White paper New Work: principles, areas for action and leadership

The term New Work goes back to the social philosopher Frithjof Bergmann. Towards the end of the 1970s, he wanted to establish an alternative model to the classic patterns of values and behaviour in capitalist societies. Bergmann named independence, freedom and participation in the community as the central values of New Work.

Globalisation, automation, digitalisation, rising levels of academic education, the competition for skilled workers and the increasing complexity of economic interdependencies have given these approaches new significance in a changed context. There is still no uniform definition today. New Work is understood as a collection of methods and efforts that unite the current lived reality of employees with the structures of the organisation.

For companies, New Work is thus an approach to solving current organisational challenges. Caught between globalisation, digitalisation, demographics, knowledge transfer and climate change, they are looking for answers to internal and external requirements.

Within the organisation, the digitalisation of business processes, new value chains and the changed values and expectations of employees and managers call for new impulses for management, collaboration and leadership.

In the organisation’s relevant environments, target markets are volatile and in some cases subject to disruptive change. Production cycles are getting shorter, and classic strategic planning is reaching its limits. More of the same is no longer enough. New thinking and new options for action beyond the self-assurance that has grown up within the organisation are gaining in importance.

Phases of crisis make it particularly clear that rethinking is needed in all areas of the organisation. It ranges from a clearly communicated vision of the future, through a progressive corporate and leadership culture that enables real innovation, to personnel management that focuses on employees’ strengths and puts human relations in place of human resources.

New Work is not a single instrument. The term covers a large number of topics that can be assigned to two levels: the macro context of society, economy and politics, and the micro context of the individual organisation.

The macro context includes the conditions under which companies work: a volatile, uncertain, complex and ambiguous environment, for which the acronym VUCA stands, plus global networking and digitalisation. Added to this are economic and socio-political debates about conscious capitalism, the economy for the common good, the welfare state, basic income, the minimum wage and employment law.

The micro context is about shaping the individual organisation. This includes self-organisation, agility, democratisation within the company, incentive systems, diversity and error culture. Learning architectures, the learning organisation, Design Thinking and talent management also belong here.

A further group of topics concerns concrete working conditions: workplace design, remote work, co-working, job sharing, work-life blending, corporate health and competition through social benefits. Purpose-giving leadership and corporate social responsibility connect the organisation with the expectations of its employees and of society.

The breadth of these topics explains why New Work easily remains vague in organisations. The topic becomes workable through principles that provide orientation and through fields of action in which these principles become concrete. Both are presented in the following chapters.

According to Markus Väth (2019), the New Work Charter describes five principles: promoting innovation and a positive error culture, personal responsibility and involvement, purpose-giving leadership, the learning organisation and social responsibility.

The first principle assumes that the future is shaped with curiosity and confidence. New Work therefore means actively engaging with new ideas and topics. The principle names three ways of doing this.

First, organisations create spaces for experimenting with new ways of working. So that New Work does not remain an abstract concept, spaces are literally created in which new methods of collaboration, new architectural concepts, new leadership models and production processes are tested.

Second, they practise a culture of imperfection. Anyone who tries something new also makes mistakes. Organisations therefore promote defined zones of error tolerance and psychological safety instead of a culture of fear.

Third, they strengthen networking. New ways of working bring new insights and depend on these being shared. Organisations benefit from active interface management and intensive networking between managers, teams and departments.

The second principle is personal responsibility and involvement. Participation sometimes produces no decision; it delays it. So that organisations remain able to act, they specifically promote the self-responsibility of managers and employees.

To this end, they establish models of self-organisation. New Work organisations promote self-organisation and operational self-regulation at different levels. Using the relevant methods alone is not enough. What is required is deliberate engagement and a corresponding attitude on the part of everyone involved: leadership instead of management.

Added to this is extended budget authority. Money is a decisive factor in organisations. New Work promotes individual and collective budget authority and thus real financial responsibility for one’s own decisions.

Financial participation models complement this approach, because ownership is a strong motivator for responsibility. Organisations give their employees a collective share in success or make them individual co-owners of the organisation.

Every organisation serves a purpose, a form of value creation. The third principle, purpose-giving leadership, requires New Work organisations to involve their employees in finding and refining this purpose through deliberate, structured processes.

They unite personal and professional development: employees are deployed according to their strengths and needs and can grow and realise their potential in line with the organisation’s purpose. They also regard corporate identity as a value. New Work organisations can clearly name not only their financial but also their economic and cultural value creation. This value creation is reflected in a confident and visible corporate identity.

