Competitive advantages through organisational change

Competitive advantages through

organisational change

Foreword / 04

Dr Jan Kleibrink

1. Introduction / 06

2. Organisational change to increase resilience and innovative capacity / 08

2.1 A turbulent market environment and digital transformation place new demands on organisations / 09

2.2 From Tayloristic to holistic organisation / 11

2.3 How employees characterise the organisation of their working environment / 13

2.4 Factors that drive organisational change / 16

2.5 Advantages of decentralised organisation in the use of knowledge / 18

Interview: Professor Dr Hanns-Christian Mahler / Felicia Werk / 24

2.6 Merits of authority in rapid decision-making / 31

Interview: Bastian Wilhelms / 32

2.7 Internal bureaucracy paralyses decision-making processes / 35

Interview: Carola Aldag / 38

3. Organisational change to increase workplace attractiveness and employee motivation / 40

3.1 Demographic change and skills shortages are shifting the situation on the labour market / 41

3.2 What is important for employees when choosing a job / 42

Interview: Mirja Bastian / 44

3.3 What matters for job satisfaction / 47

3.4 Employee motivation becomes a key factor for corporate success / 50

Interview: Dr Judith Muster / 53

4. Challenges in organisational change / 56

4.1 Between willingness to change and transformation fatigue / 57

4.2 Employees must be empowered for self-organisation and decentralised coordination / 60

Interview: Dr Konstanze Schlegelberger / 64

4.3 Organisational obstacles must be overcome / 66

4.4 Social institutions must be taken into account / 67

Interview: Professor Dr Antoinette Weibel / 68

5. Conclusion and outlook / 72

Interview: Janosch N. Stolle / 74

6. Notes and bibliography / 76

/ 82

Foreword

DR JAN KLEIBRINK

Handelsblatt Research Institute, Managing Director

A company's success depends on many different factors. Product, business model, production inputs, supply chains or the regulatory environment receive a lot of attention in the public perception of companies. The organisation of work is much less focused on, but no less important. What do decision-making procedures look like? What powers do individual employees have, how much bureaucracy or hierarchy must be adhered to? These structures have been established and entrenched in many companies over years or decades. They are hardly ever challenged or changed.

Against this backdrop, the transformation process initiated by the German DAX 40 company Bayer in 2023 is attracting a great deal of attention. This is because Bayer is currently taking on a pioneering role for the German economy in terms of reducing bureaucracy and hierarchies and strengthening the personal responsibility of teams. To date, no major industrial company in Germany has embarked on such an extensive organisational change as Bayer is currently undertaking under the heading of ‘Dynamic Shared Ownership’, or DSO for short. The relevant business cases discussed in this study come either from abroad, from SMEs and/or from the service sector. It is therefore also highly relevant from an academic perspective to follow how the reorganisation of the Leverkusen Group ultimately succeeds.

As part of its own transformation process, Bayer commissioned the Handelsblatt Research Institute to analyse the success and risk factors of such projects using scientific methods. The present study is an independent economic analysis of organisational change in established companies. It is based on the latest findings of scientific research, an international survey of employees and in-depth interviews with experts. However, it is expressly not an analysis of the internal transformation currently underway at Bayer. And the conclusions as well as the technical terms and definitions used do not necessarily correspond to those on which the DSO project is based.

Combining survey results, case studies and expert opinions, the study brings together a broad spectrum of sometimes conflicting perspectives. This should inspire managers to actively shape the organisation of work and provide orientation as to which aspects of collaboration are important for employees, where bureaucracy and hierarchy are perceived as helpful and where they are perceived as restrictive.

Our sincere thanks go to all the interviewees who took the time to share their expertise.

We wish you an insightful read!

Introduction 1

Companies are currently faced with the question of whether their organisational structures and internal culture are still suited to the challenges of today. Over time, large and established companies, in particular, have developed into complex organisations with numerous managers, hierarchical levels and comprehensive sets of rules. The strong centralisation and bureaucracy often resemble public administration. While these traditional organisational structures have their advantages in terms of reliability and accountability, there is also the risk that they become slow, averse to change and inefficient. Excessive bureaucracy can paralyse creativity and innovation. In addition, they may no longer be optimally adapted to the knowledge-intensive work and the technological possibilities of the 21st century.

This is because both the world and trends are changing in an ever-faster way. The digital transformation is affecting all areas of economic and social life and is mostly disruptive. At the same time, the ‘troubles in the operating system’ of national economies are increasing, as individual crises are sending out ever greater shock waves due to international economic interdependence, thus leading to cracks in global value chains – be it natural disasters, wars, pandemics or financial market bubbles. The World Economic Forum is now speaking of a ‘polycrisis’.1 To counter this external turbulence, companies need to increase their ability to innovate and adapt.

From an economic perspective, organisational change – namely, the transformation of a company’s internal structures, processes and cultures – ultimately aims to create efficiency in the coordination and motivation of employees.2 Firstly, the organisation must be designed in such a way that the actions of its individual members are coordinated so that they contribute to the common goal in the best possible manner – adapted to the requirements that the specific environmental conditions place on the company. And secondly, everyone should give their full commitment and not fall short of their individual potential.

The world and trends are changing in an ever-faster way.

Companies need to increase their ability to innovate and adapt.

This study addresses these two areas – coordination and motivation – and uses scientific findings to discuss how organisational change can be used to increase the efficiency and innovative capacity of companies. This is because corporate culture and the way in which employees are managed can become a company’s success factor in competition.

The analysis is divided into three main sections: Chapter 2 analyses how companies can become more resilient and agile by transforming their organisational structures. This primarily concerns the question of how decision-making powers are distributed and coordinated in order to make better and more effective use of employees’ specialised knowledge and skills.

Chapter 3 focuses on employee satisfaction and motivation. Attracting and retaining talent is a decisive competitive factor in times of a shortage of skilled labour. The results of a large-scale survey of employees reveal what is promising in this respect.

While the first two main sections essentially consist of a static comparison of the advantages and disadvantages of different organisational structures, Chapter 4 deals with the dynamic transformation process itself. What challenges do companies have to face, how can resistance be overcome and how can all stakeholders be brought on board?

This study contains in-depth interviews with experts from academia and practice as well as case studies of companies, from which insights can be gained into organisational change and dismantling hierarchies. This qualitative approach is complemented by a quantitative methodology: in a comprehensive and exclusive survey of employees, the Handelsblatt Research Institute gained empirical insights into how employees assess their organisation of work, how satisfied they are with it, what matters to them and what motivates them on the job. This survey was conducted in March 2024 in Germany, the USA and Brazil with the help of the opinion research institute YouGov, involving more than 1,000 participants in each country.

Organisational change to increase resilience and innovative capacity

2.1 A turbulent market environment and digital transformation place new demands on organisations

In an increasingly complex world, the pressure on companies to innovate and adapt is growing. They are operating in an environment in which the pace of change has significantly increased. Volatility and uncertainty have escalated, whilst at the same time the complexity of requirements is growing. Because technological progress has accelerated, product cycles are becoming shorter and existing knowledge is becoming obsolete more quickly.

Whereas in the industrial age the focus was on standardised mass-produced goods and the physical production process, today’s offers are more specialised; customers’ wishes have become more multidimensional. Knowledge-intensive work differs significantly from the physical production work that gave rise to the widespread corporate hierarchies.

Not only are sales markets characterised by high volatility, but companies’ supply chains, which are usually global, are also at risk of disruption. What is new here is the increased occurrence of events with

a high potential for damage but a low probability of occurrence, which are correspondingly difficult to calculate. These uncertainties are exacerbated by the threat of an increase in extreme weather phenomena due to climate change and ever-widening cracks in the multilateral world order. This is because international political cooperation has stalled and many people are disillusioned with free trade.

Digital transformation has a disruptive effect on production processes and business models

Organisations must not only continuously adapt to changing market conditions, but also keep pace with long-term technological change. The buzzwords ‘fourth industrial revolution’ or ‘Industry 4.0’ describe the penetration of the internet into all areas of business – from purchasing, warehousing, logistics and controlling to customer relationship and aftersales management. People, machines, materials and products are becoming interconnected.

What the coming years will bring – companies must prepare for turbulence World Economic Forum survey of around 1,500 international experts (2024), share in %

Which of the following best characterizes your outlook for the world?

Stormy: Global catastrophic risks looming

Turbulent: Upheavals and elevated risk of global catastrophes

Unsettled: Some instability, moderate risk of global catastrophes

Stable: Isolated disruptions, low risk of global catastrophes

Calm: Negligible risk of global catastrophes

Short term (2 years)

Long term (10 years)

Source: World Economic Forum3

Figure 1:

Physical products and machines are becoming ‘intelligent’ and share information with people and other machines in real time. In this way, the data level and physical processes are linked to form socalled cyber-physical systems. New business models based on platforms are also emerging. MIT economists Erik Brynjolfsson and Andrew McAfee (2014) refer to this as the ‘second machine age’. The digital transformation of the economy is expected to bring about no less far-reaching and lasting upheaval than the innovations that triggered the previous industrial revolutions (see Fig. 2)

Machine learning and mobile robotics are the basic technologies that characterise the ‘second machine age’. Machine learning is a field of application for artificial intelligence in which computer programs independently improve their performance by gaining experience.5 Deep learning in artificial neural networks makes the time-consuming programming of algorithms unnecessary. Instead, machines are able to acquire skills by trial and error. Such self-learning

machines can already perform certain tasks just as well as human workers – and sometimes even outperform them. This applies, for instance, in the areas of image and word recognition, speech processing and predictive maintenance of machines, stock planning or energy supply (so-called ‘predictive analytics’). Where large amounts of disorganised digital data are available, high-performance computers can usually evaluate them more efficiently than the human mind.

With the help of sensors and actuators and the use of artificial intelligence, autonomous, mobile robots and vehicles move independently in their environment. They cooperate flexibly with human workers and, for example, facilitate work processes that previously required a great deal of physical effort. In view of the successes already achieved by artificial intelligence, it can be assumed that machine learning represents a new general-purpose technology that will be used in numerous sectors of the economy in the future.6

4th Industrial Revolution based on cyber-physical systems

3rd Industrial Revolution through the use of electronics and IT to further automate production

2nd Industrial Revolution through the introduction of mass production based on the division of labour using electrical energy

Source: Fraunhofer IAO 4 1st Industrial Revolution through the introduction of mechanical production facilities using water and steam power

Figure 2: Sequence of industrial revolutions

2.2 From Tayloristic to holistic organisation

Organisations change in response to the different demands placed on them. This study contrasts two ideal-typical organisational forms, between which there are numerous hybrid forms in real companies. On the one hand, there are ‘Tayloristic’ organisations with strong hierarchies – on the other hand, there are decentralised, ‘holistic’ forms of organisation (see Fig. 3)

A relic of industrialisation

Tayloristic organisations are characterised by a deep internal division of labour and specialisation according to task areas. The namesake is the management teacher Frederick Winslow Taylor (1911). This corporate structure emerged in the age of industrialisation, when big industrial companies with large workforces were established for the first time. The aim was to increase the efficiency of production by exploiting specialisation advantages and dividing up increasingly small-scale work tasks amongst different employees. Clearly differentiated functions such as administration, production or marketing are thus carried out in different departments, which are coordinated by a hierarchy of managers. Standardised input services are transformed into standardised outputs.

Hierarchical form of organisation: TAYLORISTIC

Mechanistic organisation

• Bureaucratic organisation

• Classical internal division of labour

• Alternative terminology

One-dimensional activities

• High degree of specialisation

• Clear allocation of tasks

• Pyramid-shaped organisational structure

• Characteristics

Vertical

• Authoritarian control by superiors

• Routines and rules

• Structure of coordination

Safe decisions

• Reliability

• Standardised processes and products

• Suitable environmental conditions

Vocational training

• Specialised knowledge

• Workplace is tailored to skills

• Qualification requirements

Loyalty to the company

• Obedience to managers

• Promotion opportunities

Source: Own presentation

• Values

Decentralised form of organisation: HOLISTIC

• Organic organisation

• Post-bureaucratic organisation

• Holacracy, Humanocracy, Sociocracy

• Multidimensional activities

• Multitasking, job rotation

• Teamwork

• Network-like organisational structure

• Horizontal

• Self-organisation, adjustment within the team

• Trial and error

• Agile behaviour

• Uncertainty

• High complexity and changing requirements

• Willingness to engage in lifelong learning

• Creativity

• Skills change with tasks

• Sense of purpose

• Commitment to the task

• Customer orientation

Figure 3: Two opposing organisational ideals

The Tayloristic model organises the collaboration of sometimes thousands of people, ensures minimum standards, defines routines and prevents ambiguity in terms of responsibilities and decision-making procedures. At the same time, it is stable and works predictably.

This classic organisation of labour – with pronounced hierarchies, standardised work processes and rigidly defined decision-making powers – is increasingly being abandoned in favour of more interesting and complex mixed workplaces. The transformation of work into a holistic organisation is characterised by the integration of task areas, the decentralisation of decision-making powers and responsibilities within the company and the increased importance of teamwork.7 This also includes job rotation and cross-task learning – in other words, the transfer of experience gained at a specific task to new areas of work.

Since the second half of the last century, there has been a trend towards flatter hierarchies and a less authoritarian management style. Employees are granted more autonomy and traditional management tasks are distributed across more shoulders.

Vertical hierarchical levels are being replaced by networks of teams, and roles and areas of responsibility are being defined instead of management positions.

Such ideas go back a long way. Pioneers include the US economist Peter Drucker (1946) of Austrian origin and the English team of authors consisting of the sociologist Tom Burns and the psychologist George Stalker (1961). There are many different names under which decentralised, holistic forms of organisation are discussed – albeit each with different nuances and emphases. They range from holacracy, sociocracy or humanocracy to organic organisation or post-bureaucratic organising all the way to agile working and self-organisation.

The shift towards holistic work organisation was already described in business management literature in the early 1990s.8 More recent management bestsellers by Frédéric Laloux (2014) or Gary Hamel and Michele Zanini (2020) focus on the decentralised organisational approach and the move away from traditional hierarchies and have inspired many current transformation projects (see interview with HannsChristian Mahler and Felicia Werk on pp. 24 ff.) 9

Reinventing the organisation

Teal organisations

The book ‘Reinventing Organizations’ made Belgian management consultant Frédéric Laloux a pioneer of the new world of work in 2014.10 The former McKinsey partner uses the example of 12 companies to develop a new type of organisation that is designed to enable meaningful work and is depicted as bluegreen (‘teal’) in the colour scheme he developed. In this living organism, traditional power hierarchies dissolve and are replaced by ‘actualisation hierarchies’ in which employees take on the necessary roles depending on their ability and motivation.

Important principles: intrinsic motivation replaces the pressure to improve performance, there is self-management instead of centralised management, and team performance instead of individual performance. Decisions are made in a consultative process and the responsibility of the individual increases. In this way, the organisation should adapt to itself and align its purpose with customers and employees (see ten23 health case on p. 37 and interview with HannsChristian Mahler and Felicia Werk on pp. 24 ff.)

Humanocracy

The two management consultants Gary Hamel and Michele Zanini use the term ‘humanocracy’ to describe an employee-oriented type of organisation that is designed to make companies more innovative and flexible in order to meet changing customer needs.11 In a humanocratic organisation, all employees should give their best, develop their ability to innovate and work together to solve problems –especially those of customers.

The humanocratic organisation consists of agile, small, self-managing and self-organising units that are controlled as little as necessary by central hierarchies and bureaucracies. Hamel and Zanini primarily rely on market-like mechanisms as a control instrument for the cooperation of the individual units. As examples of industrial companies that work according to humanocratic principles, the two authors present the Chinese household appliance manufacturer Haier and the US steel firm Nucor (see Haier case on p. 19)

2.3 How employees characterise the organisation of their working environment

Labour force survey in three countries

The empirical study is based on a current and exclusive survey of employees on the subject of ‘Work organisation and job satisfaction’, which was set up by the Handelsblatt Research Institute (HRI) on behalf of Bayer AG.

