The noticeable shortage of talent is changing the economy from the bottom up. Only companies that succeed in satisfying the increasing demands of the younger generations while the availability of manpower is declining can still successfully implement their growth-oriented business plans. This is changing not only structures, technology and processes, but also in particular leadership behavior, culture and values.
Only companies that truly implement lean management can still operate successfully in this environment.
What is the best way to reduce administration to a minimum, so that as much of the work force as possible can be concentrated on creating value? Instead of control, bureaucracy and internal politics, the approach of facilitating productive, fulfilling and value-adding work is now the leitmotif of managers: Mechanistic planning rituals, over-regulated travel cost approvals and target agreement processes were replaced by dynamic self-directed agile work in networks.
At the beginning of the 21st century, various unpredictable crises such as al-Qaeda and IS wars, drought, pandemics, etc. taught us that the command and control leadership approach provided results and planning reliability in Henry Ford’s day, but not in complex and dynamic environments.
In the war against al-Qaeda, General Stanley McChrystal recognized that local self-regulation of the various expert teams was superior to central control by a central general staff. Empowerment of individual team members and trust between departments became the new leadership focus:
Teams are effective because they trust each other and they have a shared purpose. This is what we call shared consciousness and shared purpose.
Effectiveness is ensured by a high degree of internal transparency, collaborative coordination and customer orientation. Transparency and an awareness of the common task leads to “conscious leadership”, where the growth and empowerment of individuals and organizations enables superior results. Results for the benefit of employees and employers, which ultimately overcame the supposed antagonism between employer and employee.
In this transformation of commercial enterprises, some formerly very successful companies went bankrupt (including half of all German DAX companies), which did not convert their management structures to the modern management model fast enough.
Through their transformation, successful companies managed to combine the adaptability and adaptability of small teams with the power and resource strength of large companies. Logistics and IT companies in particular benefited from the replacement of the hierarchical organization model of the traditional cascading waterfall model (breaking down goals across departments) to an adaptable planning with iterative coordination processes during the year in cross-company steering boards.
In this phase of the Conscious Business, the real development of employees according to their personal passion, competence and objectives became decisive for employee retention and a strong employer brand. Assessment centers were replaced by development centers, the agreement of objectives for a real dialogue and the promotion of intrinsic motivation were the main drivers for team and company success.
Whether one exploits employees or achieves high customer satisfaction together with the employees was increasingly decisive for success or failure.
This became apparent in the drugstore sector, for example: The drugstore chain Schlecker, which treated its employees badly, went bankrupt and its owners went to prison. During the same period, the drugstore chain DM of humanistically-minded manager Götz Werner granted employees greater personal responsibility, who could determine the product range, duty rosters, salaries and supervisors at the store level. It rose to become the largest and most profitable drugstore chain in Europe.
The ideal competencies at the top management level were now the focus on innovation, purpose and cash control. Whether in an entrepreneurial personality, a management team or a management trio: the ability to foster individual potential, an inspiring culture of innovation, genuine alignment with relevant sustainable development goals for the benefit of society became just as important as the previously dominant focus on key financial figures.
Clearly – in times of scarce capital, the needs of shareholders were decisive. In a world with a shrinking population and serious climate and resource problems, the focus on the scarce resource of employees and social acceptance became vital for the survival of any organization.
While in the 20th century the procurement of stock market capital was the bottleneck for the entrepreneurial survival of traditional companies such as Bayer, Deutsche Bank and VW, in the 21st century social acceptance became increasingly important and Bayer was smashed after a drastic loss of value due to the environmental impact of its Monsanto pesticides, VW dealers went bankrupt due to the damage to the brand’s image after an exhaust gas fraud and Deutsche Bank disappeared in financial insignificance after many lawsuits about unethical profit maximization.
This new prioritization led to the enormous freedom of the working people: The average working week fell to 20 hours with a high degree of flexibility to use the home or Maldives office, and the rate of innovation increased dramatically.
In addition to an improved health care system, the new speed of innovation led, among other things, to fundamental innovations for transport: After endless traffic jams were created in the ever growing megacities such as Bangkok, Jakarta, Dubai, Rio, Moscow and the many Chinese megacities due to ever more traffic, it became inevitable to send mass transport into the third dimension in mobility instruments.
Since it was known from traditional road traffic that over 63 percent of accidents were due to human behaviour, modern air traffic suitable for the masses was developed with technically self-controlling quadrocopters, helicopters and other autonomous air taxis without drivers.
In order to promote acceptance of these autonomously flying means of transport, ground-based cars, buses and trains were first converted to driverless driving. The energy balance of the new means of transport was significantly more positive than that of conventional vehicles, as traffic jams, parking space searches and downtimes were drastically reduced.
Forced by the new reality to focus on social benefits, commercial enterprises have become a relevant driver not only of social progress, but also of equality, social participation of formerly poorer classes, education and the environment. In addition to balance sheets, reporting on the achievements for the Sustainable Development Goals became an audit-relevant reporting requirement on the capital market, as it became clear that only companies that seriously committed themselves to this issue would achieve long-term share increases. BlackRock, previously disreputable as a profit-maximising financial investor, became a green locust when its boss Larry Finck used BlackRock’s financial power to motivate the CEOs of public companies to do sustainable business.
This overcame mismanagement by optimising quarterly profits and, by combining traditional investment approaches with sustainable ESG investment objectives, generated above-average profitability – both from a financial and ethical perspective – and shaped a trend towards sustainable business.
This in turn led to a readjustment of the influence of business and politics, as global companies in particular became more relevant and effective in improving living conditions than some politicians and governments.