Finally, they make operational activities meaningful. New Work organisations can answer the question “what for?” at any time, whether regarding portfolio, strategy, organisation or technology. Employees are a conscious part of value creation and of the service to customers.

The fourth principle is the learning organisation. Organisations need innovative impulses more than ever. New Work organisations enable their employees to be innovative by specifically promoting creative abilities.

Learning architectures for collective development serve this purpose. The world’s knowledge has long exceeded the learning capacity of individuals. Employees should therefore learn from one another, expand their abilities together in a targeted way and thereby also develop personally.

At the same time, New Work organisations strengthen their continuous self-renewal. Companies can rest on their laurels less than ever. Mechanisms of self-reflection promote renewal, including through the “healthy” discarding of outdated or dysfunctional conditions. They also establish shared decisions: decision-making channels are adapted to requirements, and this includes decisions made collectively.

The fifth principle is social responsibility. Organisations are embedded in a world beyond the factory gates. New Work organisations strengthen community and their ties with local society.

They take sustainable and ecological business into account and recognise that their economic value creation must include the careful use of resources and the protection of the environment. They root the company through regional engagement and, through concrete commitment in society, science, technology or culture, improve people’s lives beyond the boundaries of the organisation.

And they are transparent towards all stakeholders. New Work organisations follow fair tax practices, do not take advantage of their partners, suppliers and customers, and deal openly with their own misconduct.

Anyone who wants to establish a New Work culture works in five areas at once: strategy, people, leadership, culture and organisation. Eight fields of action can be assigned to them, which are described one after the other below.

In strategy, the task is to paint an attractive vision of the future. In people, organisational learning is promoted and work-life blending is managed. Leadership means leading in a purpose-giving way and developing future viability. In culture, self-responsibility is permitted. In organisation, agile collaboration is shaped and ambidexterity is managed.

The first field of action is the vision of the future. People and companies need attractive visions of the future, especially after phases of crisis. Authentic visions of the future drive innovative companies. Concentrating on a desirable vision of the future that takes the emotions in the company seriously provides an action-guiding orientation for collaborative processes.

In difficult phases, an attractive vision of the future acts like a lighthouse and creates orientation for coping with crises. It helps in dealing with complexity, maintains performance in difficult times and secures future viability in the long term.

The prerequisite is that the vision of the future is well communicated and operationalised. It then makes clear to individual employees the contribution and meaning of their work and provides tangible performance incentives.

Dealing with a profound crisis requires two things: learning on the part of employees and a change in the processes, routines and structures that exist in the organisation. The two belong together.

Organisations that succeed in interlinking people and organisational development cope more easily with change and with uncertainty and growing complexity. For this, learning architectures must be set up that enable coordinated people and organisational development.

Two ideas from the principle of the learning organisation come into play here. Companies can rest on their laurels less than ever and promote their continuous self-renewal through mechanisms of self-reflection. And because the world’s knowledge exceeds the learning capacity of individuals, they enable their employees to learn from one another and expand their abilities together.

The second field of action in people is work-life blending. Broad experience with working from home has shown many organisations that they can trust their employees working from home.

What used to apply to business people has become normal for a large proportion of employees: work emails are read in leisure time and often answered too. Conversely, numerous device-independent online services make it possible to deal with private matters during work between two meetings.

The possibilities of New Work offer employers and employees many opportunities, but also bring risks. New Work requires a more flexible approach to working-time models and nevertheless does not release employers from their responsibility to fulfil their existing duty of care.

Work-life blending must therefore be managed so that its advantages can be fully realised for both sides.

Crises show that measures that seem pointless are not accepted. The difficulty then lies less in implementing what is necessary than in communicating it clearly. This applies to organisations as much as to politics.

The principles of New Work are also gaining relevance because they reflect the lived reality of younger generations. Young people no longer find satisfaction in working life solely in doing their work well, getting it done quickly or being well paid for their contribution. Employees want to understand why they are carrying out a work assignment.

In the organisational context, it is therefore no longer enough to explain a work assignment and its significance well. Ideally, the goals of an organisational unit are also developed together with the team, and its contribution to value creation is defined collaboratively.

The second field of action in leadership is future viability. Complexity, dynamics and a clear “what for” shape the business logic in New Work organisations.