The survey was conducted by the opinion research institute YouGov in Germany, the USA and Brazil. More than 1,000 employees from companies in each country took part in the anonymous online interviews based on the YouGov panel in March 2024. In total, the sample comprised 1,068 working people aged 18 and over in Germany, 1,004 in the USA and 1,010 in Brazil.

The results of this survey can be recognised by the orange coloured graphics.

As part of our survey, we asked employees in Germany, the USA and Brazil how they categorised their working environment along the two dimensions of hierarchy and authority (measured by the degree of control exercised by management).

Rigid company hierarchies are characterised by a pyramid-shaped structure, a clear division of tasks and a high degree of specialisation in activities. The respondents were given the opportunity to rate their workplace on a scale of 1 (= very flat hierarchy) to 5 (= very hierarchical).

Similarly, on a scale of 1 (= very independent) to 5 (= very authoritarian), they were asked to indicate what the management style in their working environment looks like. A distinctive feature of authoritarian organisations is that superiors decide on the allocation of work tasks and the specific execution of activities. The individual employees and teams have little room for manoeuvre to make their own decisions.

The self-classification of the workforce along these two dimensions results in an organisational matrix (see Fig. 4). This provides a snapshot of how employees in the individual countries assess their workplace organisation.

Figure 4: Workplace organisation from the employees’ perspective –hierarchies dominate the field

Share in %

Degree of authority**

Degree of hierarchy*

* Scale of 1 (= very flat hierarchy) to 5 (= very hierarchical) ** Scale of 1 (= very independent) to 5 (= very authoritarian)

Source: Handelsblatt Research Institute

It can be seen that hierarchical structures are widespread in all three countries and tend to be rated higher by the employees surveyed than the authority of the management style. Consequently, a certain degree of freedom for self-determined work also appears to be possible in hierarchies. In this context, the Swiss organisational researcher Antoinette Weibel speaks of ‘enabling bureaucracies’ with intrinsically motivated employees who think for themselves (see interview with Antoinette Weibel on pp. 68 ff.). It is striking that the Tayloristic type of organisation (upper-right quadrant) is much more pronounced in the USA and Brazil than in Germany.

Specifically, more than a quarter of respondents in the USA and Brazil describe their employer as very hierarchical or as somewhat hierarchical each. In total, 56 per cent of US respondents and 53 per cent of Brazilian respondents work in hierarchical companies. In Germany, on the other hand, the proportions were 15 and 23 per cent respectively, meaning that the total was only 38 per cent. Particularly amongst smaller companies with fewer than 500 employees, the proportion of those perceived as hierarchical is significantly lower in Germany than in the USA and Brazil.

Hierarchies are still very present, but are tending to become flatter Empirical research on organisational change over time – in contrast to the anecdotal evidence in management literature – is still rather thin on the ground.12 However, data from the USA suggests that the average number of hierarchical levels within large companies has fallen over the years.13 At the same time, the span of control (i.e. the average number of employees reporting to a particular manager) has increased. This means that companies are becoming flatter and, at the same time, more broadly organised. In Germany, too, there are examples of companies that are currently striving for a greater span of control whilst reorganising their internal structures.14

In our opinion survey, around 15 per cent of respondents in all three countries stated that their manager is responsible for up to five employees (see Fig. 5) In a country comparison, it is striking that in Brazil as many as 45 per cent say that their manager’s span of control includes more than 20 employees.

Share in %

Source: Handelsblatt Research Institute

Figure 5: Span of control – Managers are usually responsible for more than five employees

2.4 Factors that drive organisational change

The labour market economists Assar Lindbeck and Dennis Snower (2000) identify various interrelated forces that have set the development towards holistic forms of organisation in motion: apart from the increasing preference of the labour force for more varied working conditions and greater personal responsibility, which will form the subject of the third chapter of this study, these are primarily

• complementarities between work tasks caused by advances in production and/or information and communication technology, and

• the increase in the general human capital of employees, which leads to a more versatile workforce

Rising general qualification level increases flexibility of labour deployment

Modern work organisations were not only introduced to humanise the world of work. In addition to sociopolitical arguments, there were also economic arguments. This is because the scarcity relations on the labour market have changed. This was caused by the increased supply of qualified persons on the external labour market. The human capital of the labour force has expanded as a result of investments in education, making them increasingly capable of learning a wide range of skills. This allows companies to reorganise their workplaces in line with the holistic model.

As a result, many companies have replaced unskilled labour – which is more expensive in relation to their productivity – with comparatively cheaper skilled labour. In the area of industrial work, a continuous increase in formal qualification levels can be observed over time, meaning that unskilled labour is being replaced by skilled labour.15 In the USA, too, it can be seen that academically trained workers now make up a large proportion of the workforce in the manufacturing industry (see Fig. 6).

ISCED 2011 > 4

Figure 6: Rising qualification levels in the US labour market Share of employees with a university degree*, in %

Industry 4.0 technologies enable less hierarchical control

The reorganisation of work is receiving a new boost from technological changes as part of the ‘fourth industrial revolution’. Digital technologies make less hierarchical control possible as they reduce the costs of decentralised coordination.

The historically observed increase in the importance of management is attributed to the fact that many companies have become larger and larger over time, whereas the information capacities of individuals remain limited. According to US economic theorist Roy Radner, this has inevitably led to the spread of ever finer hierarchical levels for decisionmaking.16 Digitalisation has the potential to reverse this process: advances in information and communication technology are enabling flatter hierarchies, as workers at the grassroots level gain almost unlimited access to relevant information that was previously difficult to access or had to be interpreted by more experienced managers.17

Workers can communicate with each other more efficiently, receive better customer information and can therefore respond more quickly and accurately to changing needs. This interconnection opens up new opportunities for collaboration and learning within and between teams. And it is an important driver for the dismantling of hierarchies and the decentralisation of decision-making powers: those who have all the relevant information can also act and make decisions based on it. While the role of middle managers was traditionally justified by the fact that they had to ensure the flow of information – from executive management to the workforce, for example – this is far less important today.18

Physical capital is also becoming ‘smarter’ and more versatile: with flexible machines and programmable equipment, companies can broaden their range of services without the long changeover times that used to be the norm. One example is the use of additive manufacturing processes (‘3D printing’) in industry. This involves creating products by adding plastic or metal layer by layer. In contrast to conventional subtractive processes, in which the material is removed, the layer construction principle also enables the production of geometrically complex structures. However, this does not require new, specialised production machines for each job, as production is based solely on data. This means that 3D printing offers new opportunities to respond to customer requirements in a much more customised way – right down to a batch size of one. If machines in Industry 4.0 can do more and more, the labour force must also become more versatile in return.

2.5 Advantages of decentralised organisation in the use of knowledge

Companies rely on agile or flat organisational methods that replace traditional hierarchies in order to better access the distributed knowledge of specialised individuals. Knowledge in a company is only ever available in a decentralised form – in the form of the dispersed bits of knowledge that individuals possess and update on a daily basis.19 It can only be centralised with great difficulty and at great loss. This is because, due to the limitations of the human mind, no individual can ever absorb and process all the information that a group of people possess. In addition, much of the knowledge relevant to decisionmaking is ‘tacit knowledge’, which can only be codified and passed on to others to a limited extent.20

For this reason, systems that leave decisionmaking authority to individuals are in principle superior to centralised planning. However, autonomous decisions pose the problem of coordination, as the decentralised individual plans must be aligned. The

ideal decentralised coordination mechanism is the market, which achieves coordination with the help of impersonal price signals. In formal organisations, however, the coordination problem must be solved by other mechanisms, typically through personal communication.

The Chinese industrial company Haier has taken the transfer of the market model to the internal organisation to the extreme, in that even the crossdivisional departments such as accounting, human resources or marketing offer their services to the individual teams in a competitive process (see Haier case on p. 19). The various parts of the company use market-like mechanisms – transfer prices and contracts – to regulate their internal cooperation. However, the question arises as to whether this competition undermines the trust that is necessary for cooperation within a company (see interview with Antoinette Weibel on pp. 68 ff.)

Case: Haier A global company for the digital age

The Chinese home appliances and consumer electronics manufacturer Haier is a prime international example of the successful transformation of an inefficient state-owned company into an innovative global market leader – thanks to new management methods. Behind the establishment of successful decentralised structures is a strong leader: the son of a worker and party cadre Zhang Ruimin, who took up his position in 1984 backed by the Chinese Communist Party (CCP) and who also sits on the CCP’s Central Committee today.

Zhang initially developed his own corporate philosophy over a good decade: RenDanHeYi, an artificial word that brings people (= Ren) together with user needs (= Dan). Based on the management theory of the Austrian economist Peter Drucker (‘Everyone can be their own CEO’), he designed and tested his system of independent microenterprises (‘Every employee is their own boss’). All agile units should be self-organised and work towards a common corporate goal: to create added value for customers.

RenDanHeYi is embedded in Chinese Daoism, the human endeavour to connect with the universe, which is to be achieved primarily by adapting to change. RenDanHeYi therefore does not have a rigid, linear view of the world, but can also adapt ‘along winding paths’.

HAIER IN BRIEF:

Based on RenDanHeYi, Zhang formed his idea of an organisation for the digital age. Haier works as a platform that connects the various teams, employees and customers. The system relies on marketlike mechanisms and the use of digital technologies to optimise processes and coordinate the agile teams. Even the central functions such as HR, finance, IT or legal (so-called nodes) negotiate contracts for their services with the microenterprises. These supporting departments are thus transformed from pure cost centres into profit centres and now have to sell their services to the company.21 Allocation via transfer prices is intended to ensure efficiency and flexibility.

An important technical basis for internal and external cooperation is Haier’s digital platform COSMOPlat (Cloud of Smart Manufacturing Operation Platform), which the Group has been using worldwide since 2012 and has also opened up to other companies. Digital twins allow work and value chains to be managed more efficiently on the platform.22

Around 75,000 employees in about 4,000 microenterprises Headquarters: Qingdao Well-known brands: Candy, Haier, Hoover

Figure 7: Hierarchical companies are perceived as slow, inefficient and less customer-oriented Agreement* with the statements in the respective organisational forms**, in %

‘In our company, we take a very long time to make decisions and lose important time in the process.’

‘I often think that too much time is spent on unnecessary meetings and outdated processes and not on purposeful work.’

Germany

‘Too often, we decide because of internal considerations instead of customer preferences.’

‘We are encouraged to seek contact with customers in order to get as close as possible to their needs.’

* ‘Fully agree’ or ‘somewhat agree’

** Holistic: hierarchy and authority level 1 to 2; Tayloristic: hierarchy and authority level 4 to 5

Source: Handelsblatt Research Institute

Hierarchies slow down decision-making

processes and leave knowledge unused Decentralised organisation brings decision-making closer to the people who have the relevant information. This is often the experiential knowledge of employees at the grassroots level. Holistic organisations enable closer interactions with customers and make it easier for employees to bring their detailed knowledge of customer preferences to the work at hand.

Our survey supports these considerations: employees in hierarchically structured companies more often perceive internal decision-making processes as slow and cumbersome than those in companies with a decentralised organisation. They also criticise more frequently that decisions are not based on the wishes of customers (see Fig. 7). In the USA, this is true even though employees are generally encouraged to be customer-oriented, largely irrespective of the organisational structure.

Creativity

is in demand: decentralised companies are more open to innovation

The myth of the groundbreaking innovation emerging from the garage is misleading: the vast majority of innovations that have had the greatest impact on society were developed by employees and not by independent inventors.23

At a time when technological progress is accelerating massively and new products are coming onto the market faster and faster, the ability to innovate is becoming a crucial capability for a company. At the same time, the turbulent market environment and the high number of external shocks require a higher degree of adaptability and manoeuvrability. In order to remain competitive, it is critical for companies to create an innovative corporate culture.

Holistic forms of organisation therefore aim to treat employees like internal entrepreneurs. The neologism ‘intrapreneurs’ is sometimes used in management literature to describe this.24 The desired innovations do not only relate to the market in the sense of the constant search for new product ideas or business models. They can also relate to internal processes and organisational methods – in other words, questioning ‘how things are done’.

How much freedom managers give their employees for creative work does not necessarily depend on the hierarchical levels of a company. For instance, a hierarchical organisation can also cultivate a cooperative and empowering management style instead of relying on authority. Our survey shows that, on both sides of the Atlantic, a culture of experimentation and openness to innovation is much more common in companies where flat hierarchies meet a high degree of autonomy in decisionmaking (see Fig. 8)

Figure 8: Holistic organisations are more open to innovation Agreement* with the statements in the respective organisational forms**, in %

‘Innovations are valued, even if they fail.’

‘Personal initiative, proactive behavior and new ideas are desired and rewarded.’

Germany

‘We are always ready to challenge how things are done and to try out new approaches.’

‘I sometimes feel held back because there is little room for initiative and creativity in my work environment.’

* ‘Fully agree’ or ‘somewhat agree’

** Holistic: hierarchy and authority level 1 to 2; Tayloristic:

Source: Handelsblatt Research Institute

and

4 to 5

Case: Sipgate Reducing hierarchies strengthens innovative power

As the most important motives for decentralised transformation, co-founder Bastian Wilhelms cites paralysing hierarchies and negative marginal productivity (see interview with Bastian Wilhelms on pp. 32 ff.). In 2009, around five years after the company was founded and with just 63 employees at the time, Sipgate’s management pulled the ripcord. The managers saw themselves as ‘gatekeepers for decisions’ (Wilhelms) and thus became a problem for their own organisational structure.

Wilhelms describes how the pyramid-shaped hierarchy increasingly became an obstacle for the telecommunications company: ‘Every new product first had to pass through all levels of the hierarchy before it could even be developed and marketed.’ And the bureaucracy developed its very own momentum. Due to the need for coordination, the company’s top management had a completely synchronised daily routine, he recalls. To relieve the pressure, Sipgate kept hiring new middle managers to support the top management in their work, which Wilhelms now categorises as ‘unproductive’.

The Düsseldorf-based telecoms provider has now grown to around 300 employees and has largely abolished its hierarchies. Around a sixth of the workforce takes on cross-divisional tasks such as security issues, works as a lead or coach for the coordination of cross-functional product teams. However, these 50 or so coordinators also mostly work in the individual teams, which include software developers, designers, copywriters and customer consultants. The agile teams work independently, making 98 per cent of all decisions themselves and in close consultation with the customers. Even the socalled ‘unpleasant management tasks’, such as staff

SIPGATE IN BRIEF:

appraisals or other personnel decisions, are handled by the respective team. Every two weeks, after the so-called ‘strings’, the teams check whether they have achieved their goals in a sensibly coordinated manner. Regular feedback and non-violent communication are just as much a part of the corporate culture as colourful sticky notes. The common goal: to create added value for customers. ‘We have no titles, no managers, no departments, no salary negotiations, no budgets. We are lean and agile, wholeheartedly,’ is how the Sipgate team characterises its form of organisation. This combines lean production methods based on the Toyota model with agile organisational methods from software development (Scrum). Tim Mois and Corinna Baldauf’s book ‘24 Work Hacks... auf die wir gerne früher gekommen wären’ (2016), published by Sipgate, documents the sometimes painful journey to this point.

The result of the decentralised organisational reform: the company is developing its products faster, more efficiently and more innovatively than before. Wilhelms is pleased to say that the telecom provider is outperforming some of its larger competitors with its innovations. And the employees work ‘with dedication’, as he puts it. Employee satisfaction surveys were abolished because they regularly produced the same results.

