal versus the organization in the field of tension between the interests of different groups (unitarianism vs. pluralism), the view on the structure of an organization in contrast to the orientation towards its processes (structure vs. process) and the more. But in the end, with all approaches and theories, two opposite underlying images of human beings can be identified. Douglas McGregor summarizes those in a simple model in 1960 as Theory X and Theory Y:
People are listless, do not like to work, try to avoid work and do not want to take responsibility
They must be motivated and guided with the help of rewards and punishments
The human being is externally-determined, need to be extrinsically motivated and acts out of fear or because of money
People are not creative
People are self-motivated, under the right conditions they like to work and are happy to take responsibility
People can lead himselves. In order to achieve meaningful goals, they are ready to impose strict self-discipline
People are self-determined and intrinsically motivated, they want to achieve their goals, they act for the benefit of the company
Every person is creative in his own way
While Taylor is a clear supporter of Theory X, in the following years many approaches can be found, which are much more oriented towards the human image of Theory Y and thus take on a new perspective on companies. Some of them will be briefly introduced in the following.
The human relations approach that emerged in the 1930s primarly recognises that human relations have an influence on productivity
It were two Harvard professors Mayo and Roethlisberger who, at the beginning of the 1930s, conducted studies on individual needs and group dynamics in the plants of the Western Electric Company in the USA. They found out what a great influence - contrary to the assumptions in Taylorism - human relationships have on productivity. While the improvement of social relationships with colleagues or superiors had a significant influence on the increase in productivity, this relation could not be verified for the improvement of physical working conditions such as working hours, remuneration, temperature or light. In comparison to Taylorimus, the worker was defined as a social being, but the direction and goal of increasing productivity as such was not questioned. Their studies were criticised, sometimes severely, and yet they laid the scientific foundation for the human relations approach and ultimately also for the subsequent discussions on topics such as individual needs, performance motivation, group norms or leadership style.
The concept of sociocracy, developed as early as the end of the 1940s, regards the human being as self-determined and intrinsically motivated - through the approach of shared leadership it brings thinking and acting closer together again
In his concept of sociocracy, the Dutch scientist Kees Boeke speaks of the circular principle, shared leadership and of making decisions based on the principle of consensus. What is meant by this? Decisions and responsibility are not taken by one person alone as we are used to in the pyramid structure, but are distributed over a circle with several people (management circle). Decision-makers are at the same time also executive forces, which means that decisions are made at the relevant point and thinking and acting are brought together more strongly again. Although different circles can be hierarchically superimposed on each other, the classic distribution of power with bundling towards the top is largely cancelled out by the principle of “double connectors”. “Double connectors" are representatives from a lower circle within an upper circle. This model would not work without the assumption that the individual acts for the benefit of the company and can work in a self-motivated manner. The model of sociocracy was further developed by Brian Robertson. In 2007 he summarizes his thoughts in his model called Holacracy, which is now used in some companies. You can find more about Holacracy here.
Niklas Luhmann – founder of systems theory - enables a completely new view of organizations: the human being who takes on a certain role but is never part of the organization
In the 1960s Niklas Luhmann entered the sociological arena. His two main works "Soziale Systeme" (Social Systems) 1984 and "Die Gesellschaft der Gesellschaft" (The Society of Society) 1997 provided a completely new view of companies. As the founder of systems theory, he developed an explanatory model for social systems in 28 years of development work. For him such systems can be a company, politics, law or science. In doing so, he assumes that they are not created by their units themselves - the people - but by the relation of the elements to each other, by the communication between people. Thus a system can also be developed from within itself, one step following logically after the other. He calls this: autopoiesis. A term invented by Luhmann himself. Humans are therefore never part of the organization itself, they only take on certain roles. This also means that individual employees are usually not the cause of conflicts, but underlying communication patterns that have formed over time. It is therefore important to find and resolve this cause in the communication pattern. An approach that can be found in many agile constructs.
Although there are many new approaches, some of which have been in existence for decades, the new way of thinking has not yet become widely accepted.
It's time to change that! The old way of thinking can no longer solve today's challenges of our complex world (Read more about the Why here). Therefore, we at VIBRANT THINKING want to provide a new and different perspective. It builds upon these ideas of constant dynamism and interaction. And we are hoping to develop them further together with you. We call this new perspective:
They dynamic perspective on organizations
From my point of view organizations cannot be rigid structures that function like a machine according to predetermined rules. Rather they must fit into the nature of human beings in order to function in the best possible way. Organizations as living organisms, which are in a constant process of trying, learning and further development in reaction to the outside.
Organizations are permanently in an evolutionary development process - there is no such thing as being done
From a dynamic perspective, an organization is constantly on the move. We understand it as a complex, adaptable entity. Not only is each individual constantly changing, but through the exchange between employees and with other actors outside the organisation, the organisation as a whole is ultimately permanently in development. Change is not ordered or initiated by the management, but is naturally a reaction to impulses from the environment. Because of this movement and development, we do no longer speak of organisations as finished constructs, but rather of organisational development. We see them as systems that are constantly changing.
The basis for all our actions is trust in employees and the belief in their ability to organise themselves
In dynamic organizations we assume that it is the need of each individual to contribute to the success of the company, to participate in making the company successful. If he or she does not, the purpose of the company does not reflect his or her own. Then he should change the company and look for one that fits better with his own goals.
Since we have selected employees in dynamic organisations who share the raison d'être of the company, we can be sure that the employees are motivated by themselves. We do not need to explain to them why they should come to the office every day, nor do we need to drive them with goals and bonuses. We can be confident that they will contribute with all their abilities aiming for the good of the company. Therefore trust does not have to be earned or proven.
We are also convinced that this employee is able to do his work independently. As a private person, he constantly finds solutions for new problems, develops, adapts. There is no doubt that he could not do the same in a professional context. For this he does not need a supervisor who tells him what to do and how to do it. This leader does not exist in the private sphere either and that usually works out wonderfully. One thing we usually need to do so is a network of supporters and helpers. Therefore, I believe in the role of the leader as a coach, trainer and sparring partner, who listens well, asks the right questions and tries to support the employee in his development in the best possible way based on his strengths (You can read more about strengths here).
The dynamic organization functions as a fluid network structure in which hierarchies are naturally formed
Alone we will not get very far in this dynamic, complex world. Impossible. I believe in teamwork, where we support each other, advise each other and make decisions. Hierarchies arise automatically. And yes, of course they do exist. Hierarchies form because someone has a lot of experience in a particular area, because he or she is particularly interested in a certain topic or is keen to get particularly involved. But not because he has been in the company for 20 years and has a certain position on his business card. Key people can also change in the same way if the area of interest shifts, priorities change or someone wants to use fewer resources in the professional context. What if we could take on management positions related to certain topics? For a specific project or topic, because that's where we simply have the most knowledge. But for another topic we are simply a team member since someone else knows more. How would it be if we could temporarily accept and also relinquish responsibility depending on what our own resources allow? If we don't have to fear that we have lost the chance of leadership if we rejected it once. If the changes in our private life would harmonize much better with our professional life and we wouldn't have to pretend desperately that we could manage everything equally well. I am absolutely sure that this would release energy that we are not yet familiar with.
Let us further develop these thoughts - VIBRANT THINKING - together, so that VIBRANT ORGANISATIONS may arise.
(This article was translated from German using AI)