Through the Covid crisis and the reactions to it, organisations have become more tangible and transparent in their deep-seated, generally unspoken patterns. Much that was previously taken for granted is now uncertain.
Practices that had been merely tolerated have suddenly become official routine. In many areas, the pandemic has brought massive change to the way we work. If the organisation is the paradigm for work, then changes in work itself will create immense pressure for organisations to change. Based on our professional experience and observations working with organisations as consultants, in this article we examine the following questions: Which familiar areas of conflict have become intensified as a result of the “new normal”, and which new areas of conflict requiring attention has it given rise to? What conclusions can be drawn from this for a new normality?
Covid as a disruptor
During the first lockdown in March 2020, the world seemed to stop for a moment, only to resume again at breakneck speed –just different than before. Overnight, organisations were forced to find ways to maintain their operations under the new conditions. Many of these solutions were first-order changes – attempts to deal with the radically new situation using existing logic and experience. Organisations quickly introduced the new digital tools needed to cover familiar ground and organise the usual communication. The goal: use new tools to stay within the narrow confines of the familiar. Many projects that didn’t directly create value were put on hold. The massive disruption caused the same initial reaction in many organisations, such as the transition to remote work or the acceleration of digitalisation.
Second-order changes also began to appear. The lockdown massively disrupted conventional communication processes and challenged traditional ways of thinking. Due to the rapidly rising need for coordination, coworkers drew closer to each other despite the distance and meetings were held with a new level of enthusiasm in new settings. There was no need for this horizontal teamwork to be “forced” on employees from above: The initiative often came from within the departments themselves. Things that had previously been taken for granted needed to be reconsidered. Many organisations offered – more instinctively than consciously – room to experiment. Accepting crises and uncertainty as simply something new (instead of seeing them as a calamity) seemed to offer a helpful approach.
The long-term handling of the crisis reveals very different reactions depending on the respective organisation’s existing patterns – their inner logic.
Observations from the consultants’ perspective lead to the hypothesis that the pandemic initially intensified existing patterns in organisations. Those who possessed crisis plans were forced to acknowledge that they were of little use. When it came to dealing with this crisis, there were no routines to draw upon. However, prior engagement with crisis scenarios sometimes offered help in reacting more quickly. Scrutinizing the reactions of others offered little help – after all, they too were only experimenting. Many organisations concentrated exclusively on their core business, putting everything else to a halt. Those with tightly interwoven processes had minimal room for experimentation. Others tried to get serious about driving changes that had been underway for some time. The general willingness to change rose over time as everyone began to grasp that nothing would be the same in the wake of the pandemic. Even Aristotle knew: “We cannot direct the wind. But we can adjust the sails.” If we face a force that we can’t control, we should at least try to use it to our advantage.
The Covid crisis as a magnifying glass for areas of tension in organisations
The COVID-19 pandemic acted much like a magnifying glass, making the existing fundamental contradictions in organisations even more visible to the naked eye. It also caused new areas of tension. These issues were felt simultaneously, creating even more pressure. In the search for the next step forward, no one had tried and tested answers. Observations from the past year show that engaging with good questions can help companies find the answers that are right for them:
To answer these four questions, we compiled observations from our professional consulting experience into several key aspects for each question and discuss them in the following paragraphs.
1. How do we position ourselves?
Organisations constantly meander between the poles of the centralisation vs. decentralisation dilemma. Under the pressure brought on by the pandemic, the question of the right operating system shifted particularly into focus. When fast action is taken, this communicates competence and creates certainty. Ambiguity and uncertainty cause people to look “upwards”.
This makes a central control mechanism and the rapid dissemination of information across the hierarchy equally indispensable. In many places, expertise was bundled within task forces where all available information converged. Operationally, many utility companies even established fixed teams that alternated week-by-week.
Centralised control quickly revealed its limitations where the demand for action varied by department or region. In these cases, organisations had to rely more on the sound judgment of their local teams. Many things only worked due to the fact that the classic chain of command had broken down, leaving employees free to do as they see fit given the circumstances. This is a classic case of what Niklas Luhmann called “useful illegality”. This term refers to functional deviation from the rules for the good of the organisation. In the wake of the crisis, it seemed advisable to rebalance the forces of centralisation and decentralisation in line with the new realities.
Decisions are the engine that powers an organisation – they are an organisation’s most important communication events. The Covid crisis put pressure on organisations’ decision-making routines. Suddenly there wasn’t time for weighing options – fast reactions were needed. In order to navigate this uncertain terrain, the various departments within organisations communicated much more intensely than before. At the same time came the need for much closer coordination with suppliers, customers and public authorities.
