“The Big Shift” No single organization will be the same

Looking back in 2050 at the first decade of the 21th century our (grand)children will probably recognize the characteristics of another industrial revolution. The Edge, the research institute of Deloitte is speaking of The Big Shift’[1]. The ‘Big Shift’ is the joint effect of two processes:

Distributed growth of knowledge

The old Philips buildings offer workplaces to many small innovative companies

During the past 10 years, ICT – bandwidth, memory, speed, and especially software – has improved tremendously. Connecting ICT-power with other devices has enabled 3D printing, Internet of things, wearables and robotics. Its disruptive influence at industry is only in the first stage. However, even more important is that the underlying knowledge has become distributed and is no longer limited to small groups of scientists in universities and R&D centres. Worldwide, millions of young entrepreneurs prefers the live of an explorer and innovator in garages, empty industrial buildings, science parks or wherever over being employed in a large bureaucratic company.

Global competition

Until recently, a centre-periphery model sufficed to characterize the economic relations in the world. The centre (Europe and the USA) bought raw materials, and mass products in the periphery in exchange of high-end products, knowledge and (financial) services. Nowadays, a multitude of centre-periphery relations has come into being. The old centre has to compete with rapidly developing competing centres. The winner is going to be the owner of the most distinguishing innovation capabilities. Besides, the development of ever-changing new products requires a high degree of inter-firm cooperation. Here too, small and agile new market entrants seem equipped best.

“Traditional” companies have to reinvent themselves In order to cope with the ‘Big Shift’. The first step is dividing itself in smaller flexible entities. Further, the process of reinvention has to put knowledge workers in the centre of operations at the expense of the until now dominant position of managers-class. The feasibility of a redesign depends from the degree of engagement and intrapreneurship of the work force. In this respect, recent studies are not encouraging.

Engagement

Each year Gallup is collecting data of the engagement of the global workforce[2]. Employees are characterized as being ‘engaged’, ‘actively disengaged’ and ‘not engaged’. The table beneath gives an overview, showing that the USA, Australia and Canada have most reasons for optimism.

Engaged employees worldwide 2The lack of engagement is caused by the “low strain” characteristics of the majority of jobs, the authoritarian behaviour of many bosses, the uncertainty of keeping one’s job and work pressure.

Intrapreneurship

I prefer the term intrapreneurship over ‘passionate explorer’, as deployed by Deloite[3]. Intrapreneurship is based upon specialist business knowledge, the drive to explore new frontiers and a feeling of urgency to cooperate. The ‘Big Shift’ report reveals that only 12,5% of the workforce is ‘intrapreneurial’. Probably the lack of engagement is prohibiting quite a number of latent intrapreneurs to act.

The lack of Intrapreneurship is quite understandable. The 20th century companies have organized their production according to well-chosen strategic principles empowered by detailed planning, control and quality systems. Consequently, skillful and accurate performers dominated the workplace. Competence management systems guaranteed the right employee at the right spot. Room for intrapreneurship was limited.

It is this lack of intrapreneurial opportunities that has causes a true exodus of talent from companies in the USA and other countries. Each year, about 2 millions of employees have given up well-paid jobs. The estimated damage caused by the departure of high-potential employees is about $200 billion each year. The independent workforce in the US nowadays counts about 17 million people.

The conclusion is obvious. Above all, the strongly-needed reinvention of companies depends from the retrieval of engagement and entrepreneurship al main characteristics of the work force.

Engagement will increase as soon as the workforce feels more respected and recognized and if managers do better jobs as coaches. Structurally, workplaces have to become more demanding. Theresa Amabile has discovered that employees are motivated in the first place by ‘the progress principle’, the meaningfulness of their contribution [4]. In order to comply, workplaces have to combine a sufficient degree of challenge with a corresponding degree of autonomy.

Retrieval of intrapreneurship is more demanding. Needed are: decentralization of the governance of firms, servant leadership, reduction of management, smaller differences in compensation of managers, active promotion of (open) innovation, and deploying collaboration opportunities outside the firm.

Anyway, most companies worldwide have a long way to go. The most innovative firm will be the firm that is succeeds in the improvement of engagement and intrapreneurship.

[1] http://goo.gl/QaNXdy The report is a comprehensive study of global development, innovation and entrepreneurship in contemporary history

[2] See for more results: http://www.gallup.com/poll/165269/worldwide-employees-engaged-work.aspx

[3] http://goo.gl/oQEQzi. Research with respect to the passion of the workforce included 4000 employeed in different branches in the US.

[4] TED-talk Theresa Amabile: The Progress Principle: https://www.youtube.com/watch?v=XD6N8bsjOEE&feature=youtu.be

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