However, the decentralised, organic organisational structure is by no means self-sustaining: in Wilhelms’s experience, whenever the company crosses the threshold of around 100 additional employees, inefficient decision-making processes creep back in. But the Sipgate teams now know the recipe: they constantly review the organisational structure and develop it further.

Literature: Mois / Baldauf (2016).

PROFESSOR DR HANNS-CHRISTIAN MAHLER, ten23 health, CEO,

Founder, General Circle Lead.

FELICIA WERK, ten23 health, People & Culture.

‘Things don’t entirely work without rules and a framework’

At the Swiss pharmaceutical start-up ten23 health, many employees first have to learn how to work in a self-organised and agile way. A framework aims to help them make decisions themselves.

Established companies want to become faster and more innovative by reducing bureaucracy and creating flat hierarchies. Is that why ten23 health started with a decentralised organisational structure in 2021?

Mahler: For around 20 years, I worked in large pharmaceutical companies that had many control mechanisms in place. If you want to buy a train ticket, for example, the train may have left the station long before the authorisation round has gone through four hierarchical levels. When these companies become ‘lean’ – and introduce leaner structures – they naturally become faster.

However, agility and speed were not at the forefront of our minds when we founded the company. Rather, I was put off by the egocentric management style in traditional organisations. I was looking for an operating system that was based more on personal responsibility and collaboration than on ego. Reading Frédéric Laloux’s ‘Reinventing Organizations’ was a spark that showed me that things don’t have to go on like this. Certain traditional structures, which I know all too well, lead to organisations being preoccupied with themselves and wasting a lot of time.

Werk: In large corporations, it used to be difficult for me to see how the potential of so many people was not being utilised. For example, when a new IT tool was introduced in production, I found that many employees were not prepared to familiarise themselves with the new technology and train themselves accordingly. However, the same people were then able to handle the most complicated mobile phone apps in their free time and quickly teach themselves everything. In my experience, this is mainly due to the corporate and management culture, which in some cases has shaken people’s motivation and confidence in themselves.

Yet I’ve also seen managers who were terribly hierarchical and authoritarian in the company and at the same time wonderful mothers or fathers and friends in their free time, counselling other people through difficult situations. So something went wrong! These mechanisms that destroy people’s self-confidence start at home and continue at school and in hierarchical organisations, causing people to lose trust in their employers. This conditioning and lack of trust goes so far that our employees were initially suspicious of trust-based working hours and leave and sometimes preferred to clock in.

Interview: Professor Dr Hanns-Christian Mahler, Felicia Werk

Influential management consultants such as Frédéric Laloux and Gary Hamel want to reform organisations in such a way that employees gain more freedom and responsibility. But will employees then develop creativity and motivation almost automatically?

Werk: For many people, intrinsic motivation has been so suppressed for years that they first have to rediscover it. And that is an exciting journey that is worthwhile. However, too much freedom can initially be overwhelming. For example, we didn’t allocate any budgets to the teams, but asked everyone to handle the money as if it were their own. This overwhelmed many people. That’s why we initially developed frameworks that were not intended to exert control over employees, but to help them make their own decisions. We documented how we want to deal with issues such as recording working time, holidays and benefits in our corporate culture and asked employees to develop these frameworks further with their own ideas.

Mahler: When I founded the company, I initially wanted no rules and as few guidelines as possible. This worked with new employees who were looking for a work culture in exactly that fashion. But we also had many colleagues who were unable to put aside their long-standing conditioning in larger companies and simply make their own decisions. This began, for instance, with the choice of tickets for a business trip, for which we deliberately had no travel regulations. However, to help employees with their decisions, we then wrote a chapter on this in our framework guidelines. With questions to help them make decisions.

I also learnt from a wonderful study in a kindergarten that we need to set some boundaries: initially, the children had all the space they wanted in an area of around 10,000 square metres. But instead of using the space, they all clustered around the kindergarten teachers. When the area was then divided into smaller fields of perhaps 1,000 square metres, the children suddenly ran around freely.

We are therefore gradually approaching our goals and trying to help employees regain trust. This is why we have also made our trust-based working hours flexible. Previously, we had heard from employees that they were afraid they might be accused of working too little at some point. As we were unable to dispel this fear by explaining to them that work is not a function of time, we introduced optional time recording for those colleagues who

felt more comfortable with a time clock. However, we hope that in the long term, colleagues will move on from previous experiences of control and gain long-term trust in us as an employer and experience psychological security.

Does a self-responsible organisation need particularly proactive or intelligent employees?

Mahler: What company doesn’t need intelligent employees? With the rapid changes in the world of work, the others are in danger of being automated away or becoming superfluous anyway. An employee definitely has to think! But not all production employees need to familiarise themselves with our entire business management system. They do, however, need to think and intervene in the event of possible deviations in production – for example, by recognising how errors can be avoided.

That‘s what empowerment is about. In our rolebased work, everyone has their own job descriptions, which can also evolve over time.

Werk: The ability to reflect internally is actually crucial for us. Going into depth and questioning our own self-organisation has proven to be particularly important for us – but also a personal challenge for many. For example, we work without titles such as ‘Director’ or ‘Vice President’. This has triggered enthusiasm but also uncertainty. For me, it’s nice to see that many have reflected on what titles and careers actually mean to them and what they really need in order to be satisfied.

The keyword ‘role-based work’ was mentioned. How is work organised in research and production at ten23 health?

Werk: We are organised in so-called Circles and also have Circle Leads. After all, flat hierarchies and self-organisation do not mean a lack of leadership. However, we do not work with rigid job descriptions. A person can fulfil various roles that they themselves help to define. For each role, there is a ‘purpose’, a positive determination towards which it should run, and around three to five responsibilities. For example, I am not a personnel and organisational developer or HR Business Partner, but can perform various roles such as Framework Fanatic, Mediation Angel or coach. And these roles

Interview: Professor Dr Hanns-Christian Mahler, Felicia Werk

can also be anchored in different Circles. This focus on strengths enables us to respond to people’s individual needs and strengths and support them in developing in a way that everyone enjoys.

Mahler: In traditional pharmaceutical companies, there are specialised departments for development, a pharmaceutical development department, an analytical development department and so on. We have dissolved this system of specialised departments. We have a Circle for Production, also with Sub-Circles. But in Development, we have integrated everything, and all colleagues who contribute something come together on a project basis. This project basis is a further development of the classic matrix organisation. We want to avoid the chaos that I have occasionally experienced when different departments clash in project teams. Then either the function or the project team was so dominant that everyone paralysed each other. Our responsibilities are clear, are in the system and are transparent for everyone. The meetings and decisions of the General Circle (the executive level) are also public.

That doesn’t sound like the classic management role with guidelines, but rather more like psychological corporate management ...

Mahler: You don’t learn that at traditional management school; it’s more about the tamer staff or the KPIs that have to be monitored. But even in my first job, I focused on human interaction, mindfulness and the team.

This new organisation must first be learned by all employees. Doesn’t that also paralyse you?

Mahler: No, on the contrary. When I went on holiday in the first year, for example, I was able to really enjoy it. No nonsensical little requests for train tickets or the like piled up on my desk. I knew that the company could function without me and that my colleagues would have the confidence to make decisions without me. After the three weeks, even the organisation was structured differently. I thought that was great, as the Circles and the individual roles are always evolving. So I don’t see any paralysis. It’s just important not to fall back into the rut. For instance, I don’t want to fall back into the traditional management mode and decide something when colleagues have conflicts with each other that they could actually resolve together. Even with the train tickets, I didn’t take the decision away from my colleagues – they had to make it themselves.

So far, when we talk about New Work, we have mostly been talking about workers who have to be able to multitask and constantly relearn. But it’s actually about managers who are socially compatible, empathetic and psychologically adept. So do we primarily have a management issue when it comes to transforming the organisation?

Mahler: This categorisation of employees and managers has always bothered me. Self-organisation requires empathetic leadership. If I want managers to hand over responsibility and put people first, then the company management must also set an example. This must then be permeated through all levels of the organisation.

Werk: The decision not to work hierarchically is a hierarchical decision. But the motives behind it are decisive. If a manager only decides to do this in order to make the company more agile, faster and cheaper, it works differently than if the manager is based on their values, wants to create a peopleoriented company and exemplifies this themselves. In the first case, employees see through the motives for reducing hierarchies as bogus arguments and know that another trend could come along –whether operational excellence, diversity and inclusion or sustainability – and then everything will change again. So it makes sense for them to wait until the fad has passed again.

With us, the main difference is the overall philosophy behind it, which is not simply a trend. In surveys, we hear that our employees have never had so much fun at work and that they feel recognised as people – this cannot simply be achieved with some management method.

Interview: Professor Dr Hanns-Christian Mahler, Felicia Werk

Ten23 health now has just under 200 employees. How much longer can you continue to grow without giving up your entrepreneurial spirit and your decentralised, flexible structure?

Mahler: With our number of employees, we have actually already exceeded the size that is critical for a village according to a study: only up to 150 villagers know each other and can also live together (Dunbar’s number).

Of course, there are much larger organisations, such as the Chinese household appliance manufacturer Haier, which are organised very decentrally. But they have gone one step further and created their own microcosms. If we were to grow to a size of 10,000, then our system of Circles and roles would no longer be scalable. Then we would also have to form autonomous units of some kind.

Mahler: The inner attitude, the ability to lead oneself and the willingness to change are essentially the recipe for companies and employees for the future of work. Our focus at ten23 health is clearly on people-centred work, sustainable management and the fact that we want to make a sustainable, albeit small, contribution to changing the pharmaceutical sector – and possibly society – through our ‘what’ and our ‘how’.

How did ten23 health integrate the second location in Visp, which previously had a hierarchical structure, during the first takeover?

Mahler: We also dissolved the functions there and fully integrated both locations into our organisational structure. If we set up or acquire further locations, we will of course also have to decide how to integrate such teams – for example, whether we have to develop a separate Circle, which then has to be given autonomy in some way.

Werk: During the cultural transformation, we drew a lot of inspiration from TheDive’s ‘Loop Approach’. Every team and every colleague embarks on their own individual journey and examines what they need to work well in a purposeoriented way. We find the focus on purpose and needs (purpose-driven and tension-based work) extremely helpful. Just like the inspiration from the experiences of others who are on a similar journey – this is new territory for all of us, and it helps enormously to learn from each other.

For me personally, this way of working is incredibly energising and I can’t imagine working any other way. Perhaps the biggest disadvantage is that it has a high potential for addiction!

Interview: Professor Dr Hanns-Christian Mahler, Felicia Werk

Empirical studies suggest that holistic forms of organisation bring economic advantages

To date, there have only been a few empirical studies that systematically examine the relationship between organisational change towards more decentralised, less hierarchical structures and corporate success. An analysis of company data from Switzerland provides evidence that a reduction in hierarchical levels has a significantly positive effect on the profitability of companies.25 However, this is smaller than the effect on productivity, which is presumably due to the fact that the salary level for non-executives in flatter organisations is increased in order to compensate for the loss of promotion opportunities.

An analysis of data from Spain comes to similar conclusions: According to this, companies are more financially successful if they implement a corporate culture that promotes entrepreneurial thinking (‘entrepreneurial mindset’), creativity and a willingness to take risks.26

A survey of 500 US managers also shows that companies that organise themselves into small, independent teams are on average 1.3 times more likely to be financially successful and 1.2 times more likely to attract and retain skilled employees (see Fig. 9) 27

Other studies focus on the interaction between organisational change and the ability to innovate. The latter is considered both internally and externally –namely, both in relation to the use of innovative processes and technologies within the company and in relation to the development of new products and business models. A study that draws on data from a Finnish company survey concludes that a workforce with a high level of intrinsic motivation is significantly conducive to a company’s ability to innovate.29 A strong sense of belonging to the team, a willingness to learn and the feeling of pursuing a meaningful activity provide corresponding positive impetus.

There are already numerous studies that have investigated the reverse causal relationship: for example, a meta-study confirms that innovative companies are much more likely to have a corporate culture that emphasises flexibility and personal responsibility rather than control and dirigisme.30

Our survey shows that workers in Tayloristic organisations often have the feeling of a paralysing bureaucracy that even stands in the way of success (see Fig. 10). Holistic organisations, on the other hand, give employees more opportunities to get involved and fare better at conveying a sense of purpose.

By how much better US companies that apply the management principles mentioned perform, in %

Source: Outthinker Networks28

Figure 9: Independent and decentralised working increases success

Figure 10: With decentralised work organisation, employees complain less about paralysing bureaucracy and feel more self-efficacy Agreement* with the statements in the respective organisational forms**, in %

‘Our team/department would be more successful if we could work more independently and less under instructions.’

‘I sometimes have the feeling that regulations are placed above people.’

Germany

‘I have the feeling that my opinion counts.’

‘ I have the feeling that my work makes a difference.’

* ‘Fully agree’ or ‘somewhat agree’

** Holistic: hierarchy and authority level 1 to 2; Tayloristic: hierarchy and authority level 4 to 5

Source: Handelsblatt Research Institute

Methods for agile teams

Loop Approach

This reorganisation method, which is also used to transform large companies towards decentralised structures and self-organisation, draws on various theoretical concepts, such as holacracy and nonviolent communication approaches.31

The ‘Loop Approach’ starts at the grassroots level of the organisation: with the individual teams. In a structured process, they deal with their collaboration – for example, with their roles, feedback and conflicts. In this way, the team embarks on a journey in which – as the word ‘loop’ suggests – it continuously adapts and develops its working methods. Based on Frédéric Laloux’s management theory, the Loop transformers describe the various developments of an organisation using five colours, which stand for five values: impulsive (red), conformist (yellow), performance-oriented (orange), pluralistic (green) and evolutionary (blue-green or ‘teal’) (see interview with Mirja Bastian on pp. 44 ff.).

Scrum method

This agile organisational model originally comes from software development. It is used for projects that are managed by decentralised teams as independently as possible with the help of specific interim goals.32 ‘Scrum’ structures complex processes with standardised rules, defined stages (‘sprints’) and three roles (‘product owner’, ‘Scrum master’ and ‘Scrum team’). This process model is designed to encourage the team to utilise its interdisciplinary skills efficiently and creatively, thereby creating added value (see Sipgate case on p. 23 and interview with Bastian Wilhelms on pp. 32 ff.)

2.6 Merits of authority in rapid decision-making

Agility and authority are not mutually exclusive. When it comes to the effective and rapid development of new courses of action, moving away from hierarchical structures of influence is not necessarily the ideal solution.

Decentrally organised teams may get caught up in excessive experimentation and find it difficult to choose a particular path when there are various suitable options. Coordination errors occur when autonomous decision makers interpret a situation differently, even though they are actually pursuing the common goal of quickly arriving at a compatible solution.33 In contrast, hierarchical influence can reduce uncoordinated parallel research and thus speed up the decision-making process.

This means that in certain decision-making situations that require a coordinated search effort, teams can achieve agility and reach satisfactory results more quickly precisely through hierarchical influence. This is true even if the leaders have neither superior knowledge nor foresight or even the ability to perfectly control the actions of their subordinates. This is the conclusion of a mathematical simulation study by international management researchers.34 Rather, the ability to create converging expectations among all those involved is crucial. Accordingly, the Scrum method, which often serves as a blueprint for agile organisation, explicitly provides for roles that can exert asymmetric influence on decisionmaking35 (see box ‘Methods for agile teams’ on p. 30)

Conclusion: Even decentralised organisations cannot manage completely without authority. Hierarchies will therefore continue to be found in the knowledge-intensive economy. Finding the optimal balance between self-organisation and control is crucial to a company’s success.