Refusing to let themselves be backed into a corner, many organisations began to experiment. This went well where the employees were on board. Along with the question “What won’t work now?”, it was also important to have an eye for “What will work precisely now?” and “Where does the situation present unique opportunities?” The willingness to experiment obviously demands courage on the part of top management, but it also calls for encouraging staff to deviate from familiar routines. This often meant opportunities like quickly expanding the organisation’s online business or replacing products with alternatives, such as a varnish factory switching to disinfectant. Organisations now had to consider where to deploy staff who were suddenly left with nothing to do (e.g., outside sales). After the Covid crisis, organisations should decide which of the new decision-making routines they want to keep and which are no longer useful. Employees’ newfound autonomy should be retained.
Hierarchy and leadership are the third topic for the question of how organisations should position themselves. Our observations as consultants have shown that the pandemic is accelerating a paradigm shift in leadership that has already been unfolding for some time, one that is closely connected to the complex changes in the social environment organisations are embedded in. The core of this paradigm shift is the transition from hierarchical power to lateral power, paired with a gradual departure away from a mechanistic world view. The mechanistic view of leadership that – to put it crudely – one simply has to “pour something in” at the top, say all the right words and a simple chain reaction will lead to the desired result no longer works in organisations. Things that worked under halfway predictable conditions hardly do so in remote mode or Industry 4.0.
During the initial phase of the crisis, hierarchy experienced a new golden age in many companies as the need for direction and clear answers grew in the face of great uncertainty. And the first important decisions confirmed the legitimacy of hierarchy. In virtual leadership, many managers relied on their positions in the hierarchy to compensate for their physical absence. Making rash decisions on the authority of their positions was also easier than the route of informing themselves in boring online conferences with a bad connection. Leadership personalities spoke about the challenge of simultaneously securing communication, cooperation and control.
One very different trend could also be observed: namely that employees with no formal leadership positions were suddenly taking on leadership tasks. Many departments simply restructured themselves rather than wait for instructions from above. And many employees displayed hitherto unimagined skills and abilities in dealing with the unexpected situation. Managers were confronted with the fact that good solutions were being implemented without them. And many were also forced to acknowledge that their supposed supervisory role was useless when severed from their physical presence: They simply had to trust their staff.
HR departments often wrangled with the dilemma of what they should do with leadership development programmes. At first, leadership training was simply cancelled in many organisations. Others decided to get serious about organising it virtually and globally.
Leadership teams that used this moment to consciously take (more) time to reflect on their own work and on the new challenges facing their organisations reported very positive effects from this shared focus. For intelligent interaction within organisations, using carefully considered communicative settings to get a bigger picture, think through scenarios and change perspectives was a very helpful approach.
2. How do we create value?
In order to maintain their ability to act, organisations had to rely on diverse stakeholders in their environments – their ecosystems. Holding on to existing customers and securing established partnerships in the supply chain had top priority. Trusting relationships were strengthened while making new ones became practically impossible – at least during the first few months. In their search for new solutions and partners, organisations could expect to be met with little trust and very high expectations. Nevertheless, many had to risk new partnerships with partners physically closer to home as deliveries from Asia or America fell through. Old routines often had to be replaced by experimentation. This was easier for those who already possessed well maintained networks. In uncertain times, mutual support and the exchange of information help build sustainable relationships. Such relationships made it possible, for example, for a family-owned Austrian company in the auto supply sector to sell one of its divisions even during lockdown.
Innovation has become a survival necessity throughout many industries over the past years, and the term has even experienced a heyday as a management buzzword. In the spring of 2020, many expensive innovation projects were initially halted. The prevailing uncertainty didn’t pair well with experimentation. Crisis management was in demand, which interestingly also produced a number of innovative solutions – necessity is after all the mother of invention. Most of the new solutions, however, weren’t called innovations, but rather sprang from a pioneering spirit. Recognizing the new demand in time, a varnish factory in Tyrol used its facilities to produce disinfectant. And even as early as October 2020, a pharmacy in Vienna offered rapid Covid tests until health authorities became nervous and forced it to stop. Four months later, the same procedure the pharmacy had developed became the standard.
3. How do we work together?
During the Covid crisis, the informal side of organisational culture – the unwritten rules that have established themselves over the years – became more tangible and discussable. For example, how people can help each other, shoulder extra burdens, and receive thanks for doing so in a new, more open form. What is right and wrong now? The need for solutions that demand abandoning familiar paths also quickly became clear. This frequently met with unspoken tolerance from superiors and sometimes explicit approval. In dealing with irregular situations, employees were often forced to rely on their own powers of judgement. Knowing that the involvement of their superiors wouldn’t make things any easier, they often simply skipped asking for an OK. The crisis brought about new situations where new expectations developed without (many) decisions having been made. New unwritten rules quickly became established. The new expectations also led to the creation of new roles requiring new explicit rules, which required explicit consent.
