PART 1. Erno Marius Obogeanu-Hempel: Companies need motivated employees - time for a drastic change!

Due to globalization, competitive pressure is increasing, product life cycles are becoming shorter, and the pressure for innovation is rising. Everything is changing – sometimes at a rapid pace like never before: demographics and social behavior, markets and technologies, as well as business models. No company can afford to rest on its previously successful path because its own product could soon be disrupted and rendered obsolete. The world's largest companies are no longer oil companies or banks, but Apple, Alphabet (Google), Microsoft, Amazon, and Facebook. Apple could buy the companies Daimler, Volkswagen, and BMW from its current cash reserves. And not just one of them, but all of them together. But what do the new giants and startups do differently from their competitors, and why are they so successful? ### Agile Team-Communities instead of rigid departmental silos Today, the hierarchical organization of a company with specialized departments is considered standard, and the heads of the individual departments have glorious titles such as Chief Executive Officer, Chief Financial Officer, or Chief Technology Officer... which originally come from the military, more specifically from the Navy, and were adopted by the first trading companies in the 17th century. The company, its departments, and the people, the "Human Resources," are documented in a hierarchical organizational chart that immediately shows who reports to whom and how important or unimportant a person is in the company. In the military, for aircraft manufacturers, or for hospitals, such an organizational form certainly makes sense – but not for companies developing products and services for private customers or business customers. Because in today's digital age, markets, technologies, and customer needs are changing faster than ever before. While departments work efficiently in their specialized silos, there are enormous coordination efforts with other departments – with significant friction losses at the interfaces due to the increased complexity of tasks. Decisions are usually not made by teams but by a few managers. ### Customer Proximity as a Critical Success Factor Which departments and employees in your company have direct contact with your customers and thus receive direct feedback on your product or service offerings? Can these departments then initiate an improvement? Customer proximity, empathetic customer understanding, customer-centric product development, and agility are crucial. The classic hierarchical top-down approach – as well as departmental thinking – hinder the pace of decision-making processes and have a significant impact on business success. Isn't it astonishing that decision-makers in most companies are the people who are farthest from the customer – namely the executives, the managers? Teams must be able to create new ideas across departments or interdisciplinary and implement new features rapidly and agilely – from concept to operation. For this, the knowledge and ideas of each employee must be valued and utilized – the skills and competencies of each individual matter! Decisions must be able to be made within the teams – because the teams have the shortest distance to the customer. This is exactly the strength of the Big Five: Apple, Alphabet (Google), Microsoft, Amazon, and Facebook – as well as many startups that can quickly respond to any change and are incredibly successful. It is not the largest but the most adaptable companies that will survive – this is pure Darwinism: "It is not the strongest nor the most intelligent companies that survive. It is the one that is most adaptable to change." With this development, it is clear that hierarchically organized companies have been overtaken since the digital age. According to a survey by Deloitte from 2017 (Global Human Capital Trends; lnk2.net/2uHNACs), only 14 percent of executives worldwide believe that the traditional hierarchical organizational model with specialized departments makes their organization effective – at the same time, only 6 percent say they are "highly agile" today. ### Conclusion Companies need more modern team-centric structures, management systems, and processes that decentralize decisions away from the top management and simplify them – agile team communities that promote the independence and responsibility of each employee. Also, the mindset of employees and an innovation-friendly corporate culture are of crucial importance – more on this in my interview with Steve Wozniak, co-founder of Apple – audio/podcast available at www.ernomarius.com/woz-interview and in the next part of my blog article. Classic management systems, where decisions are only made from the top, cannot keep up. Employees often give up, submit to the conditions, become "non-doers," only do the job as required, "9 to 5," and thus reinforce the walls between the specialized departments. Let us together seize the opportunity of digitization, take responsibility, and make the world a better place. *For more information on how companies need to reorganize in the digital age, Erno Marius Obogeanu-Hempel describes it in the chapter "Successful and Motivated Teams: How Innovation Succeeds in Your Company" from the book "Excellent Heroes. Hero Strategies for More Success in Business" (€24.90, 181 pages, illustrations, Hardcover, ISBN 978-3766499554). This blog post is an excerpt from this book.*