BASTIAN WILHELMS, Co-Founder of the telephony provider Sipgate and responsible for the areas

of organisation and portfolio

‘You can’t save money with agility’

Thanks to its agile transformation, the telephony provider Sipgate is achieving better results with the very same workforce. The organisational structure is constantly being adapted. The decentralised teams are successfully coordinated thanks to clear targets.

You have restructured Sipgate in the direction of agility and decentralisation. How would you describe the success of your transformation?

There is often a misconception that I would like to clear up. If an organisation switches to agile in order to save money, then that’s a very bad idea. It’s not going to happen, there’s nothing to save. But what you can achieve is an increase in impact: you obtain better results with the same people.

A comparison with other telephone companies shows this in our case. Large corporations such as Vodafone, Telekom and Telefónica have already visited our office in the Düsseldorf Medienhafen district to see how we work. And after the tour, they are often amazed at what we develop ourselves with just under 300 people. That’s the success of our transformation.

In view of the shortage in labour, this is very interesting: have hierarchically organised companies tied up too many people in unproductive jobs that could be activated and deployed more effectively?

That was the aim when we realised, in 2009, with only 63 employees at the time, that we had to change something. Because with every additional person we hired, not only did the productivity gain per person decrease, but so did the overall productivity of the company.

In economic terms, that corresponds to a negative marginal product of labour ...

Yes, we were worried about that. It didn’t work because we were organised like a pyramid. There were departments with people who acted as department heads, and that went all the way up to the top-level management. The main problem was that every new product or new feature had to go through all the departments before we could develop and market it. The coordination efforts that went up the entire hierarchy were gigantic. We had lots of good suggestions that had to be

decided on according to this scheme. My working day was completely organised. It took us a while to realise that we ourselves – as ‘gatekeepers for decisions’ – were a huge problem. Previously, we had hired a lot of people to help us with what we now consider to be unproductive auxiliary work. We thought we needed managers to distribute the work better, as if it were a matter of optimising the handover points. Today, we no longer need these handover points.

Today, decentralisation is the basic idea at our company: 98 per cent of all decisions are made directly by the teams themselves, in close collaboration with the customers, without the need for reassurance from a ‘centre’.

Of course, these team decisions – the 98 per cent mentioned above – also include unpleasant tasks such as staff appraisals, critical feedback and dismissals. Isn’t it easier for team building to blame these on a hierarchy?

We actually call these the ‘unpleasant management tasks’. Since our organisation doesn’t have explicit managers, these tasks are not simply eliminated, but are rather distributed among many people. For instance, no one is responsible for a department, for all personnel decisions and for the budget in the same way as in a traditional organisation. With us, this is divided up among the people who are most competent for the respective issue.

Unpleasant management tasks include hiring, separations, formulating performance expectations and also taking action if they are not met. This does not necessarily lead to dismissal; in fact, it happens comparatively rarely at our company. Instead, we have a kind of internal placement marketplace through which employees constantly move between teams. We talk and think a lot about which skills and people are particularly suitable for which area and which project.

At our company, the teams also feel like a family and have close ties to each other and to the product they are working on. They work together with great dedication and set their own goals. However, it is easier to judge from the outside whether this joy and dedication is also leading to success – for instance, contributing to sales. To assess whether something needs to change in the team, we

Interview: Bastian Wilhelms

regularly ask questions such as: where was a team three months ago? Where does it need support? Where do we think it will be in three months’ time?

Our teams stick together and function in much the same way as a professional sports team like in the German football league. People from the outside also consider which players need to be put on the pitch in order to win. And that includes taking people out of the team who might not be so helpful for the phase ahead.

How does coordination between the teams work at Sipgate?

It revolves around a ‘horizon organisation’: goals are formulated in advance as well as the corresponding metrics by which success can be recognised. In our company, the so-called product leads are responsible for the fate of a particular product. Together with the technology, design and research departments, they develop the precise goals and characteristics of where the product should be heading and specify the framework conditions. For instance, that the new product should not cost more than 20 euros a month. This gives them control over the content so that the many teams working on larger products are able to create something on their own responsibility which altogether forms a coherent picture and looks as if it has been cast from a single mould.

With clear guidelines within the decentralised organisation, we want to avoid teams researching in their own area coming up with lots of clever things that are far removed from each other. After all, we don’t want to end up with ‘Frankenstein products’ that have a huge range of features, but of which the customer only uses a very small percentage.

In addition to the product coordinators, agile coaches support the teams in their collaboration. This involves handover points – for example, when several teams are involved in implementing a major new feature and their work has to correlate. We also have an HR team that helps the teams with the recruitment process, writes job adverts, sifts through applications and those sorts of things. Whenever a high level of specialisation is required, the teams get external support.

Interview: Bastian Wilhelms

How many of your almost 300 employees have such overarching tasks?

We have about 50 people working on coordination tasks, with the rest working more or less in production or product development. But the boundaries are fluid. For example, there are specialists in these decision-making positions who also contribute their expertise to the teams. Because these 50 people should also remain close to the products and customers.

According to your description, the various tasks in a decentralised team should be distributed according to ability. People are often fast to take jobs that they can’t actually do. How do you deal with egos and sensitivities?

We have a multilevel system for such cases ensuring that these people are looked after and contained. For us, this runs under the heading of feedback. We work in ‘sprints’, in which the team defines at the beginning in a story exactly how it wants to complete the upcoming tasks together over the next two weeks. In this team meeting, it can happen that people quickly want to take up tasks for which they are not really suited. The team decides on this independently and can realise after two weeks in a retrospective that a person has not completed their task. The team can then decide in a meeting in the so-called ‘retro room’, from which nothing should leak out, that the tasks should be distributed more sensibly next time. The team itself can do this better than any manager. For me, that is the core of agility. The team itself is best placed to decide on the distribution of tasks and the use of external tools.

model. With a certain development in the number of employees – in our case, for instance, with around 100 additional employees –there are always break points when changes become necessary. In the run-up to this, the pain and dissatisfaction increase again. Even in an agile organisation, not everything always runs smoothly; in fact, the opposite is the case. Because the things that don’t work are immediately on the surface. Normally, the hierarchy covers this up. But we don’t have managers who exude competence and confidence and use this to cover up problems. This means that everyone is very aware of the organisation’s problems. The advantage is that we can also solve them much more quickly.

Your structures are still quite manageable and you are close to your products and customers. This allows you to react quickly to changes. Do you think your decentralised, agile organisational model can also be transferred to complex industrial companies that also have to comply with many legal requirements?

Agility, decentralisation, self-organisation and a reduction in bureaucracy are also valuable for large industrial companies. And if you define the terms broadly: according to everything I have read in management literature about lean management and the Toyota model, for example, employees in production at big industrial companies can also take on a great deal of personal responsibility, which then leads to major increases in productivity.

The legal requirements and safety standards are also high in the telecommunications industry. But I’m not sure whether it would make sense to build a nuclear power plant in an agile way ...

These kinds of coordination and feedback meetings can also cost time and nerves. In your experience, how does agility affect employee satisfaction in the long term?

In the initial phase, we tried to measure this with surveys. Unfortunately, they always had the same results, so we gave it up. But you can feel the cohesion and incredible enthusiasm that people display. And the results speak for themselves: many things work better than before. However, we have already changed our organisation twice since the first transformation. In my view, a company develops in phases, in part depending on turnover and the number of employees. In business administration, this is often depicted in a four-phase

Decentralisation is not a new topic. Isn’t it an inseparable part of digital transformation today? Shouldn’t it go hand in hand?

Absolutely. Because the digital tools that we use are increasing and becoming increasingly more specialised. Artificial intelligence is speeding this up. All of our jobs are already relatively highly digitalised, more so than in many industrial companies. Changes – like the recent sudden availability of artificial intelligence in practically all tools – are having a major impact on everyday working life, and we can benefit greatly from this. It may not be so easy for an automotive company, though.

2.7 Internal bureaucracy paralyses decision-making processes

What hinders decision-making is therefore not so much authoritarian control as such, but rather the administrative burden. The focus of the decentralised restructuring of organisations is therefore usually on reducing internal bureaucracy. Surveys show that employees often find the extent of such regulations paralysing. This applies, for example, to documentation requirements, regulations and coordination processes.36

The more time is spent on administrative tasks, the less is left for productive work. Our survey of employees shows that the majority of respondents currently spend more than 20 per cent of their working time on administrative tasks (see Fig. 11) In Germany, this applies to 50 per cent of survey participants, in the USA to 58 per cent and in Brazil even to 65 per cent. Consequently, there is great potential for efficiency-enhancing restructuring measures.

Figure 11: Country comparison: in Germany, the burden of bureaucracy in the workplace is perceived to be the lowest How much working time is spent on purely administrative tasks, approval ratings in %

Source: Handelsblatt Research Institute

Large companies, in particular, rely on complex hierarchies and internal bureaucracy

In all three countries analysed, there is a strong correlation between company size and whether employees perceive their working environment as hierarchical (see Fig. 12). In addition, a majority of respondents feel that the abundance of internal rules and regulations is largely unnecessary. In Germany, in particular, there is a clear correlation with company size.

So far, reorganisation measures to reduce internal bureaucracy in order to leave more working time for productive activities do not appear to be sufficiently effective. This is because, from the workers’ point of view, the administrative burden tends to increase, whereby this assessment also tends to correlate positively with the size of the company.

Figure 12: How hierarchy and control depend on the size of the company Share in %

Company size by number of employees:

5,000 and more

Respondents who characterise their company as hierarchical*

Germany

Agreement** with: ‘I have the feeling that the administrative burden has increased over the past 5 years.’

Germany

Agreement** with: ‘There are too many specifications, rules, and guidelines in our company. What they say is usually clear anyway.’

Germany

* Hierarchy level 4 to 5 ** ‘Fully agree’ or ‘somewhat agree’

Source: Handelsblatt Research Institute

Case: ten23 health

Non-hierarchical right from

In his career as a pharmaceuticals manager, HannsChristian Mahler had previously been annoyed by how bureaucracy and an authoritarian management style paralysed many people and developments.

Reading ‘Reinventig Organizations’ by Belgian management expert Frédéric Laloux strengthened his conviction: things should be different at his own start-up. More agile and more human than Mahler had experienced in research at large corporations such as Merck and La Roche. At ten23 health, which has been producing biopharmaceuticals since September 2021, the focus should be on people, respectful interaction and the team right from the start. Consequently, the habilitated pharmacist started in Basle three years ago not as CEO, but as ‘General Circle Lead’.

the start

is no longer needed for the objectives and tasks, it is abolished. This role-based form of organisation has a certain self-selection effect, as known from the economics of incentives:37 it therefore attracted employees such as HR developer Felicia Werk, who wanted to work in a more self-determined and effective way – or simply shake off the bureaucracy of other companies. But employees who feel more comfortable with rules also find their role in the start-up (see interview with Hanns-Christian Mahler and Felicia Werk on pp. 24 ff.)

His start-up is divided into flexible teams known as Circles. Production and development also form special Circles on a project basis. Coordination and management are concentrated in the General Circle, whose decisions can be viewed transparently on the intranet. Just as the division of the Circles is adapted to the respective tasks, the responsibilities of the employees are also flexible. The roles are linked to tasks, not to people, and coexist on an equal footing. A role is assigned all decision-making competences in order to fulfil its bundle of tasks. If a role

TEN23 HEALTH IN BRIEF:

When the Basle-based start-up took over the Valaisbased pharmaceutical bottler Swissfillon shortly after its launch in October 2021, adding another production facility with around 40 employees, Mahler was faced with major restructuring tasks: this was because work in Visp had previously been rather traditional and hierarchical. The Circle Lead rigorously dissolved the traditional functions and integrated them into the decentralised organisation. This was not without resistance. But the start-up succeeded in this first feat of strength, partly because Mahler was able to convince and inspire most of the employees as a role model. The General Circle Lead is credible and unpretentious. And if people don‘t feel comfortable in the current organisational structure, then it will simply be rebuilt.

Pharmaceutical contract manufacturer, develops and produces injectable biopharmaceuticals (CDMO)

Founded in 2021

1023 is the multiplier of the Avogadro constant for calculating the particles found in one mole, which pharmacists learn in their undergraduate studies.

Around 200 employees

Carola Aldag

CAROLA ALDAG, Head of HR

Development and Transformation at DB Cargo; previously responsible for the reorganisation and expansion of HR development at Hamburger Hafen und Logistik AG.

‘All large organisations get bogged down over time – and that’s normal’

According to the transformation manager, organisational change is a Herculean task in traditional companies. Over time, entrenched structures seek to preserve themselves. This often detracts from the overarching context, customer requirements and corporate goals.

DB Cargo CEO Sigrid Nikutta has announced that Deutsche Bahn’s loss-making freight transport division will work with smaller, more agile and self-organised teams in future. How can such a changeover succeed in a state-owned company?

This objective corresponds to the necessary changes. As a company, Deutsche Bahn is strongly characterised by political decisions, which is in part a different logic than that of a purely commercial enterprise. It has to align itself with politics, public service tasks and sustainability goals as well as public funding decisions. In addition, the avoidance of risks in operations plays a very important role. All of this influences how decisions can be and are made. And as in many large companies, organisational structures have developed that reflect the size and complexity of the division of labour – but also tie up a lot of resources. What does that mean in concrete terms?

A lot of people work at Deutsche Bahn, even outside of the operational areas, and they’re involved in internal processes, coordinating and

harmonising the many activities. Once a company reaches a certain size, this is perfectly normal and necessary – but it often has side effects, is not always efficient and is not necessarily geared towards the needs of customers. These structures naturally tend to maintain themselves at some point. Trying to change them meets with a lot of resistance – and this is totally rational from the perspective of the individual units.

An organisation like DB Cargo with a total of around 35,000 employees has already experienced many projects relating to change and transformation. It is a Herculean task to convince employees that this time it is not about small adjustments, but about a fundamentally different way of working and direction. Understandably, nobody simply believes it because it is written somewhere on a PowerPoint chart or in a newspaper. It only helps to really make the first steps tangible. And to be realistic. No matter what responsibility you have in such a process, you are always a long way from being able to implement it in a textbook style. You also have to make compromises and accept detours; anything else is utopian.

Interview:

That sounds like the fight against bureaucracy that is self-perpetuating ...

At first glance, that’s bureaucracy, but it’s also simply the complexity of processes: many employees are involved in countless steps comprising a process. And all steps of this process have or had an intrinsic purpose. Overall, you just have to ask yourself at some point whether a simpler way exists. But for both people and organisations, unlearning is much harder than relearning. This has nothing to do with refusal, but with the fact that these things are created and managed based on a division of labour. And in the end, the individual parts can no longer be put together to form a picture. Everyone wants to secure their own decisionmaking area in the best possible way, of course. But who can still answer the question of whether it is best for the whole in a neutral way?

And process sovereignty also always serves to maintain one’s own power. Units develop a life of their own. Hardly any large company succeeds in preventing this – or I don’t know of any. You have to deal with it wisely, despite all the adversities of real business operations.

So it’s not just public companies that are stuck like this?

No, this applies to all larger companies that have developed structures based on the division of labour. Above a certain size, usually 1,000 employees or more, similar fragmentation effects can be observed over time: everything becomes more complicated. Organisational structures follow a logic that aims to keep themselves stable and justify their existence. Many departments, once created to advance a particular organisational goal, do everything they can to maintain themselves, even if the purpose has been lost. Once something is working, it keeps going – no matter how useful it still seems in terms of the company’s purpose. Or the company’s purpose has changed over time – but routines, established processes and structures are not always realigned with it. And that’s only too understandable, because it costs an incredible amount of energy and resources each time and jeopardises stability. What’s more, large organisations, in particular, need stability in order to function. You can’t ask yourself every day why you’re doing all this. Or why you do it the same way. That’s why start-ups are fast in the beginning, because the structures allow it. But at some point,

Interview: Carola Aldag

when it becomes more efficient to have standardised processes, they also lose this momentum. It’s not a question of right and wrong, it’s more of a continuum. Only when the controller is set to ‘extremely stable’ is it difficult to shift.

