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Small is Beautiful

 

The human being always wants everything to become different and, at the same time, wants everything to remain the same.”(Paulo Coelho)


In countless speeches from CEOs, it is discussed how they must change all kinds of things, how many millions of EUROs they have to invest in digitalization. For these CEOs, is money then the means to the end for adapting to increasingly-uncertain times? Are all these millions necessary in order to survive? What can entrepreneurs do then who do not have these financial resources available to them and nonetheless want to survive? Do they have a chance or is it only an illusion which is not worth pursuing?

 

That the principle of “too big to fail” in no way has validity anymore in times like these can be shown from prominent examples like Kodak, Nokia, Yahoo! and countless others. On the other hand, global companies have been created which never intended to have this success. What, for example, has become of an intended network of graduates has been shown to us by the story of Facebook. How many start-ups, it was the idea in 2004 of Mark Zuckerberg–together with Dustin Moskovitz, Chris Hughes and Eduardo Saverin–which drove them to implement something new. Today, one would refer to this as a “dubious” idea of university students which occurred to these students of Psychology and Computer Science at Harvard University. Without their permission, Zuckerberg placed photos of female university students on the Internet and asked the webpage’s visitors to select the more attractive female student’s photo from the respective two randomly-selected photos. Even if it was online for only a few days due to numerous protests, it was the birth of a social change which nobody planned. Today, we know how innovative this idea from university students truly was in the end.

 

We Need More Courage for Innovations

In their management systems, big companies are too inertial in order to be able to develop innovative ideas. Systems oftentimes prevent organizational learning because the control mechanisms do not permit mistakes. In their obsession to control the operational processes, complex companies have allocated their work stages to ever-smaller sub-divisions. The Taylorism conveyed to us the illustration through the years that, through a division of labor, mistakes can be minimized and thus costs can be optimized. All this functioned perhaps (somewhat) during the times of industrial transformation, but we nonetheless need more intelligence in digitalization. Or as Tim Höttgens (CEO of Deutsche Telekom AG) termed it in the OrganisationsEntwicklung [Organizational Development] Journal, we must “give work its purpose back”. He referred to the Karl Marx problem of an “alienation from labor”. Through their division of labor, these companies have created structures which are now kept alive only for the sake of power. Powerful representatives and strong alliances will do everything in order to never truly implement the required transformation in reality–the transformation continues to be mentioned in the speeches from the CEOs and loses out in favor of the interests in the power play.

 

We Need Smaller Structures

 

Start-ups are not familiar with these problems. Their players are driven by a (customer) idea. They do not focus on processes, rules and functions. The participants in the system receive their status through the success of the idea (and if it is not this idea, then it will probably be the next one) and not by their functions. They are not afraid of making mistakes because they know that this is part of being successful. The autonomy of their action gives them certainty. The “power of the function” has no leeway there; power is rather used via external contacts in order to make their idea successful. And we oftentimes also search in vain for a business case–a basic prerequisite for even beginning to discuss the idea at large companies.

 

Our management systems have become too cumbersome. Large companies have also understood their success from them to be in many places and these days search for this success in cooperations or by investing in diverse incubators. However, we must begin to rethink our own structures. To “detoxify” hierarchies and help managers to learn a different management concept. Moreover, in his article, Tim Höttges referred to the statement from Thomas Edison who once said: “I haven’t failed–I have merely discovered 10,000 ways that didn’t work”. Today, true company success means discovering these ways. Those who do not want to do this will lose out during digitalization.