Organisational resilience requires contemporary corporate management. In it, increasing performance and operational excellence no longer come first. Priority goes to the task of creating the right conditions for adaptation and the ability to change.

Managers must pay greater attention to changes in the organisation’s environment and bring them into line with the structures and routines within the organisation. The primary task of leadership thus shifts: away from maintaining regular operations, towards irritation, deviation and constantly questioning the path taken.

This includes establishing methods and models in the organisation that promote circular thinking, that is, thinking in non-linear relationships.

New Work calls for more democratic structures in organisations. Because participation sometimes delays decisions, an organisation only remains able to act if it specifically promotes the self-responsibility of managers and employees.

Specifically promoting self-responsibility, self-determination and self-organisation requires trust in employees’ capabilities and appreciation of their performance. Transparent involvement that unites the development of organisational goals with employees’ personal goals strengthens the organisation.

So that New Work does not remain an abstract concept, organisations create freedom in time and space to try out new methods of collaboration, new architectural concepts, new leadership models and production processes. Anyone who tries something new also makes mistakes. Organisations therefore practise a culture of imperfection and promote error tolerance within a defined framework.

In organisation, the task is to shape agile collaboration. Experiences of crisis make clear that change and adaptation do not have easily defined start and end points. A linear understanding of change or transformation, carried by the hope that everything will finally be fine at the end, has had its day.

Control and steering are replaced by agility and resilience. They enable organisations to deal permanently, appropriately and proactively with constantly changing requirements.

Organisational agility in the sense of New Work does not arise simply from introducing modern and agile methods. An organisation is agile and capable of innovation when it has the organisational competence to recognise uncertainty about a required solution and about the path to the solution, and to use agile ways of working for these challenges in a targeted and skilful way.

This also includes the ability, depending on the situation, to build up or dismantle structures that permit and support agile ways of working.

Crises require ambidextrous competences: an organisation must be led safely through the crisis and at the same time prepared for the time afterwards. Ambidexterity, derived from the Latin ambo for both and dexter for right, means two-handedness.

It refers to the organisational ability to manage today’s business efficiently and continuously optimise it, “exploitation”, while at the same time recognising potential and developing innovations, “exploration”.

New Work therefore does not work without leadership. Leadership manages the balance between exploitation and exploration and the paradoxes associated with it. They concern resource allocation, workplaces and working conditions for the employees of the core business and of the internal innovation wing, as well as the structural coupling of the two sides.

The field of tension can be described by two variables: the degree of uncertainty in the relevant environments and the uncertainty within the organisation, that is, the difficulty of planning work processes. If both are low, efficient working is appropriate. The focus is on optimising existing processes and products and managing customer relationships.

If both are high, agile working is called for. Agile methods then serve to develop new ideas with which unusual customer expectations can be met, and to bring about innovation. Leadership stands between the two ways of working and connects them.

New Work and agile frameworks alone are therefore not the solution. Rudolf Wimmer (2019) states, in essence: agile structures in established organisations require the recognition that these forms of organisational design cannot be extended to the entire organisation. In them, those involved are meant to learn to manage essential leadership tasks on their own responsibility in self-organisation processes.

According to Wimmer, it is a misconception that agile frameworks dissolve essential leadership tasks and that organisations could, as it were, automate their steering without hierarchy in team-based processes. Deliberate and structured engagement with developments in an organisation’s relevant environments remains an essential leadership task.

The Zukunftsinstitut describes New Work as a megatrend (2020) and names several developments that make its influence on the world of work tangible. They should be read as assessments, not as reliable predictions.

The question of meaning becomes central. New Work offers the opportunity to develop personal potential and inclinations. The more strenuous, monotonous and repetitive tasks are done by artificial intelligence or machines, the more human abilities such as creativity and empathy move to the centre. Solving the tasks of the future determines what people do and gives work a new meaning.

The office takes on a different significance. While remote work is characterised by concentrated deep-work phases, the office is changing from a place of work into a hub for co-creation and co-working, for real interpersonal relationships and genuine corporate culture. It is the place where corporate values are lived, a sense of “we” emerges and new things are created together.

Corporate communication is changing. The options for internal communication are becoming more varied, and a conscious approach to media and formats is becoming more important. Working together at a distance creates awareness of the value of personal, face-to-face communication. Personal meetings become more intensive. Choosing the right communication channel becomes a key factor in effectiveness.