The only thing that helps here is for the company to repeatedly, honestly and consistently tackle these mechanisms. If a transformation is taken seriously, then everyone has to keep asking themselves whether they are still doing the right thing and how the processes at hand can be improved. This is uncomfortable, tedious and can also be a source of conflict.

Who can renew the Deutsche Bahn’s deadlocked organisational system – who has the leverage to really change things?

No one can do this alone. Because all those who can exert influence have levers in their hands – just different ones. Such a transformation can never be achieved by a management board or external consultants alone. Employees and their employee representatives play a particularly important role. They have the power to prevent or slow down many things, but also to get involved and lead the way. Because in the end, change is decided where things are done in practice. Either the same or not –or differently. And this does not primarily take place in the boardroom. Rather, as is the case with Deutsche Bahn, for example, ‘in the ballast’ or in the scheduling of trains or personnel – or in the harbour on the quayside. We need to reach, hear and move these people with the transformation projects.

And in the case of Deutsche Bahn, of course, there are also political influences.

Will the disruptions triggered by new digital technologies such as AI also have an impact on organisations and cause movement and change there?

Ultimately, technology and labour shortages will ensure that companies can and must become leaner. This will inevitably cause organisational structures to shift in many ways. How quickly this will happen certainly depends not only on whether everyone always wants it, but also on whether and what alternatives are available. As always, it’s both an opportunity and a risk.

3.1 Demographic change and skills shortages are shifting the situation on the labour market

In addition to technological factors, the preferences of the workforce are an important driving force for organisational change leading towards more decentralised decision-making structures.38

In times of skills shortages and demographic change, competition for talented employees has intensified. According to forecasts, the ratio of young to older people will continue to shift in many countries. This is particularly true for Germany, where the group of people of working age will become significantly smaller in the coming years (see Fig. 13)

It is often said that today it is no longer young talent that applies to companies, but companies that apply to talent. The question of how a company should organise itself in terms of its culture and structure in order to be an attractive employer has come more into focus. In the best-case scenario, both should have a positive effect on employee motivation. After all, employers with a motivated workforce are generally also attractive to well-trained young talent.

Figure 13: Demographics: more older, fewer younger people

Population in millions, by age group Source: UN World Population

20 to 64 years 65 years and older

3.2 What is important for employees when choosing a job

It is not just the money that makes a job attractive. The wishes of many employees include flexibility in working hours and work locations as well as the compatibility of family and professional life, further training and the meaningfulness of work. Companies need to take this into account if they want to recruit skilled workers.

Our international survey also shows that a high proportion of respondents consider the compatibility of family and career to be particularly important when choosing a workplace (see Fig. 14). In Germany, it is even the most frequently selected as one of three important factors, in the USA the second most frequently and in Brazil the third most frequently.

The situation is different when it comes to the wish for a high salary. In Brazil, this was selected as a preference by a third of respondents – and therefore the most common preference of all. In Germany, the figure is also more than 30 per cent, which is the second-highest of all mentions. In the USA, on the other hand, high pay was named as an important factor by just 14 per cent of respondents.

There are also differences between the countries when it comes to the desire for autonomy compared to the desire for clear leadership. While 25 per cent of respondents in Germany selected a high degree of personal responsibility as desirable, only 15 per cent named clear responsibilities and clearly defined requirements as one of the three most important factors. In the USA, however, both are selected by 21 per cent. This means that there are more employees in the USA – compared to Germany – who like to be managed, while at the same time there are fewer who want to make their own decisions about their activities.

Figure 14: What workers value when choosing a job

Top-five mentions* of job preferences per country, approval ratings in %

Germany

High remuneration

High degree of personal responsibility in carrying out my tasks

Opportunity to use my skills

USA

Compatibility of family and career/work-life balance Opportunity to use my skills

Compatibility of family and career/work-life balance

Clear responsibilities and instructions of what is expected of me

High degree of personal responsibility in carrying out my tasks

Brazil

High remuneration

Opportunity

Promotion

Source: Handelsblatt Research Institute * Up to three answers could be given

MIRJA BASTIAN, Consultant for organisational development at TheDive (‘co-diver’) and at like a zebra.

‘Self-organisation is not an end in itself’

Dismantling hierarchies helps companies to become more agile and innovative. However, in the experience of the management consultant, this process cannot be imposed from above alone, but must be supported and driven forward by the teams. The goal is more autonomy within canalising organisational structures. To this end, company management should above all define strategies and objectives.

What drives companies to transform their organisational structures and focus on more self-organisation?

Self-organisation is not an end in itself, but has a goal: companies want to and can become more agile. Agility is an important prerequisite for dealing with uncertainty and complexity. This has good prospects of success at the level of individual teams.

Which ones exactly?

Self-organisation works very well in environments in which it’s necessary to be creative, innovative and adaptable. These are often the customer-oriented operating units that deal with product development. However, this does not apply to safety-oriented operating units, where risk minimisation and standardisation play an important role. Much more hierarchy and leadership is needed there.

Complete self-organisation in itself always remains a kind of utopia, an ideal that cannot be implemented equally in all areas. If management decides to introduce self-organisation from above, this is usually doomed to failure. However, if there is a differentiated discussion about the areas in which self-organisation can be effective in order to strengthen adaptability, then self-organisation is a very good tool. It makes work easier for all teams if they get to know and apply the principles of selforganisation.

Interview: Mirja Bastian

However, organisational sociologists say that a transformation towards agile structures can only succeed if strong leadership is able to enforce it. And the Chinese household appliance manufacturer Haier, which is repeatedly cited as a successful example of a decentrally organised industrial company, also has very strong leadership that is even anchored in the Communist Party ...

I would advise any company management not to impose the new decentralised structure from above. The management should communicate its vision and describe exactly where it wants to take the organisation. But then it should give the teams the responsibility to develop their own rules and structures.

At one large company, for example, I experienced how top-down planning failed. The management there had decided to restructure everything in a self-organised way. They did not involve the workforce in how the individual departments would work in a self-organised way. This met with massive resistance from the employees, who put on the brakes. Above all, they accused the management of not involving them in the design of the selforganisation. From the employees’ point of view, this was in itself a violation against the principle of self-organisation.

But isn’t it positive for all employees when they are freed from bureaucracy and hierarchies?

Some people need more structures, processes and guidance from the top. It cannot be a question of abolishing managers overnight and letting the entire organisation run itself. That would be an abandonment.

A team-based approach works better, which brings team after team to develop a suitable operating model for themselves. This can be hierarchical; there can also be leadership roles within the team. However, the team can also decide to only set up functions, not specific roles, as is typically the case in self-organisation.

Interview: Mirja Bastian

If the teams give themselves a decisionmaking structure, then some teams are hierarchically structured, others are selforganised. How do they coordinate and communicate with each other?

The different operating models should not really disrupt communication between the departments.

In order to identify which corporate culture prevails in the departments, we describe the various cultural dimensions with specific colours, based on the organisational theorist Frédéric Laloux, in order to establish a common language for the team culture and make it possible to discuss cultural patterns. For example, we lable those cultures within the company that are very power-oriented and assertive as red. On the other side of the spectrum is ‘teal’, the blue-green organisation that works in an agile, user-oriented and effectivenessoriented way. In between are other structures such as orange, which stands for performance orientation, and green for value orientation.

In every organisation, we first ask the employees how they classify their culture. And this regularly results in a very heterogeneous picture. Some companies strive to be green or teal. But there are always areas in their organisation that are determined by other patterns of behaviour. And rightly so. For example, red works well in crises such as the coronavirus pandemic. This requires an operational model in which someone specifies what needs to be done quickly.

What’s special about your Loop

Approach?

It’s a methodological toolkit that enables teams to transform themselves from the inside out. This is the idea of self-organisation. The methods are based on various schools of thought. Rolebased working, for example, in which roles can also change, comes from holacracy. The view of cultural change and the evolution of the organisation comes from Spiral Dynamics. The central question for everyone is always: what do you need to be more effective? With the Loop Approach, the teams develop their own clear set of rules and structures within which the team can then work autonomously.

Interview: Mirja Bastian

When conflicts arise, companies usually employ coaches who have undergone further training in non-violent communication. They try to find out what the needs of the individual team members are on a personal level of communication and can resolve blockages and conflicts in this way.

That sounds like a lot of effort, a lot of training and, in the end, no standardised structure ... Self-organisation provides certain guidelines that give teams orientation and structure during development. These include special meeting formats for coordination and decision-making, which are moderated by team members. Step by step, the teams develop a common language and establish new self-organised cultural patterns that have an impact beyond the department. Without these guidelines, the path to self-organisation would be a bit of a mess. The Loop Approach familiarises the teams with low-threshold formats.

The training for this is not too elaborate. With the Loop Fellow training, we train internal coaches to accompany team processes into self-organisation. This is because one principle of agility is that teams often take on coaching roles themselves. And these coaches support the teams with their everyday issues. The coaches act as multipliers in the organisation, communicating the principles of selforganisation. This means that not every employee needs to undergo intensive training.

Above all, the mindset has to change. And sometimes simple questions are enough to achieve this. For example, when we first talk to the management team that is currently being formed and wants to transform the organisational structure, we always ask the key question for self-organisation: What do you need? Addressing this enables everyone to recognise their needs and make a proposal for change. This helps with strategising, tensions, conflicts and in every project.

How do companies undergoing decentralised transformation deal with employees who are unfamiliar with the idea of self-organised work? Not all employees for whom a hierarchical model works can cope with self-organisation. To do this, people need good self-contact and psychological security. In teams with whom we start this work, we often find that employees are inhibited from taking responsibility – even responsibility for their own needs. Many don’t even think of saying ‘I need something’. They may have been sent away too often and have been told that it’s not about their needs, but only about the interests of the investors or the goals of the company. That’s why they first have to learn this culture of psychological safety, which also includes a culture of error. Because in self-organisation, mistakes can be made and there is a solution-oriented and benevolent culture, even when conflicts arise.

3.3

What matters for job satisfaction

Holistic organisations perform better

In order to keep qualified employees in the company, it is crucial that they are satisfied with their working environment. The survey of employees aged 18 and over in Germany, the USA and Brazil shows that the organisational model has an influence on job satisfaction. Employees in organisations with characteristics of the holistic type tend to be more satisfied and less dissatisfied with their work compared to employees in Tayloristic companies (see Fig. 15). These two types of organisation were described in the context of Fig. 4 above (see p. 14) using the two dimensions of degree of hierarchy and degree of authority.

Figure 15: Job satisfaction is higher in holistic organisations Proportion of workers in the respective organisational forms*, in %

‘Overall, I am satisfied with my job’

Source: Handelsblatt Research Institute

Workers appreciate being treated like internal entrepreneurs In order to promote innovation, employees should become internal entrepreneurs (‘intrapreneurs’) as part of the decentralised transformation.39 In holistic organisations, they are actively involved in solving problems, can contribute their creativity and, above all, should contribute to continuous product improvements through greater customer contact.

Figure 16: Employees are more satisfied when their personal initiative and creativity are called for Share of employees, in %

Satisfied** with the job

No answer

Not satisfied*** with the job

‘Personal initiative, proactive behaviour and new ideas are desired and rewarded.’

Workplace satisfation* of those who...

...agree** with the statement

...agree** with the statement

...agree** with the statement

* Reaction to the statement ‘Overall, I am satisfied with my job.’

** ‘Fully agree' or ‘somewhat agree *** ‘Rather disagree' or ‘fully disagree’

Source: Handelsblatt Research Institute

The survey shows that employees appreciate this: in companies where the workforce is encouraged to take initiative and adopt a proactive behaviour, there are significantly more employees who are satisfied with their job (see Fig. 16)

For this result, the survey participants were not asked directly which workplace characteristics they would like to have. Instead, they were first confronted with statements about their working environment that they could agree or disagree with. In the next step, a cross-evaluation was used to determine how employees answered the question about their general job satisfaction if they found certain characteristics in their working environment – or if these did not apply to them.

The analysis shows that respondents who are particularly satisfied with their workplace are those who can work autonomously, who feel a sense of self-efficacy and in whose company a culture of communication at eye level is practised, where innovations are welcome. The proportion of those who are generally satisfied with their workplace is often 20 or more percentage points higher in these groups (see Fig. 17). This applies to all countries analysed, meaning that there are no fundamental cultural differences between Germany, the USA or Brazil.

These results provide evidence that holistic structures and corporate cultures not only increase the innovative capacity and agility of companies, but can also promote employee satisfaction and motivation. For companies that rely on a committed and creative workforce, in particular, a corresponding organisational change can hence be a promising strategy for attracting and retaining qualified specialists: focusing on fewer hierarchies and control and instead strengthening independence and personal responsibility by shifting decision-making competencies from management level to the teams.

Figure 17: Factors that increase job satisfaction

Share of those who are satisfied with their job* (depending on whether they agree or disagree with the statement made), in %

Agree** Disagree***

Self-efficacy and identification

‘I have the feeling that my opinion counts.’

‘I identify with the purpose of my company/ organization.’

Autonomy and responsibility

‘I am responsible for my work and receive immediate feedback on success or failure.’

‘I can decide for myself the order in which I complete my tasks.’

Openness to innovation and customer orientation

‘Innovations are valued, even if they fail.’

‘ We are encouraged to seek contact with customers in order to get as close as possible to their needs.’

* Those who ‘fully agree’ or ‘somewhat agree’ with the statement ‘Overall, I am satisfied with my job.’

** ‘Fully agree’ or ‘somewhat agree’

*** ‘Rather disagree’ or 'fully disagree’

Source: Handelsblatt Research Institute

3.4 Employee motivation becomes a key factor for corporate success

Employee motivation plays a major role in the knowledge-based world of work. The extent to which employees contribute to the company’s success depends not only on the fact that they carry out clearly defined activities, but above all on how they fulfil their tasks. This is all the truer in a holistic working environment that emphasises multitasking, initiative and personal responsibility.

Traditional organisations rely primarily on extrinsic incentives. These include performance appraisals by managers, performance-related pay and opportunities for promotion within the company hierarchy.40 For companies operating in in a dynamic competitive environment, creativity also comes into focus. This is because they rely on the inventiveness of their employees to create new products and processes. This requires a high degree of intrinsic motivation.

The central question is therefore which factors have a positive effect on employee motivation. It is known from behavioural economics that it is important to create the feeling of ‘being rewarded’.41 Studies show that a variety of very different incentives can be considered for this purpose, all of which can generate positive impulses in the brain. These include monetary incentives such as bonus payments as well as feelings of belonging or meaningfulness.

Monetary incentives and promises of promotion are no longer enough

In response to the findings of behavioural economics, incentive structures aimed at promoting intrinsic motivation have also emerged in management literature in recent years.42 These include, for example, friendly relationships with colleagues, the feeling of being appreciated and contributing to the company’s purpose, the opportunity to work creatively and the social meaningfulness of one’s own actions.43

Behavioural research has shown that these factors are also perceived as rewards – and that they have a more lasting effect than traditional monetary incentives. Conversely, evidence has been found on how detrimental it is when the corresponding sensations are absent. Accordingly, workers can become paralysed and frustrated if the meaning of their own work is doubted or if they experience a feeling of replaceability.44 Money is necessary, but not sufficient.

The fact that, in addition to extrinsic incentives, there are a host of other factors that have at least as much of a motivational effect is also confirmed by the employee survey conducted for this study: according to the respondents, personal achievement, appreciation, collegiality and a sense of purpose strengthen their motivation to perform (see Fig. 18).

