Challenges of the VUCA world - Line hierarchy cannot cope with complexity

We know: In the VUCA world, flexible roles replace static positions, shared leadership is replaced by individual leadership, and self-organization takes the place of external organization. However, this cognitive knowledge alone is not sufficient to act accordingly. For people who have grown up in classical, hierarchically shaped companies, it is a mental challenge to develop agile routines.

"Why should I ask my boss when I know someone who has expertise?" We know: In the VUCA world, flexible roles replace static positions, shared leadership is replaced by individual leadership, and self-organization takes the place of external organization. However, this cognitive knowledge alone is not sufficient to act accordingly. For people who have grown up in classical, hierarchically shaped companies, it is a mental challenge to develop agile routines. Ralph Goldschmidt, born in 1963, a graduate economist and sports scientist, entrepreneur, trainer, coach, and passionate speaker, provides an outlook on necessary changes in collaboration in an interview and how we can overcome this transformation despite internal resistance. Mr. Goldschmidt, which forms of collaboration are best suited to effectively address the increasing complexity and dynamics of the VUCA world? Companies are mostly still organized as they were 100 years ago. In short: Thinking happens at the top, doing at the bottom. This was sensible for a long time. But the question is whether this hierarchical structure will continue to work today and in the future. Especially given the increasingly complex demands, products, etc. The answer is: probably not. Why? Because the hierarchical structure cannot handle complexity. Reporting lines run across various hierarchical levels upwards, decisions are slow, sometimes not made at all, and sometimes individuals in higher levels do not fully understand what the issue is about. An experienced field sales representative who knows his customers probably knows best what they want. Employees in research and development surely know more about their tasks than a business economist in the management. But decisions are still made elsewhere. A question posed to me by an apprentice after an event in a company nicely sums up the problem: "Why should I ask the boss when I know someone who has expertise?" Essentially, we need a new organizational operating system to cope with complexity. In the future, there will still be hierarchies, but they will be more like circle or team hierarchies. Self-organized networks where organized and spontaneous contacts can be made, and where traditional leaders no longer have the final say, but rather those who are truly knowledgeable in the topics. How must the role of individuals within a company change to successfully overcome the challenges of the VUCA world? Traditional leaders must place themselves more in service of the teams, step back, delegate decision-making authority, and create frameworks in which teams can act and decide autonomously. This will certainly not happen overnight. Because those leaders who, for example, were socialized in the 80s or 90s, have earned their positions, and essentially only know hierarchical structures, will find it very difficult. But especially the complexity of digitization requires a completely different knowledge than what we have acquired in the last twenty, thirty years. Therefore, it is necessary to have much greater trust in employees and their competencies than today. And as Niklas Luhmann taught us: Trust reduces complexity. For those who are not considered leaders today, this means that they must contribute more themselves. They must think more, be willing to take responsibility, and showcase their professional competencies. And they must have the courage to assert themselves based on their expertise in a project even if they are not in a leadership position, and if necessary, stand by their decisions. This level of involvement will be expected much more in the future. What impression have you gained from your experiences as a speaker in companies and conversations with employees? Are companies in this country on a good path towards reorganizing their hierarchies? There is certainly a willingness to take action and adapt to new realities. But progress is currently very slow. However, I can understand this. People are not familiar with the fundamental willingness to change that is necessary to truly embrace completely new work and organizational forms. And there is no model to orient oneself by. There is a saying: The only person who longs for change is a baby in a diaper. We humans are evolutionarily predisposed this way. When facing change, we first look for potential dangers. Internal resistances must be overcome. And once one has decided to implement a small change, one quickly believes it to be a major breakthrough. But looking around and seeing how rapidly new digital technologies are spreading in various areas, the realization follows: everything is progressing too slowly. How can the change succeed? Despite the aforementioned fear of change, the fundamental factor is the willingness to change. And this applies not only to an organization but to each individual. According to TU Munich, only one in five employees actively drives the necessary change processes, while one in two is considered a resistor. As mentioned earlier, the fear of change is quite natural and must be taken seriously. At the same time, it would help to consciously ask oneself: What could the change bring me personally, and what advantages can I derive from it personally? The answers can vary widely. One person sees themselves becoming more competitive, another sees the opportunity for a more flexible work life with positive effects on their personal life, and a third finds joy in learning new things and personal development. It is important to keep reminding oneself of the opportunities. Because by doing so, over time, one will notice that the fear recedes into the background.