Act with bipolar consideration!
"The secret of consistently successful companies lies in the balanced interplay between change and preservation," says Dr. Hans-Joachim Gergs, lecturer at the Executive Education Center of the Technical University of Munich and organizational developer in a German automotive group. And this is how he substantiates his statement.
The experienced organizational developer Dr. Hans-Joachim Gergs sees the survival insurance for companies in being able to adapt to dynamic technological and market developments without ending up in the agility trap. "To ensure this, two tasks have to be solved in combination: continuous adaptation to changing environmental requirements (adaptation) and securing the social integration of the organization (stabilization). The solution path is shown by Talcott Parsons with his AGIL scheme." The American sociologist Talcott Parsons, who studied in Heidelberg for two years and also earned his doctorate there, was one of the figureheads of sociology in the 1940s to 1960s and, as an advisor to the American government, played a key role in the development of the Marshall Plan. As early as the 1950s, he was concerned with the interplay between agility and stability.
The AGIL scheme
"With the AGIL scheme developed by Parsons, it becomes possible to grasp the connection between agility and change on the one hand and social integration and stability on the other," says Gergs. Parsons, who developed his AGIL scheme on the basis of empirical results from small group research, recognized in the empirical studies conducted together with his colleague Bales: The groups studied only existed permanently if they fulfilled four basic functions:
- Adaptation (adjustment/future reference): The ability of a social system to respond, to adapt, to changing external conditions.
- Goal Attainment (goal pursuit/future reference)The ability of a social system to define and pursue its own goals (long-term programs and strategies).
- Integration (inclusion/present tense)The ability of a social system to establish and secure cohesion and inclusion (roles, positions, work organisation, etc.).
- Latency or latent pattern maintenance (maintenance/present reference)The ability of a social system to form and maintain basic values and norms (identity, culture) in order to guarantee its internal order in the long term.
Gergs: "While Adaptation and Goal Attainment stand for adaptation and change of a social system (agility), Integration and Latency ensure stability and order within the system." As Parsons found out, all four functional requirements are in an interdependent relationship with each other and must therefore be regarded as equally important. Thus, one functional grouping cannot permanently do without the other. "Since these interdependencies often only become apparent with time...
If the effects of the delay become noticeable, management will be tempted to overestimate adaptability (agility) in the current situation. This imbalance endangers the existence of the organization," says Gergs. Recent empirical studies in organizational research have also shown that organizations in a state of permanent upheaval tend to disintegrate and thus to experience a significant decline in their performance; companies that are successful in the long term derive their innovative power from a balanced mixture of change and preservation.
"Champions of the Century"
What is the attraction of this seduction? "The switch to organizational instability to promote agility is associated with a dramatic increase in responsiveness, speed of innovation and flexibility! Unfortunately, however, there is also a cen-tral consequential problem, the need to 're-stabilize' the organization. So the question is, how can companies be made more flexible without endangering their internal cohesion?" Gergs refers to the research results of Stadler and Wältermann (2012). They examined so-called "century
Champions", companies that have remained economically successful for more than 100 years (Münchner Rückversiche-rung, Siemens, Shell, etc.). Their results make it clear that the ability to innovate is not the central explanatory factor for the longevity of these companies. What distinguishes the long-lived companies from the comparison companies is their ability to maintain the culture and identity of the company despite all the adaptations, or to change them in an evolutionary manner.
"The strength of the century champions obviously lies in the fact that they maintain the right balance between renewal and adaptation on the one hand, and tradition and the identity of the company on the other," comments Gergs and draws attention to a study by management researchers Probst and Raisch (2005) from the Universities of Geneva and St. Gallen. They examined the 100 most serious corporate crises between 2000 and 2005 and found that, in addition to excessive growth, uncontrolled change in particular is a significant trigger of corporate crises. Excessive change and permanent corporate restructuring lead to serious consequential problems. They cite the technology group ABB as a typical example. After 60 takeovers in a wide variety of industries and a veritable restructuring frenzy, the former model company of the 1990s was left with a disjointed, homeless corporation. The constant change of direction and radical restructuring led to a complete loss of corporate identity. The situation was similar at Vivendi Universal or Enron. Here, too, the identity of the company was lost in the course of excessive change, so that in the end managers and employees could no longer explain what the basis of the respective business was.
Agility and stability are not mutually exclusive
Gergs: "Apparently, chronically fluid companies sacrifice their performance on the altar of agility in the long run. This correlation is also confirmed by studies on agile companies from the IT, media and Internet industries. Agility and stability do not have to be mutually exclusive. This was revealed by the empirical findings of the American researchers Hatum and Pettigrew (2010). They found that highly adaptable companies also have a strong identity.
"Long-term successful companies don't question everything in a revolutionary way." Hans-Joachim Gergs
Rita McGrath (2013) from Columbia University in New York also found in her research the connection between continuous work on corporate identity and the balance between stability and change in order to be successful in the long term.
Gergs: "Companies that are successful in the long term do not question everything in a revolutionary way, but rather adapt to the changes in an evolutionary way, taking into account their own culture and identity, which is consciously reflected and further developed in change processes. An agile corporate structure always requires an active and reflected examination of the company's identity. Thus, in long-term successful agile companies, the problem of re-stabilization is not solved on the level of organizational structures and work processes, but on the meta-level of norms, values, i.e. culture and identity. Identity work thus becomes a prerequisite for the non-destabilizing implementation of agile concepts and methods in companies."
Between changing and preserving
Agility and stability do not contradict each other, but are mutually dependent. For this reason, the Israeli organizational researcher Moshe Farjoun (2010) calls for abandoning the antagonistic view of agility and stability. In his highly regarded essay "Beyond dualism: stability and change as a duality", he argues that change and stability must be seen as two sides of the same coin and that stability is the basis of the ability to change. The ability to adapt and innovate quickly is only possible against the background of routines that relieve the burden of action. This is the Janus-faced face of routine, which can be both the midwife of change and its gravedigger. According to Farjoun, it is too often overlooked that organizations cannot introduce change if they do not at the same time rely on existing structures and cultures. Stability and change are thus not two mutually independent phenomena, but stand in a dialectical relationship to each other.
"How can companies be made more flexible without jeopardizing their internal cohesion?" Hans-Joachim Gergs
Gergs: "The art of corporate management in the 21st century lies in perceiving these interrelationships and translating them into actual management action. Understanding organizing as a per-manent oscillation between transformation and preservation, between risk and security, requires a continuous
Reflection work in the company."