Differences between the countries analysed can certainly be seen. For example, appreciation from superiors is mentioned most frequently in Germany, while in the USA and Brazil it is more likely to be the feeling of doing a good job. Otherwise, however, the results are similar.

Case: Upstalsboom

As with many successful examples of decentralised organisational structures, Upstalsboom’s transformation began with a strong leader and a corporate crisis: Bodo Janssen, second-generation CEO, took over the northern German hotel and holiday resort chain unexpectedly early on from his father, who had died in a plane crash. He initially paid particular attention to the figures – until a scathing testimony in an employee survey in 2010 made him realise that it was the human side of the organisation that counted most. Especially in an industry with direct customer contact.

Janssen learned his lesson from the harsh criticism of his ‘aloof managerial manner’ and went to a Benedictine monastery, where he met Father Anselm Grün and developed a new style of leadership and running the organisation. Since then, mindfulness and a sense of purpose in work have been key to making employees and therefore the company more efficient and creative. With the support of management consultant Oliver Haas (‘Corporate Happiness’), Janssen implemented a corporate culture that focuses on everyone’s happiness. Socalled ‘happiness officers’ (‘Happiness Beauftragte’) support employees, while managers see themselves as service providers. And even those employees who are not interested in the company’s ‘value tree’ with its 12 values and 32 meaningful theses, as well as the mindfulness and monastery retreats on offer, are respected within the company.

Meaningfulness is honoured by employees and guests

The result: employees are less ill than before and more satisfied than is usual in the industry (Kununu rating: 4.2 instead of 3.4 points). The chain has now grown to 70 hotels and holiday resorts. Janssen has written books about the ‘Upstalsboom way’, some of them together with his mentor Anselm Grün. The documentary film ‘Die stille Revolution’ (the silent revolution) also focuses on the development of the hotel chain. Janssen has since transferred the family business into a foundation in which the employees decide on charitable causes.

Meaningful work from the perspective of an organisational consultant: Maik Puk, co-founder of the consultancy 99rabbits, worked for a few days in an Upstalsboom hotel himself and gathered first-hand impressions. For example, he liked an idea that did not come from the management, but from the employees at the grassroots level: in order to save on staff, each guest can decide for themselves whether their room is cleaned. The hotel employees want to make a contribution to the environment and, at the same time, use the time saved for services that they prefer to do – and which ultimately benefit the guests. Puk’s verdict in his interview with the Handelsblatt Research Institute: ‘This increases the meaningfulness of the work. As this approach is based on the intrinsic motivation of employees, the organisation achieves a level of efficiency that cannot be achieved with orders from above!’ And fairness is also taken into account: when the hoover is used, everyone has to pitch in – whether restaurant manager, shift supervisor or trainee.

UPSTALSBOOM

IN BRIEF:

DR JUDITH MUSTER, Organisational Consultant at Metaplan and Sociologist at the Chair of Organisational and Administrative Sociology at the University of Potsdam.

‘The examples given by management gurus have little to do with reality’

According to the organisational sociologist, agile models cannot be implemented in pure form in traditional companies. This is because the inherent logic of their organisation stands in the way. Informal structures, in particular, play a decisive role.

Many established German companies have been sailing in calm waters for a long time. Now, in turbulent times, they are realising that their ability to innovate is waning and that they cannot react quickly enough to crises. Is this the time to initiate a fundamental organisational change?

Organisations have always had to react to changes in the environment, whether these are market changes or technological upheavals – currently digitalisation, for example. And organisations are inherently hostile to innovation, because they always structure themselves in such a way that they do not have to react to every environmental change on a permanent basis. As a result, organisation and innovation are unfortunately a contradiction in terms, even if this is presented differently in management lyricism.

Is it a path to success for companies to organise themselves more decentrally and abolish hierarchical levels?

Each individual organisation must find a specific solution to this question. The narrative in the organisational world that hierarchies are per se hostile to innovation or even stop innovation is not correct. From the perspective of organisational sociology, innovation only occurs when something is done differently from what the organisation has structurally planned so far. Whether these are new business models, new processes or organisational models.

One method of enabling innovation is hierarchy. This is because hierarchy is capable of making tactless decisions. Superiors are not dependent on respect and are therefore able to make unpopular decisions. And it may be that innovations are uncomfortable and need to be powerfully supported by the hierarchy. A well-functioning hierarchy can therefore definitely help with innovations. The narrative that hierarchy is synonymous with less innovation is not true.

Interview: Dr Judith Muster

Interview: Dr Judith Muster

So is a transformation of the organisation necessary to get an encrusted organisation up and running again?

Yes. Organisations structure themselves formally, with rules, strategies, processes, KPIs, hierarchies, organisational charts and the like. But informal expectation structures have just as strong an effect: for example, short official channels and all the small ‘useful illegalities’ of the organisation, as the sociologist Niklas Luhmann calls them. These networks, cliques, this bartering and everything that makes the organisation work despite the good rules cannot simply be eliminated. After all, they were not consciously created; they have simply settled in.

Change can only start with the actual behaviour in organisations. If I shape the formal conditions, then I also create other behavioural expectations. The conditions ultimately determine the behaviour. Does this mean that the idea of transformation from within – that is, from the bottom up – is a great utopia?

The impetus for transformation, wherever it comes from, must be powerfully supported. This is because it usually involves decisions about the formal structure that can only be made by someone with a mandate to shape the organisation.

achievement. So how should we act now? These organisations often experiment with introducing something like holacracy in various forms, like dismantling hierarchies. As a result, however, the agile roles have to be negotiated and defined in detail with the works council, which completely contradicts this organisational model.

Agile models such as holacracy, micro-entrepreneurship and self-organisation have been around since the 1960s, with ever-changing signs. And in my research, I have never seen them lead to structures in large bureaucratic organisations that somehow still correspond to these models. They are adapted to the rest of the organisation, even if this is usually presented differently to the outside world. This can be called organised hypocrisy. So decentralised models are not a solution for this type of organisation.

The often-cited example of a Chinese stateowned company in which a current CC member has created a structure from above in which the individual employees feel like small entrepreneurs and can work together successfully and innovatively fits in with this. Can this successful model be transferred to Germany?

I have the feeling that all these models that are described in management bestsellers have relatively little to do with empirical research on organisations. What’s more, the problems that result from this type of organisation are simply ignored.

We first have to start from the structures that have grown naturally. Take, for example, a former state-owned company with a high proportion of civil servants or a corporation with strong co-determination – which, in fact, is also seen as a social

Organisations are always embedded in a social structure, in collective bargaining and the like. Is it therefore possible to transfer models that work in Chinese state-owned companies to other markets?

Of course, there are also medium-sized companies in this country that can decide on everything and structure themselves in an agile or highly selforganised manner.

But in traditional technology companies, there is usually little left of the agile models. This naturally raises the question of why they were introduced in the first place. There are various reasons for this. In some organisations, they actually want to reduce staff and initially use the agile models to demonstrate efficiency gains and do the maths. Other organisations actually want to achieve something good, but then come up against the edges of the agile islands and realise that self-organisation does not work in practice. Because even if a department has abolished all hierarchies and roles, the neighbouring department, for example, still finds out who has the highest rank via the SAP system and contacts this person. This means that managers are still treated as a hierarchy, even if they say there are no hierarchies.

This simply happens with every management trend.

Various trends alternate in management theory. Are we currently in a phase in which more decentralisation is being propagated or more hierarchy?

These fashions come in waves. I have the impression that we’ve now had a very strong phase of self-organisation, agility and so on. And now we are back in the phase in which I am increasingly hearing that centralisation and hierarchies are being relied on, at least in my consulting mandates. However, I cannot empirically substantiate this personal impression.

But the fashions also have a function for the organisations. They can be used tactically when the organisation ages again, when it gets out of shape. They can then be used again to move things along the new structures ...

But what makes companies more innovative and efficient?

Unfortunately, it’s not as easy as in the management bestsellers. As a sociologist, I have to disappoint you. The organisation – in its wildness and its own logic – is a kind of blind spot for transformation projects. Even companies that want to succeed with the help of technology fail. Digital transformations also fail, for instance, because of the organisation’s own logic and hostility to transformation. And this is not due to the pathology of a particular organisation, but it’s simply the very nature of organisation.

Good management can only solve this by constantly taking a close look at the organisation, both formally and informally. If something gets stuck, it must be made fluid. Above all, you have to look at the informal side of the organisation, the ‘wild life’ underneath the formal structure, if you want to know what agility is and where innovations come from. Because this is where smart people are at work who want to do good work despite the many rules. Nevertheless, this is also where you find the biggest inhibitors of change.

Interview: Dr Judith Muster

But what do I do if something has become informally entrenched due to social pressures that hinders desirable developments and possibly even poisons the general working atmosphere?

As a sociologist, I assume that it is not individuals who are evil and toxic, but that there is a conflict of objectives in the organisation that has not been resolved, for example. Or that formal and informal structures are at odds with each other. Or that there is a lack of defined space in which certain issues are dealt with. And I look at the formal structural level to see what I can change so that the detrimental behaviour is no longer worthwhile at some point. So, according to Luhmann, we analyse functionally how the organisation can be redesigned so that the toxic behaviour is no longer necessary. I probably can't go into this with a preconceived idea. Do I have to listen in detail to what the microstructures look like, how they were created, and on this basis consider how I can change them?

Right, I have to listen to that very carefully. The discourse strategy must be sensitive to micropolitics, meaning it must take into account that strategic players in the organisation are not allowed to know or cannot know many things. Things have to be made discussable without the ‘organisation’s immune system’ reacting defensively.

Challenges in organisational change 4

Not only must the desired results of organisational change be considered, but also the way to get there. Even if companies strive for a certain organisational model because they have identified it as beneficial for their purposes, it does not follow that the transformation process will necessarily succeed. This chapter therefore looks at how organisations can shape decentralised change and foster a creative environment.

4.1 Between willingness to change and

transformation fatigue

Resistance coming from the workforce is often cited as the main reason for the failure of agile transformation projects. This picture is also conveyed by a recent international survey conducted by the technology company Digital.ai with almost 800 participants, most of whom were agile coaches, Scrum masters, project managers, consultants and trainers (see Fig. 19). This makes it all the more important for companies to involve their employees in the reorganisation right from the start and to convince them of their plans.

Figure 19: What hinders the change towards more agility Global company survey, responses in %

General organizational resistance to change/culture clash

Not enough leadership participation

Business teams not understanding what agile does and/or can do

Insufficient training and/or education

Inadequate management support and/or sponsorship 47 38 41 37 27

Source: Digital.ai45

The employees in our survey are generally open to change. In Germany and the USA, in particular, a large majority stated that they look forward to new challenges at work. However, a country comparison shows a mixed picture in terms of willingness to change, as many employees particularly in Brazil and the USA also feel overwhelmed by the numerous changes they are confronted with (see Fig.20)

In fact, it is striking that far fewer workers in Germany feel overwhelmed by change in the workplace than in the USA and – above all – in Brazil. However, there is no major industrial company in Germany that has successfully undergone such a radical corporate transformation as the Chinese household appliance manufacturer Haier, for example. In Germany, organisational change in industry has so far been slower than in the USA or China, as transformation expert Janosch Stolle notes (see interview with Janosch Stolle on pp. 74 f.)

Figure 20: A majority sees change as positive, but there are also excessive demands Answers in %

‘I am happy when I am given new tasks now and then and can hand over old ones.’

‘I feel overwhelmed by the many changes at work.’

‘I like trying out new organizational methods and types of collaboration in order to make coordination processes more effective.’

‘I enjoy continuing my education to keep my qualifications up to date.’

Source: Handelsblatt Research Institute Fully agree   Somewhat agree   Don't know/no answer Rather disagree Fully disagree

4.2 Employees must be empowered for self-organisation and decentralised coordination

Promote intrinsic motivation

For the holistic transformation to succeed, it is not enough to simply change the formal structures and rules according to which companies work. Personal factors of employees such as initiative, loyalty and identification with the company’s goals must also be added. If employees are to act like internal entrepreneurs (‘intrapreneurs’), this is largely based on their intrinsic motivation.

Current management guides suggest that employees only need to be freed from the shackles of bureaucracy and will then automatically utilise their creativity and feel like product owners because it is in their nature.46 However, this ignores the crucial question of how intrinsic motivation can be (re-)awakened if it was previously not required in a hierarchically managed company.

The Swiss economist Bruno Frey has pointed out that extrinsic performance incentives and an authoritarian management style can undermine intrinsic motivation.47 In this context, he speaks of ‘motivational crowding-out’. Financial reward systems and external performance controls by superiors may therefore have a counterproductive effect: employees react by making even less effort to fulfil their tasks and only doing what is explicitly required.48

The management style must therefore be geared towards ensuring that self-determination and selfesteem are not impaired by external controls. The more personal the relationships between management and team members are, the more interesting they often find certain activities and the greater their opportunities to participate.49 In order to regain lost intrinsic motivation (‘crowding-in’), what is required, above all, is time.

Reorganisation of work requires different qualifications

Motivation must be accompanied by the necessary skills. This is because the change in work towards holistic forms of organisation is also changing the qualification requirements for the workforce.50 Organisational and technological change processes are mutually dependent: the shift towards more interesting mixed workplaces with more responsibility is broadening the number of tasks required for the job. In addition, the use of artificial intelligence and machine learning is eliminating automatable tasks, while non-automatable tasks are being added or prioritised more than before. Employees must be empowered through suitable professional training measures (see interview with Konstanze Schlegelberger on pp. 64 f.)

While the middle qualification level, which was sufficient for routine activities, is becoming less important, the demand for highly qualified specialists is growing.51 Studies suggest that the gap between the winners and losers of the transition to Industry 4.0 will widen. On the one hand, advancing digitalisation will replace workers who perform rule-based activities – be they manual (such as loading machines, transporting goods, packaging) or cognitive (such as simple data acquisition and processing, backoffice functions). On the other hand, it will support workers in solving non-standardised problems and processing complex communication tasks.52

Many empirical studies show that this process is already in full swing:53 the requirements profile of the average job is changing – away from simple and repetitive tasks and towards complex, multidimensional activities (see Fig. 21)

Figure 21: Future of work: skill requirements are shifting Forecast of working time distribution (USA and Europe) across different tasks, in %

Source: McKinsey Global Institute 54 Use

The transformation towards a more decentralised organisation may shield workers from the redundancy caused by automation. This is because the skills that are required in a holistic work organisation – creativity, entrepreneurial thinking, initiative, knowledge transfer, customer orientation – are difficult to replace with artificial intelligence. Accordingly, in our survey, the risk of replacement is assessed higher in Tayloristic organisations (see Fig. 22). This is primarily due to the authority dimension: The fear of being displaced by digital technology is significantly greater among workers with jobs that are strongly bound by instructions.

Credible commitment: top-level management must set an example for change

For Janosch Stolle and other management experts, the transformation is first and foremost a leadership issue: ‘Top management must pursue it with a strong drive and prove to be assertive,’ he says in the interview. Managers can achieve a lot through their function as role models, especially in large corporations if they exemplify the desired agile behaviour and, for example, refrain from bureaucracy and authoritarian behaviour themselves (see interview with Janosch Stolle on pp. 74 ff.; see also interviews with Judith Muster on pp. 53 ff. as well as Hanns-Christian Mahler and Felicia Werk on pp. 24 ff.)