The informal side of organisations was further weakened because opportunities for spontaneous exchange had been put on ice: no more conversations in the break room, before meetings or at the copy machine. Video conferences made everything visible – taking a colleague aside or asking a quick question were very difficult in that setting. A lot more was done (and was pseudo-documented) via email. Many superiors also wanted more reports in order to stay informed. Those who already had a strong internal network could keep on using it through digital channels. Making new connections, on the other hand, became more difficult. Voices from the margins found ever less access to the core of the organisation. New employees found it much more difficult to connect with the company culture. There were hardly any possibilities to observe how “things” were going, and to learn what would make a person popular or unpopular in the new workplace.
Changes in communication and decision-making processes led to a shift in power structures in many organisations. Some departments with expert knowledge, like IT or finance, suddenly gained more influence, and people with digital affinity found themselves surprisingly sought-after and influential. Other departments, such as sales, experienced a short-term drop in significance. Many who previously felt well connected and hierarchically well positioned now found that the flow of information was passing them by. These new relationships were a cause of tension between the new power players and the old formalised structures and historically established internal networks. The old reflex to maintain power – which produces “more of the same” – can be counterproductive if the company needs a new strategy or business model in order to survive.
Next to power dynamics, relationships are the second major topic in organisational micropolitics. The crisis has made relationships in organisations more valuable. March 2020 was shaped by a sense of pulling together. Coworkers supported each other; solidarity and helpfulness were even natural between people who hardly knew each other. We are now more aware of the emotional aspects of teamwork and their significance for the quality of the results. On the other hand, after months of intense virtual cooperation, it was a common observation that communication in online meetings had become more objective and conflicts had taken a backseat.
Distributed work and leadership from a distance confronted managers with the issue of trust. Where cooperation had previously been defined by trusting relationships, this tended to be reinforced – in absence of such trusting relationships, crises of confidence could easily develop. Old questions – such as how office presence correlates to performance, or whether it’s the input or the results that count – have now resurfaced in a new context. Close relationships and interactions based on trust are defining factors for good team performance. In digital teamwork, creating a constructive relational foundation in the team is even more crucial than when physical presence is the norm.
People found it easier to pull together and work together where the business was already partly secure. Where the sword of Damocles hung over people’s jobs, by contrast, latent conflicts tended to reignite. Stress and pressure drove individual departments to argue over whose performance is more important.
Shifting to digital teamwork became necessary overnight in 2020, and most companies were surprised to see how quickly they succeeded here. Beyond the issues of tools and securing IT infrastructure, new questions and dilemmas emerged concerning this new form of teamwork. Virtual cooperation needs clear rules, because it will remain part of the post-pandemic age. Here as well, a considerable change of patterns in organisational culture is also unfolding as long-standing, unquestioned collective habits are now a topic for debate. Informal conversations now also require a formal framework so that the social cement can hold. Many organisations realised their need for agreed time slots for video conferences and focused work. Many have had positive experiences with keeping synchronous and asynchronous communication needs distinct and assigning the right digital tools for each. Also helpful is an agreement that emails do not require an immediate answer. When information is urgently needed, a quick phone call is best. Another helpful measure is defining new roles, such as a hosting rotation for video conferences. Explicit agreements create clarity. Reviewing these agreements for usefulness every couple of months has proven a sound idea. With the approach outlined above, it is easier to make clear and conscious decisions about what should be regulated and what should be left unregulated.
4. How do we present ourselves?
This year of crisis provided many organisations an occasion to reorganise themselves and enhance their profile. Working on questions of the identity and thus the image of the organisation often made new narratives possible. At the onset of the crisis, most organisations felt they had to secure their business and rescue their revenue. Yet in many places, a quick shift to examining long-term effects and goals, questioning the organisation’s mission and vision and focusing on its strengths set off a positive reaction. Professional consulting experience has shown that reflecting on success factors in handling the crisis was often the first step. This reflexion strengthened the mutual support and feeling of solidarity mentioned above, in spite of the physical separation. Purposefully strengthening bonds during the loss of many familiar touchstones helped organisations secure the emotional foundation needed for addressing other topics. One part of the positive narrative for many organisations is a sense of their own positive contribution to the world. Many organisations consciously link the topics of the pandemic and climate change, viewing the social, economical and ecological frameworks holistically.
Many areas of tension that organisations face gained new clarity through the pandemic. On the one hand are the new problems and challenges, and on the other the cultural and social circumstances that enable or prevent a suitable response. This makes it important to not only consider the people in the organisation, but also its communication processes – systems thinking is particularly helpful here.
The most helpful ability in dealing with increased tension is ambiguity tolerance. This refers to the ability to live with ambiguity, ambivalence and uncertainty and not to immediately tackle contradictions with a black-and-white logic. Here it can be helpful to remember that our own approach or solution is only one of many – it might work, and then again it might not. And a good next step is to take a step back and marvel at all that’s going on around us. “Absurdity can also be a source of inspiration.” Fritz B. Simon.
Absurdity can also be a source of inspiration.Fritz B. Simon