Self-renewal as a survival task

Dr. Gergs, the bottom line of your research is that sooner rather than later, every company will be confronted with the need to change in a way for which there is no role model if it does not want to risk failure. So your advice is to get to grips with the art of continuous self-renewal in good time. Are there any figures on the lifespan of companies?
Hans-Joachim Gergs: We have seen in recent years how quickly even large companies like Kodak, Nokia and Black-Berry or AEG can be displaced by competitors and changes in their industries. Richard Foster of the Yale School of Management analyzed the 500 largest US corporations represented in the Standard & Poor's 500. He found that 100 years ago, companies lived an average of 67 years; in 2015, according to his ana-lyses, they lived only 15 years. Companies in Europe are somewhat more long-lived. According to the findings of economists Stadler and Wältermann, the average age of listed companies in Europe was 28 years in 2011; but here, too, the trend is downward. This development makes it clear that success has never been as uncertain as it is today. The digitalization of the economy in particular will further increase the speed of change and once again fundamentally alter the rules of competition.

It follows ...
... that the ability to adapt quickly to changing requirements is becoming a key core competence of companies. According to the latest scientific research, the companies that are successful in the long term are those that have the ability to continuously reinvent themselves. The "classic" change management, which is reactive in its basic logic, is therefore reaching its limits. "Change the Change Management" is therefore the motto. More and more, the need arises to avoid radical transformations and to initiate change processes at an early stage in order to use the existing resources in the good years and to prepare the organization for the future with foresight.

What is the challenge here?
In the forward-looking design of change processes, because most companies are not built for forward-looking renewal. The theories and concepts developed by the pioneers of management, Taylor, Sloan, Ford etc., which still dominate management thinking today, are all geared towards stabilization and standardization. It is therefore not surprising that the history of most companies shows long periods in which only minor changes occurred, interrupted by a few phases of profound change, usually triggered by a crisis.

So now continuous self-renewal, which you characterize based on your research as?
The following is characteristic of continuous self-renewal: 1. change or transformation is firmly integrated into the organisational processes and proceeds continuously and with foresight. Renewal is therefore not only initiated when the company has to recognise that it is lagging behind the development or is already in a crisis. 2. the focus is not on the optimization of the existing, but aims at the fundamental questioning and renewal of the business model or the culture of a company. 3. change impulses are not only set by the management, but also by the employees.

How does the recognized necessity become lived reality?
This question has occupied me in a twelve-year research project in which I intensively accompanied ten companies. All of these companies underwent a profound transformation of their business model without being forced to do so by a crisis. On the basis of these case studies, I was able to work out that continuous self-renewal functions according to completely different rules and principles than classic change management. In total, eight principles could be identified according to which the companies I studied consciously or unconsciously shape change processes. I have summarized them in a cyclical model of renewal capability:

• 1. strengthen self-reflection.
• 2. intensify communication and networking.
• 3. allow diversity and nurture paradoxes.
• 4. doubt and forget.
• 5. explore.
• 6. experiment.
• 7. establish a culture of mistakes and feedback.
• 8. perseverance and thinking in circles.

This suggests an intensive internal communication process?
You can't do without it. Here we can learn a lot from the Medici family. As early as the 15th century, the Medici recognized the value of networking and brought together people from a wide variety of fields: scientists, writers, philosophers, architects and artists. When these personalities met, they developed new ideas that, taken together, founded the Renaissance, one of the most innovative eras in human history. Leaders in the companies I studied do a similar thing. They see one of their most important roles in the design of the company's communication space. They mix different know-how in the company again and again. For example, by creating fresh interfaces through departmental job shadowing, by setting up cross-departmental teams or by networking employees in large group conferences. Experience has shown that internal and external communication platforms promote the exchange of knowledge and experience and thus increase the capacity for renewal.

Does this mean that the leaders have to live a new understanding of their role?
The experiences from my research project point to a completely new role or a completely new understanding of the role of leadership in the process of continuous renewal. It is less the "heroic" leadership, but more the leadership that sees it as their task to build an infrastructure of change in the company. They see themselves more as organisational designers or social architects for innovation and learning and, based on this attitude, strive for change as a fixed component of the operating system, as a permanent task that has become necessary. In this constant struggle for renewal lies the new and real challenge for management. Companies that are capable of renewal virtually "love" change because of the spirit that prevails in the company, constantly question the existing and embark on the path into the unknown without need. The task of management is to maintain this creative tension in the company on a permanent basis.

What are the tools that help him to do this?
The phrase "A Fool with a Tool Is still a Fool!" applies. If the mindset, if the overall corporate way of thinking is not right or the cultural elements are not lived, even the most beautiful tools or methods will come to nothing. The key to the whole is the mental attitude of the management. Nevertheless, methods are helpful, such as learning journeys, future conferences, leadership and organizational experiments or methods to improve the feedback culture, such as after-action reviews. Furthermore, new technologies require more lateral communication, which increases the importance of large group methods. They create networking, even beyond the boundaries of the organization. In this context, online communication via social communities is also becoming increasingly important, without face-to-face communication losing any of its fundamental significance.

Put it in a nutshell: What is the motto of continuous operational self-renewal?
"Expect the unexpected!" If you just consider the three principles "Strengthen self-reflection", "Doubt and forget" and "Explore", it becomes clear that companies capable of renewal distinguish themselves by always keeping their eyes wide open. They are attentive and do everything they can to constantly perceive changes and opportunities in their environment. In doing so, they take an experimental approach. Under the motto "Expect the unexpected!", companies gain clarity more quickly about what is happening and thus also about the opportunities in their environment. This is exactly the difference to classic change management. While in the linear-causal model there is a strict separation between "first think (analyze, decide, plan) and then act (implement plans)", companies with the ability for continuous self-renewal permanently switch between thinking and acting.