Figure 22: Influence of work organisation on the perceived risk of replacement by digital technologies

Agreement* with the statement in the respective organisational forms**, in %

* ‘Fully agree' or 'somewhat agree’ ** Holistic: hierarchy and authority level 1 to 2; Tayloristic: hierarchy and authority

Source: Handelsblatt Research Institute

Companies that want to transform themselves need to establish credibility (see interview with Antoinette Weibel on pp. 68 ff.). This is because they are dependent on the cooperation of their employees: they also have to embrace new processes and invest in the relevant qualifications. From an economic point of view, the necessary credibility is created by companies depositing a sufficiently large ‘pledge’ in the form of irreversible investments.55

By contrast, pure declarations of intent can be perceived as ‘cheap talk’ that is not associated with any economic consequences. In this case, employees will find it difficult to go the extra mile and drive change forward on their own initiative.56 Only when companies have committed themselves to their transformation project through irreversible investments do they really have something to lose if they do not follow up their announcements with action or later reverse the course they have taken.

Larger companies with a long tradition, in particular, have often already undergone various reorganisations, which may have involved redundancies for employees – and which may even have resulted in nothing after a few years since they were not pursued by top management. It is therefore important that management communicates the intentions and consequences of the transformation in a clear and honest manner: ‘Employees don’t leave the company because the CEO communicates too much, but because he explains too little,’ Hans Rusinek, HR researcher and author (‘Work Survive Balance’) told the Handelsblatt Research Institute.

If top management does not credibly exemplify the change towards fewer hierarchies and more personal responsibility, the mood of employees will quickly change. In our interview, Swiss management professor Antoinette Weibel refers to the example of the Novartis Group, which turned the tide three years after announcing a comprehensive decentralised transformation (see interview with Antoinette Weibel on pp. 68 ff.). She warns that employees will build up resistance if they do not feel they are being treated honestly (see Novartis case)

Case: Novartis Announcements are not enough for employees

It was supposed to be a farewell to authoritarian hierarchical thinking, and the title was appropriately bold: ‘Unboss programme’. In 2019, the head of the Swiss pharmaceutical company Novartis, Vas Narasimhan, euphorically launched his promising restructuring programme to make the firm more innovative and agile. The CEO described his mission as empowering employees to maximise their own responsibility and ‘reinvent medicine together’. The organisation was to become value-driven (‘purpose before profit’), more permeable and more open. The old fear and

control structure was to be replaced by the principle of self-determination. The scores in employee surveys rose. However, the reorganisation also led to weak decision-making and a lack of performance control.

Just three years later, Narasimhan no longer mentioned ‘unbossing’ in stock market presentations. The head of HR, the driving force behind the implementation of the programme, left in the summer of 2021, and savings and redundancy programmes followed.57

DR KONSTANZE SCHLEGELBERGER, Head of Corporate Development, Deutsche Rentenversicherung Bund

‘Organisational change and digital transformation have to go hand in hand’

Public companies are under pressure to become more agile – even without competition. This is not least due to demographic change and labour shortages. Digital technologies help reduce bureaucracy. For organisational change to succeed, it must be made comprehensible for employees.

Reducing bureaucracy and hierarchies are keywords that many companies – including insurance companies – are currently using to make their organisation more agile and innovative. What does this mean for a public company like Deutsche Rentenversicherung Bund?

De-bureaucratisation and more efficient processes are also a big issue for us. However, there is no single solution; for instance, operational processes cannot be entirely trimmed to selforganisation. Reducing hierarchies is not the main issue for us; instead, the individual departments, some of which are as large as mediumsized companies, need to be brought together in a collaborative way. To jointly utilise the major transformation levers and to jointly think about the strategic direction. Deutsche Rentenversicherung Bund has 26,000 employees who can only be managed with a certain degree of hierarchy. We therefore need to develop the structures intelligently in order to promote permeability while maintaining the necessary structure.

What are the challenges in this respect?

Due to their internal socialisation, our employees are primarily focused on accuracy, safety and compliance with the law. Behind what is perceived as ‘service by the book’, there is also a great striving for reliability and providing the best service for the insured, for which a framework and clear guidelines seem helpful. However, this stands in the way of reducing bureaucracy and streamlining processes in many respects. And this will be necessary to ensure our ability to work.

Changing the processes, completely reorganising them, is a quantum leap that needs to be practised. Up to now, the tendency has been to create new bureaucracy elsewhere when reducing bureaucracy.

What is driving the transformation?

We may not have competition in the true sense of the word, but we have to think more economically, especially because we are struggling with labour shortage. Recruiting new clerks is currently very difficult. We have already expanded our training

of junior staff to the limit and, as part of the transformation, we are also considering how we need to shape the workplace so that our jobs are attractive in the future. How can employees be encouraged to take part in this transformation task?

The changes that we initiate are associated with effort for employees. They have to break away from familiar routines and manage a large volume of work while the change is taking place. These are high demands.

So we definitely want to create trust in the changes. We achieve this not only through transparency –but, above all, through comprehensibility. It has proven to be a good idea to make our dual demographic challenge clear to our employees: due to the increasing number of pensioners, our workload is growing. At the same time, we have fewer and fewer employees because we are facing a generational change. In order to manage this squaring of the circle, we need to transform our organisation and exploit potentials that contribute to effectiveness, efficiency and quality assurance.

The agile transformation is thus about organising away superfluous work in order to manage a larger volume of work with a smaller workforce ... Automation and digitalisation are vital to meeting this challenge, but must be considered together with cultural and organisational change: these two transformation processes must go hand in hand. We need to identify the processes in which technology can relieve our workload and, where possible, also improve quality. At the same time, we need specialised human knowledge for those cases that cannot be easily automated. Organisational development is faced with the great task of incorporating the various strands in a meaningful way – from new processes and competence profiles to the organisation of leadership and the establishment of new technologies.

We have a separate operating unit that deals with digital strategy and identifies how AI and other digital processes can be utilised. If we put these technologies to use, our ‘production’ will, in the best-case scenario, be able to work easier and

Interview: Dr Konstanze Schlegelberger

better than it does today. And we need to adapt our organisation to this. The pension system is also evolving; the German government's reform proposals (‘Rentenpaket I’) have just been published. As a federal authority, we need to see what changes are necessary in operational implementation in order to be able to realise legislative changes. After all, the focus of course is on fulfilling our public mandate.

To what extent is digitalisation changing the skills required of employees?

When recurring routine processes are automated, the task profile of employees also changes and their extensive expertise becomes more important, particularly in specialised cases. For this reason, it is important to use digitalisation to relieve the burden on employees. However, this cannot be achieved purely through digitalisation; it also requires changed structures or a different form of work organisation, which can also change the demands on employees’ skills.

At the moment, for instance, some 70,000 documents arrive daily, which are scanned by a separate unit. The long-term goal is to work with significantly fewer physical documents and to increasingly rely on online or digital means. This will also change the tasks and requirements for different groups of employees. We need to plan for these changes accordingly.

Can employees who are redundant as a result of digitalisation and who have been performing routine tasks up to now switch to jobs with more responsibility? For instance, through reskilling?

Partly. Reskilling is undoubtedly required. But we also have to focus on certain knowledge that is already available. In other words, we will also summarise processes in the new workflows. So specialised knowledge and experience in the application of the law will continue to be important. Empowering employees with methodological skills in terms of digital working methods is certainly one approach to systematic training that we need.

4.3

Organisational obstacles must be overcome

With every organisational change, there are also losers who have to give up responsibilities and established roles. This involves both actual losses and perceived losses. For example, a reorganisation of one’s own field of activity can be perceived as a loss of prestige or as a questioning of previous achievements for the company. As the aim of the transformation is to reduce the level of control and hierarchy in the company and give the teams more personal responsibility, middle management is often particularly affected.

Companies must expect resistance and inertia

Especially at middle management level, there are often similar incentives in traditional hierarchies to increase the size of the department and the allocated budget beyond the efficient level for reasons of prestige, as those known from economic bureaucracy theory.58 This is because the internal status of a management role usually depends on the number of employees who report to it. For this reason, there may be a tendency to hire additional administrative staff and to seek additional administrative tasks for them.

In his pamphlet on ‘Bullshit Jobs’, the US anthropologist David Graeber argues that many managers are under pressure to justify the existence of their position – and therefore create tasks in the area of management and control that are not even necessary.59

‘Many departments, once created, do everything they can to maintain themselves, even if they have lost their purpose,’ says transformation expert Carola Aldag, describing this phenomenon in her interview with the Handelsblatt Research Institute. In her experience, all larger organisations automatically develop inefficient structures ‘in which a lot of people deal with internal processes’ (see interview with Carola Aldag on pp. 38 f.). The employees do not work for the customer or for the purpose of the company, only for self-administration.

Even start-ups are not immune to this. Bastian Wilhelms, co-founder of telecommunications service provider Sipgate, for example, describes how the young company hired many managers in the first growth phase ‘to distribute the work better, as if it were a matter of optimising the handover points.’ Today, he describes these management tasks as ‘unproductive auxiliary work’ (see interview with Bastian Wilhelms on pp. 32 ff.). As a result, bureaucracy often has an inherent tendency to expand and keep itself alive.

Transformation must also have an impact on informal organisational structures

Reorganisation can only start with the formal organisational rules. However, informal structures, networks, cliques and bartering, which are not recognisable in any organisational chart, are usually at least as important for cooperation in companies.

On the one hand, these informal structures can make many things possible via ‘bypassing the official rules’ – if you know who to contact in order to be able to act flexibly. On the other hand, however, this is also where the biggest obstacles to change are to be found. For example, Carola Aldag describes in the interview how changes at Deutsche Bahn are ‘not primarily decided in the boardroom’, but ‘where things are done in practice’. If there is a lack of willingness to cooperate at the grassroots level, this can paralyse the entire business.

Although the informal structures therefore determine the behaviour in organisations to a large extent, they cannot be targeted directly during a transformation. It is therefore important to transform the formal structures in such a way that the obstructive behaviour is no longer worthwhile for the informal structures in the background. In this context, organisational sociologist Judith Muster speaks of ‘precise organising’: you have to penetrate the microstructure and make everything ‘discussable’ (see interview with Judith Muster on pp. 53 ff.)

Social institutions must be taken into account

In addition to internal factors that influence organisational change, there is also an interdependence between the organisational structures and the institutional framework in which they are embedded. For this reason, best-practice examples from other countries cannot usually be transferred in mirror image to a company’s own organisational transformation.

For example, there are major differences between the USA and Europe in terms of labour market institutions. In this context, the economic theorists Assar Lindbeck and Dennis Snower (2001) show that uniform wages linked to specific jobs, as is common in countries with centralised wage negotiations between trade unions and employers’ associations, can stand in the way of efficient holistic workplace organisation. This is because collectively agreed wages can only be adapted imperfectly to the specific conditions and requirements that exist locally. On the one hand, this restricts the ability of self-organised teams to provide their members with financial incentives to carry out the various tasks efficiently –both in terms of the composition and the intensity of the activities. On the other hand, the learning and training incentives required for multitasking cannot be precisely controlled.

Management consultant Janosch Stolle attributes the lack of successful examples of far-reaching organisational change in established industrial companies to the ‘dominance of traditional structures in Germany’ and ‘a pronounced culture of co-determination’. ‘We are exchanging perceived security for rapid adaptability and flexibility,’ he says, summarising his experiences (see interview with Janosch Stolle on pp. 74 f.)

PROFESSOR DR ANTOINETTE WEIBEL,

Professor of Human Resource Management, University of St. Gallen, Director of the Institute for Work and Employment Research, Co-Founder of the ‘goodorganisations.com’ platform.

‘Not everyone can automatically lead better or make free decisions’

Intrinsic motivation and creativity do not develop on their own. Companies that want to improve their organisation must first invest in transparency and staff development. Trust, above all, can only be built in the long term.

Many established companies have sailed well in calm waters for a long time, but have become rusty and are now realising that they lack the necessary resilience faced with today’s multiple crises. They have also lost their creativity and ability to innovate. Do they need to change their organisation?

In traditional companies, the starting point is usually a Tayloristic organisational system. Changing these structures and the view of persons that is entrenched in them is usually the best way to get things moving in a company!

Following Tom Burns and George Stalker, I would like to call the other pole ‘organic organisation’, which is based on agility and the ability to innovate and works with self-organisation. This also includes various forms of organisation that can be described with the keywords ‘value rationality’ or ‘purpose driven’.

An Ideal-type distinction is made between the Tayloristic, hierarchical organisation and the holistic, decentralised organisation. Is there anything in between?

I would distinguish between three ideal types. One extreme is what I call coercive, authoritarian bureaucracy. This includes the mechanistic machine bureaucracy. Here, the employees become an extension of the machine and are deliberately not given any room for manoeuvre because everything has to be standardised and scalable.

Between these two poles, I see an ‘enabling bureaucracy’. For instance, a hospital in which the rules and culture have a different basis than in an industrialised organisation. In this kind of organisation, resilience can also be attained through bureaucratic means. For me, resilience means that employees think for themselves, that they are able to change direction and make smart changes in the interests of the organisation if they have to. Above all, trust and intrinsic motivation are required for this. And this cannot only be achieved with self-organised work. In these empowering bureaucracies, it makes sense to have many rules and hierarchical structures. At the same time, managers should not yell down from above what should be done, but rather say: I support you in your endeavours.

Interview: Professor Dr Antoinette Weibel

What are the particular challenges faced by companies operating in intense competition?

These organisations must constantly come to market with new ideas and new products. They need a lot of new input as well as employees who dare to disagree. Economists in the tradition of Joseph Schumpeter would call this ‘creative destruction’. Within these organisations, the circle must be successfully squared, as solid trust and solidarity as well as individuality and autonomy are required. In addition, employees must be able to quickly engage with new people and also work across companies. Apart from intrinsic motivation, a kind of collective motivation is also required, based on the fact that employees feel committed to a common cause.

In my experience, however, there aren’t many companies like that in reality. In relevant management literature, the same examples keep being cited time and again.

How can the transition to a decentralised, agile form of organisation succeed?

If a company wants to introduce an organic organisation, it must credibly say to its employees: we’re embarking on this journey together. And that means it must first invest: in transparency, in support for employees and in trust. This also includes, for instance, honestly saying: we may have to let people go, but only where it makes sense in the long term. Another investment is staff development. You can’t expect employees to make decisions on their own responsibility straight away if they have always had to involve higher hierarchical levels first. Managers can’t simply change their leadership style from one day to the next either –it’s a process. They need to have time for this and mature. It’s about vertical leadership development and long-term personal development.

Companies that introduce a form of holacracy need to get their employees on board by reassuring them in a credible way: you can trust us – we trust you, too. If they simultaneously lay off a lot of people because the stock market expects it, for example, then this trust can quickly be destroyed. For example, the pharmaceutical company Novartis initially launched the ‘Unboss’ programme to motivate people to make their own decisions –

Professor Dr Antoinette Weibel

and only three years later, it was all over again. That ruined the working atmosphere. Employees got the impression that the programme was not about reducing bureaucracy and promoting innovation, but that it was just a cover for redundancies. Everything they had worked for in the meantime was instantly destroyed again.

How can employees suddenly work independently and on the basis of trust when they were previously used to clear guidelines and controls?

Sometimes new rules help. We had the opportunity to take a look at a company that had changed from a patriarchal and at times authoritarian culture to a very trust-based culture over the past ten years. Looking back, it is clear that, on the one hand, new managers were needed, but, on the other, there were also many employees who enthusiastically embraced the development.

However, it has also turned out that some employees always need rules. For such employees, this company has come up with a number of pointless rules, like filling in an Excel sheet. Sticking to rules – without further consequences – can help employees build up more security in the long term in order to ‘jump into trust’.

Is it even possible for intrinsic motivation to develop in a company if employees were previously only extrinsically motivated?

If we assume a ‘coercive bureaucracy’ – for instance, a bank that previously motivated its employees with lots of money – then our studies reveal that it’s not necessarily the employees who leave the company who have previously worked in a meaningless way, but above all middle managers who have lost power and excessive bonuses. In case of doubt, the company can do without these employees.

