Future Organization Report 2021
Many times, existing structures prevent the type of flexibility that companies need to respond to increasingly dynamic market and customer requirements. Hence they choose to take the journey towards an agile organization, which relies on autonomous actors and flexible structures. The objective: Better and faster results with a consistent focus on customer needs. But how agile are companies in reality and what does a successful journey towards an agile organization look like?
On the basis of 22 in-depth interviews with top decision-makers and a survey of 522 managers and employees, the Future Organization Report 2021 shows that companies are increasingly setting holistic goals in order to optimize their organization and set it on a path towards sustained success. Of course, financial indicators are still relevant, but companies increasingly recognize that dimensions such as sustainability, diversity and purpose are important factors for long-term progress. People Excellence and Process Excellence – combined with a strong customer focus – are the two pillars that lead to an excellent organization.
The results at a glance
Organizations think and act holistically in order to position themselves for optimum business success. Because – organizational excellence is not a fixed target status but rather describes a process of continuous development. Important parameters in this regard include financial success as well as the sustained creation of value for the customers. These objectives can only be reached with pro-active employees and efficient processes. A highly-effective workforce is characterized by cross-functional collaboration and an agile mindset. Process excellence benefits from qualified employees and is especially promoted by digitization.
The extended target area plays an increasingly important role. The key issues purpose – the purpose of the company –, sustainability and diversity are important dimensions for long-term success. When organizations use these three areas as starting points, they will increase the value creation of employees and processes in the long term.
- Purpose as a common compass: 63.9 percent of those surveyed believe that a higher-level purpose should be taken into account for critical management decisions. Moreover, employees show higher levels of intrinsic motivation when they believe that their work has purpose.
- Diversity contributes to the company‘s success: The role of diversity is also becoming more visible: Diverse teams are more productive, more efficient and more innovative. Top decision-makers have identified diversity as an important building block for organizational excellence. 87.2 percent of those surveyed say that they enjoy receiving feedback from people with different perspectives. This attitude is positively correlated with innovative work conduct.
- Sustainability as a strategic objective: 68 percent of employees and managers say that the impact on the environment should be considered in critical management decisions. In addition, sustainability is also required by more and more customers. Therefore it is becoming a strategic element.
Rigid structures are replaced with adaptive ones: Compared to the previous year, company agility increased from 40.9 percent to 46.3 percent. Agility has become an integral part of the process organization and continues to be expanded and scaled in the companies. In this context, the agility of a company is highly correlated with its performance.
As was shown in the previous year, customer focus continues to take center stage in terms of the business activities. Customer satisfaction is considered a key factor in important management decisions. With a value of 89.7 percent, customer satisfaction is actually given a higher priority than the company‘s profitability.
Rigorous digitization and the automation of processes play an important role in being able to respond more quickly to changes and reduce the stress on employees. 46.9 percent of managers and employees say that strong IT performance significantly increases productivity, the competitive position, sales revenues and profitability, which means that it is an important factor for the company‘s success. Motivated and enabled employees are a key success factor Employees are a key success factor for companies wishing to maintain their performance in today‘s quickly changing business world. When it comes to important management decisions, employee retention and career development are in third and fourth place after customer satisfaction and financial profitability. At the same time, 25 percent of employees do not have targets that are based on business objectives. This can have a negative impact.
A highly-effective workforce is characterized by the following important attributes: collaboration across functions and teams, an agile mindset and continuous skill development. In addition, cross-functionality also serves as the basis for an excellent organization and is highly correlated with company performance.
People and process excellence are linked: Efficient processes reduce the stress on employees. And employees use optimized processes to better organize themselves. In the context of self-organization, top decision-makers increasingly rely on online labor markets. They enable the AI-supported matching of employees (Teams) and projects (Tasks) in accordance with skills, interests and expertise. In this way, employees benefit from targeted career development, which increases motivation and employee retention.
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