The changing workplace – digital revolution and organisational change: how organisations can adapt and flourish through new ways of working and encouraging an entrepreneurial mindset. Professor Vlatka Hlupic who has been voted one of HRs Most Influential Thinkers 2017 delves into the importance of shifting managerial mindsets to engage and motivate staff
How can a diverse workforce adapt to the changes happening in the workforce with regards to flexible working and new technology?
There is a big picture we need to look at which is a picture about changing mind-sets. Leaders and senior management need to adapt to the different cultures that organisations need to have. So, if we start from there then we can see how employees can adapt to all these changes that are happening in the world of work. In terms of mind-set, I will start by explaining the five-level management maturity model I described in my book, The Management Shift. So, there are five levels according to extensive research I’ve conducted over the years that individuals and leaders go through with their mind-set development. There is a corresponding organisational culture at each of those levels and every level is characterised by specific thinking patterns, leadership behaviour, actions, beliefs and organisational outcomes as well. Level 1 as a mind-set is Lifeless and the culture is apathetic. This is where nothing gets done, people are too depressed and there’s a lot of fear and blame. Luckily, we don’t see a lot of that in organisations. Then at Level 2 the mind-set is Reluctant, the culture is stagnating. This is where people do the minimum they can get away with just to get their pay check, so they bring their body to work but their mind and heart stay at home. Then Level 3, the mind-set is Controlled, the culture is orderly, this is where we are micromanaged, this is where command and control is the dominant management style, this is where we do what we are told to do but we do not unleash our passion for work, engagement, performance, innovation, entrepreneurial spirit and so on. Then we go through this big shift, so what I call The Management Shift, when we move from Level 3 to Level 4. At Level 4 the mind-set is enthusiastic and the culture is collaborative and the key words here are trust and working in collaboration, having fun working, developing this entrepreneurial spirit, innovation, giving back to society and so on. Then occasionally we can go to Level 5 where mind-set is Limitless, culture is unbounded, and this is where there are no limits to what we can achieve. This is where innovative teams work day and night on some amazing innovations that will change humanity, such as Google X Lab inventing a driverless car or Google Glasses or the Lockheed Martin team inventing supersonic jets in the sixties and so on. So the key point is that with all these changes happening, the majority of organisations are still operating at levels, mainly 3 and 2 and I would say that 80% of organisations are there and the only way to adapt to all these changes in expectation of workforce, diverse demographics of workforce and technological innovations, the only way to thrive and not just survive is to operate from Level 4.
Why should employers encourage entrepreneurial mindsets in their staff?
It’s the matter of just moving away from surviving to thriving. Because of everything that is happening in the workforce, for example global figures for engagement show that only 13% of people are fully engaged, only 20% of people trust their leaders will tell the truth when confronted with difficult issues and only a quarter (25%) of people are passionate about their work, meaning corporate life expectancy and performance have been declining in the last fifty years by 75%. Obviously, there is a big problem within organisations. When employers encourage entrepreneurial spirit then anyone can innovate and organisations can create better, faster, cheaper products for customers. This improves performance, in terms of profit. At the same time employees will be more engaged, they’ll be more passionate about their work, they will improve staff retention and talent acquisition. That is the big picture and then there are lots of ripple effects that will happen once this entrepreneurial spirit is encouraged at Level 4.
How can employers cultivate an entrepreneurial mindset?
There are a lot of things that employers can do but it must start from the top. So we need to have leaders at the Level 4 mind-set first of all. Then it can spread like a ripple to other levels of an organisation and very specific things that leaders can do. They could cultivate … and transparency, sharing their opinion on what is happening behind the closed doors in the meetings. They can delegate responsibilities not tasks. If they’re delegating responsibility it means they trust that people know how to do their job well. Delegating tasks is micromanagement which is Level 3 management. They can allow people to make decisions on the basis of knowledge rather than a former position and organisational hierarchy. They can foster self-organisation in communities with passion and practice, [trust-inspired compensation system]. They can distribute their powers well and allow people to take charge of certain projects and decisions if they have more knowledge about that and so on. There are a lot of things and I describe in my book, The Management Shift, some of the key practices how that can be achieved.
What positive outcomes can a company receive from encouraging this?
There are many positive outcomes. If we start from the employees, they will be more engaged, and we know that there’s a link between engagement and performance. When performance goes up the profits will go up and more will be achieved with less resources in the public sector. There will be less absenteeism and stress, there will be better staff retention, talent acquisition. So again, all these benefits will have this ripple effect, both for individuals, for leaders and for organisations and the wider, for the entire society. Because if you have many companies that have this culture then they are more charitable as well, they care of the environment and they are a force for good, as Peter Drucker would put it.
What advice do you give to companies looking to adapt to the changes occurring in the workplace?
Firstly, I would advise leaders to work on creating this awareness for themselves and for others about the new ways of working and to work continuously and relentlessly to create this Level 4 mind-set and culture. Because in order to get the entrepreneurial mind-set there needs to be a shift in thinking, at Level 1 the entrepreneurial mind-set doesn’t exist, at Level 2 it’s very sporadic, at Level 3 it’s compliance, again there is no proper innovation there. Then when we go to Level 4, where the entrepreneurial mind-set and spirit gets embedded within the organisational DNA and then at Level 5 it becomes intrinsic, it becomes a natural way of working and operating, to constantly innovate and reinvent and think of better ways to serve customers and better products, services and so on. Therefore, the aim is to operate from Level 4 and this is what organisations need to do.
What are your findings based on?
This is based on 20 years of my research and many other scholars who have researched this topic as well. I have developed tools that can measure the progress on shifting to Level 4 and how they create this impact. The key message is, that this is based on evidence it is not wishful thinking and we also have evidence that companies that went down this route are substantially outperforming other companies that are still focused on command and control, short-term profit maximisation and creating returns for shareholders rather than have the bigger picture of long term investment and innovative culture embedded within all parts of organisations.