For the rest of the workforce, time and support is initially required, as they first have to learn the new way of working. The workplaces themselves also need to be reorganised in the direction of participation and a focus on strengths so that employees can contribute their talents to a greater extent. They must be able to see how they are

Interview:

Interview: Professor Dr Antoinette Weibel

continuously improving. And by that I don’t mean permanent feedback apps, but meaningful support. Leadership is an important point. It is also conducive to change if an environment is created in which employees can support each other and learn from each other.

I have been teaching positive HR management for about 15 years and everyone who has subsequently implemented it in companies tells me that it takes at least a year for success to materialise. This is also shown by the many studies on past experiences with the humanisation of work or with semi-autonomous teams.

The Chinese household appliance manufacturer Haier is frequently mentioned as a major industrial company ...

The Haier example is fascinating, but it only works if it’s embedded within Daoist philosophy, which is based on friendliness and flexibility and the realisation that we are all part of a whole. An extremely individualistic culture like America’s, for instance, where competition and ‘elbowing’ are desired characteristics, creates greater centrifugal forces and hardly allows for the necessary balance of ‘me and we’. In addition, in Europe the model is not compatible with the remuneration systems and wage structure.

So far, most successful examples of decentralised organisational change in larger companies come from abroad ...

Yes, the same examples are cited over and over again, honestly very few. Buurtzorg is a large Dutch company, but with only one product: care services. And it’s not listed on the stock exchange.

I am highly sceptical as to whether a large listed company could pull off a similar development. I don’t know of any such examples in Europe.

The American steel manufacturer Nucor, which is often cited by management consultant Michele Zanini, has also not fully implemented the changeover. And its successful model is difficult to transfer to the European context.

But some medium-sized European companies, which are not under so much pressure from shareholders, have taken advantage of this freedom. The Swiss pharmaceutical company Roche is still moving in this direction – at its own slow pace. Not long ago, I would have cited the example of Novartis, but unfortunately that is now a thing of the past. In addition, various cantonal banks in Switzerland are experimenting very successfully with decentralised forms of organisation and have also implemented the changeover well. Freitag, founded by two Swiss brothers who make bags from truck tarpaulins, have also successfully introduced holacracy as an organisational model.

The example companies in America are also always proud of the fact that no trade unions are involved. This is unimaginable in Europe – and, in my view, undesirable as well.

Does the digital transformation facilitate more people-friendly and motivating forms of work?

Six years ago, we had a project on the ‘datafication’ in personnel management. These large data processing systems monitor the entire corporate culture and attempt to map it digitally. Specially developed algorithms can not only tell us how to optimise work, but also which people should be made redundant. Even if this is not all permitted in Europe, our experience is that it is being used anyway. This digitalisation of the world of work is here to stay and is giving rise to fantasies that companies can manage more efficiently with fewer managers and get more out of their employees. But that would be naive: we have found that the algorithm is by no means the better boss.

Ultimately, algorithms are another form of bureaucratisation. They are associated with rules – and also with their own dangers. Because they make mistakes. These dangers must be countered, especially if a company wants to promote human creativity.

Digitalisation will change the world of work. However, if it is to go in a good direction, it requires civil society involvement and control. Otherwise, we could end up in what the left-wing Greek economist Yanis Varoufakis calls ‘techno-feudalism’, and nobody wants that.

Agile, decentralised forms of organisation demand new skills from the workforce. Can digitalisation not support this by relieving workers of routine tasks so that they can concentrate on more demanding tasks?

Unfortunately, I don’t expect AI to promote the necessary creativity, attentiveness and mindfulness. Instead, I see the danger that technology will rob us of the very skills we need to be able to contribute to these ideal holistic forms of organisation. It reduces our attention span and makes us forget how to speak and write, as different studies have shown. These social problems go way beyond organisations.

It is important to be able to help shape the system, to understand how the individual can contribute to the big picture and to be able to reflect critically. This requires, among other things, spaces in which people learn to reflect and think freely. If work processes are to be increasingly optimised and become ever leaner, there is a risk that employees will have even less time to develop these skills. This would destroy one of the foundations of this decentralised form of organisation – independent thinking.

Interview: Professor Dr Antoinette Weibel

Conclusion and outlook 5

Organisational transformation gives companies a competitive edge

At a time when technological progress is accelerating massively and new products are coming onto the market ever faster, the demands on the organisation are changing. The form of organisation must strengthen the ability to innovate and adapt so that companies can remain competitive.

Modern forms of management based on agile, decentralised structures and an innovative corporate culture are generally more effective at dealing with uncertainty and managing complexity than traditional bureaucratic structures, as they make more efficient use of the dispersed knowledge of the workforce. Thus, decentralised organisational transformation makes companies more resilient and innovative and helps to implement customer requirements more quickly. At the same time, workers can be motivated to perform better through greater personal responsibility and autonomy. Job satisfaction and motivation are key factors in the competition for scarce skilled workers on the labour market.

Successful organisations are designed to constantly adapt their structures to current challenges. Decentralised organisations also need a certain amount of authority and rules. Finding the optimal balance between self-organisation and control is therefore crucial to the company’s success.

Success factors for organisational change

When transforming into a competitive organisation, companies must take their employees with them and overcome numerous obstacles. A number of success factors can be distilled from the previous analysis:

• Company management must set a credible example of change and communicate it clearly, including with regard to possible unpleasant consequences.

• Credible commitment: the transformation project must be reliably underpinned by irreversible investments so that everyone involved is willing to cooperate and pull in the same direction.

• Whether structures are still agile and appropriate or the organisation has fallen back into outdated behaviour must be continuously reviewed. Questioning how things are done is a perpetual task, because once organisational progress has been made, it is not self-sustaining: hierarchical structures and paralysing bureaucracy can reappear.

• The informal structures that have formed in all companies beyond the official organisational charts must be kept in view so that they do not impede the transformation.

• All stakeholders should be effectively involved in the change process.

• The organisational transformation must go hand in hand with the digital transformation.

• Empowerment: the workforce should be supported in the change process with suitable coaching and further training so that they can meet the new requirements in terms of responsibility and skills.

• Finding the right balance between hierarchy and decentralised decisions: Where this balance lies must be determined individually for each business unit.

• Do good and talk about it.’ Above all, meaningful activities and customer-oriented change can be made the subject of corporate communication.

• The transformation of organisational structures is a marathon, not a sprint: the necessary cultural change and the gradual adaptation of informal routines and roles takes time and trust.

JANOSCH N. STOLLE, PURPOSE IN PROGRESS, Management Consultant, and GEA Group, Global Organisational Change Manager.

‘Many industrial companies don’t yet see any need for action’

German companies need to become more agile and flexible in order to remain competitive and innovative. So far, however, many transformation projects have come to nothing. Traditional structures and security thinking hinder development.

What role does digital transformation play in agile organisational change?

Digitalisation is an enabler for organisational change and can accelerate agile transformation processes. There is a great need to be able to react more quickly to external influences, and digitalisation can provide massive support here – if companies are ready for it. Conversely, the digital transformation will only work if the organisational structure of companies is adapted at the same time. Otherwise, it will not be sustainable.

The German economy is characterised by a strong industrial culture. Countries where the service sector dominates are generally more open to these transformation issues.

Unlike in China or the USA, there is still no large industrial company in Germany that has abolished hierarchies and bureaucracies throughout the organisation and organised itself decentrally. Is this because the successful foreign models for decentralisation cannot be transferred to Germany?

A direct transfer of models is generally not possible, as there is no universal solution for organisations. In Germany, historically evolved structures and a pronounced culture of co-determination make it difficult to adopt foreign models. Some companies have experimented with reducing hierarchies and implementing agile forms of organisation such as holacracy. These approaches attempt to combine agile principles with decentralised structures, but have often been abandoned as management has to take traditional structures and security concerns into account in addition to legal requirements.

The example of the Chinese company Haier illustrates that decentralised restructuring is feasible, but within a framework that does not (yet) exist in Germany. Change in German companies is slower than in countries such as China or the USA; it requires a tailored approach that both integrates innovative organisational principles and does

justice to the specific German market conditions. We often exchange ‘perceived security’ for rapid adaptability and flexibility. However, these are not necessarily mutually exclusive. Does this mean that the transformation of companies strongly corresponds to the institutional and social environment in which they are embedded?

Absolutely. Corporate transformations are heavily dependent on their surrounding institutional and social context. This can be seen, for example, in the fact that large German companies have integrated their digital start-ups from innovation hubs such as Silicon Valley or Berlin back into the traditional corporate structure. Despite adopting some agile methods, they are ultimately returning to their original ways of working. This illustrates the dominance of traditional structures in Germany, which make far-reaching transformations more difficult. If companies do not manage to adapt their structures comprehensively, transformations often remain superficial or short-lived. The institutional and cultural framework has a decisive influence on whether and how changes can be implemented sustainably.

For decades, traditional German industrial companies have been operating in calm waters and in a relatively stable market environment. How do you assess the pressure to act today in times of various crises?

In my opinion, German industrial companies need to become more agile and flexible in order to remain economically successful in the long term. But only where it really makes sense, because too much flexibility and uncertainty can also hinder the ability to innovate. The aim must be to reduce development times, as this is becoming increasingly important in international competition. Otherwise, organisational structures will stand in the way of progress and we will lose the security and stability that have characterised the German economy to date.

How can large companies make their organisations more agile? Is the idea of modelling oneself on the way start-ups work completely misguided?

I wouldn't put it like that. Whilst this complete outsourcing has often not worked sustainably in the past, it was at least associated with a learning process. Above all, organisational transformation is a leadership and cultural issue. Top management must pursue it with a strong drive and prove itself capable of asserting itself. It should involve the relevant stakeholders on site in the best possible way and communicate its ‘transformation story’ well so that employees realise that this time it is about something completely different from previous transformation projects. At the same time, the structures must be created that support this transformation and enable it in the first place. This also means providing personnel and resources that are initially cost-inefficient but promise significant efficiency gains in the long term. We have to stop thinking only from ‘as is’ to ‘to be’. Instead, we must also clearly define what the intermediate state looks like.

In terms of reducing hierarchies, how can flat hierarchies be used to incentivise employees?

Flat hierarchies promote direct communication and decision-making, which gives all employees more autonomy and responsibility. This personal responsibility can act as a strong incentive, as it provides the opportunity to participate directly in shaping processes and results. In addition, flat structures enable closer collaboration and a faster flow of information, which increases employees’ sense of appreciation and belonging. Motivation increases when each person sees how their efforts contribute to the company’s success.

Doesn’t decentralised decision-making require workers to have completely new skills that were not previously promoted in traditional companies?

That’s a decisive factor. In decentralised organisations, individuals must also be prepared to adopt an entrepreneurial mindset and acquire a wide range of knowledge. The ability to do this should actually be taught at university and during professional training. In large corporations, much of the transformation is based on role models, especially managers who exemplify particular agile behaviour: short official channels, few formalities. The understanding of the role of managers must therefore also change; they must see themselves more as a guide and hand over decisions to the teams. If top management exemplifies this leadership model, the organisational transformation can gradually cascade down through middle management.

Notes and bibliography

Notes

1 Cf. World Economic Forum (2023).

2 Cf. Milgrom / Roberts (1992), p. 25.

3 Cf. World Economic Forum (2024).

4 Cf. Ganschar et al. (2013).

5 Cf. Brynjolfsson / Mitchell (2017), Brynjolfsson et al. (2018).

6 Cf. Brynjolfsson / Mitchell (2017), Brynjolfsson et al. (2018).

7 Cf. Lindbeck / Snower (2000).

9 Cf. Appelbaum / Batt (1994); Pfeiffer (1994). See also Muster et al. (2021) for different perspectives on ‘Forms and consequences of agile working methods’.

10 Cf. Laloux (2014).

11 Cf. Hamel / Zanini (2020).

12 Cf. Colombo / Delmastro (1999).

13 Cf. Smeets (2017).

14 Cf. Fröndhoff (2024); Fröndhoff / Rauffmann (2024).

15 Cf. Henninges (1996).

16 Cf. Radner (1992).

17 Cf. McAfee / Brynjolfsson (2017), pp. 325 f.

18 Cf. Smeets (2017).

19 Cf. Hayek (1945).

20 Cf. Polanyi (1966).

21 Cf. Krippendorff / Garcia (2023).

22 Cf. Ferdows et al. (2022).

23 Cf. Krippendorff (2019).

24 Cf. Krippendorff (2019), Krippendorff / Garcia (2023).

25 Cf. Kuhn (2011).

26 Cf. Naranjo-Valencia et al. (2016).

27 Cf. Outthinker Networks (2023).

28 Cf. Outthinker Networks (2023).

29 Cf. Ritala, P. et al. (2020).

30 Cf. Büschgens et al. (2013).

31 Cf. Klein et al. (2023).

32 Cf. Schwaber / Sutherland (2020).

33 Cf. Williamson (1991).

34 Cf. Koçak et al. (2023).

35 Cf. Schwaber / Sutherland (2020).

36 Cf. UiPath (2021).

37 Cf. Rasmusen (2007), p. 245.

38 Cf. Lindbeck / Snower (2000).

39 Cf. Hamel / Zanini (2020), pp. 85 ff.; Krippendorff / Garcia (2023).

40 Cf. Milgrom / Roberts (1992), pp. 179 ff. and pp. 214 ff. for an economic overview.

41 Cf. Herr (2017).

42 Cf. Guszcza / Schwartz (2016).

43 Cf. Ariely (2016).

44 Cf. Graeber (2018); Soffia et al. (2022).

45 Cf. Digital.ai (2023).

46 Cf. Hamel / Zanini (2020).

47 Cf. Frey (1994).

48 In social psychology, this phenomenon is known as the ‘hidden cost of rewards’. Cf. Deci (1971).

49 Cf. Frey (1994).

50 Cf. Lindbeck / Snower (2000).

51 Cf. Müller et al. (2021).

52 Cf. Autor et al. (2003).

53 For an overview, cf. Müller et al. (2021).

54 Cf. Bughin et al. (2018).

55 Cf. Williamson (1983).

56 Cf. Farrell / Rabin (1996).

57 Cf. Schütz (2022).

58 Cf. Niskanen (1968).

59 Cf. Graeber (2018).

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Imprint

Bayer is a global enterprise with core competencies in the life science fields of health care and nutrition. In line with its mission, ‘Health for all, Hunger for none’, the company’s products and services are de signed to help people and the planet thrive by supporting efforts to master the major challenges presented by a growing and aging global population. Bayer is committed to driving sustainable development and generating a positive impact with its businesses. At the same time, the Group aims to increase its earning power and create value through innovation and growth. The Bayer brand stands for trust, reliability and quality throughout the world. In fiscal 2023, the Group employed around 100,000 people and had sales of 47.6 billion euros. R&D expenses before special items amounted to 5.8 billion euros. For more information, go to www.bayer.com.

A work environment in which decisions are made by those who do the work. In which it is not hierarchies but the curiosity, creativity and expertise of employees that count. Bayer AG is currently working on this and is changing its organizational model.

Would you like to find out more? Then follow us at bayer.com/strategy

Handelsblatt Research Institute (HRI) is an independent research Institute owned by the Handelsblatt Media Group. It produces scientific studies on behalf of clients such as companies, financial investors, associations, foundations and government agencies. It benefits from the combined scientific expertise of a 20-strong team of economists, social and natural scientists, information scientists and historians with journalistic expertise in the preparation of the results. The Handelsblatt Research Institute works with a network of partners and specialists. It also offers desk research, competitive analysis and market research services.

Authors: Sabine Haupt, Dr Frank Christian May, Dr Hans Christian Müller

Layout: Christina Wiesen, Kristine Reimann

Date: May 2024

Images: Bayer, Alexandra Kern (photo of Judith Muster), Adobe Stock, Fotolia, Ocean/Corbis, Envato, Freepik, Shutterstock