Work-life blending is replacing work-life balance. The search for a balance between work and leisure was always fraught with conflict, because something always fell short. Where the boundary between working and private life becomes permeable, personal needs can be better taken into account over the course of the day. This creates relaxation and quality of life and can increase enjoyment of work.

The understanding of working time is also changing. It is seen less as a fixed weekly continuum and more as a flexible quota that adapts to individual situations and phases of life. In this context, shorter full-time work, such as the 30-hour week, is also being discussed.

Behind the statements on New Work lies a particular understanding of organisation based on modern systems theory. transformis understands organisations as complex social systems that provide solutions to problems in their environment.

By drawing a boundary, an organisation creates an internal space in order to ensure stable output despite external influences. The consequence is highly selective perception. Relevant changes are often not recognised early enough.

An organisation’s environments include customers, suppliers, competitors, employees, banks, the city or the internet. Which of these count as relevant is selected through frameworks of observation and evaluation. This selection is necessary in order to reduce complexity and remain able to act.

It does, however, have a downside. The established routines are geared to confirming the internal ideas about the environments and filtering out divergent impulses. An organisation sees what it sees, and as a rule it does not see that it does not see what it does not see.

Two conclusions follow from this. Appropriate leadership ensures the right amount of impulses flowing into organisational decision-making processes. And consulting is understood as a deliberate decision to counteract the self-referentiality of organisations.

This understanding has consequences for New Work. New forms of work only take effect if they reach an organisation’s frameworks of observation and routines. Methods that bypass these patterns confirm what already exists.

Culture is the complex of undecidable decision premises. These include basic convictions, beliefs shared as a matter of course, values, and ritual patterns of communication and behaviour.

These premises have a strong influence on the coordination of behaviour in organisations but elude direct, explicit influence. They take shape and change as collectively reproduced patterns emerge through the repeated experience of very specific standards.

Key players in particular influence these patterns through repeatedly displayed behaviour. Changes to these premises therefore cannot be set in motion simply by talking about them.

The right organisational culture is a decisive factor for a successful strategy and for a company’s capacity for innovation. Although culture shapes behaviour in organisations, companies are often not aware of their culture.

Studies from the 1990s, including those by Kotter and Heskett (1992) and Caldwell (1994), cited corporate culture as the most common reason for the failure of strategy and change processes. Failed culture change processes often lead to cynicism, frustration and a loss of trust in management among the workforce.

The “Global Innovation 1000” study series by Booz & Company (Jaruzelski, Loehr and Holman, 2004 to 2011) concluded that culture, regardless of innovation strategy, is a key factor for innovation success and that its influence on performance is measurable.

44 per cent of the companies surveyed there stated that their innovation strategy was aligned with corporate goals and at the same time supported by corporate culture. Over five years, these companies recorded a 33 per cent increase in enterprise value and 17 per cent profit growth. The then chief technology officer of 3M, Fred J. Palensky, is quoted there as saying, in essence, that innovation success depends more on culture than on organisational structure.

For transformis, this results in a clear yardstick: culture change is called for when the existing corporate culture limits organisational performance.

Christina Grubendorfer (2016) describes culture, in essence, as the set of rules of the game of a social system that are taken for granted and applied, and only enter awareness when they are broken.

The structure of an organisation results from two kinds of decision premises: the decidable, formal ones and the undecidable, cultural ones. What is undecidable shows itself in corporate culture, and what shows itself as culture is not decidable. These premises are like the proverbial elephant in the room: everyone sees it, but it is not addressed. They are decided, but not decidable.

According to Grubendorfer, one can speak of the corporate culture if a complex of expectations is meant. This does not have to be free of contradictions in order to take effect. A corporate culture is strong when decisions are strongly influenced by cultural premises. This is particularly the case where fewer formal premises prevail, for example in family businesses.

Nobody decided what culture a company has. Corporate cultures develop as if by themselves, behind the backs of the actors. Just as little as culture can be made or decided, it can be changed by order. It can, however, be influenced through interventions.

Culture always relates to experience, that is, to the past. It therefore has a preserving effect and can prevent innovation. Its evolution follows the pattern of variation, selection, retention. The social system does not find the best solution; it finds some solution. Cultural patterns do not emerge to achieve a goal. They emerge to meet unreflected expectations.

Culture is decisive for behaviour and communication in the company. It can be understood as a frame of interpretation, as a special grammar or as a set of implicit rules of the game that only become tangible when they are broken. The figure of thought of the game makes it possible to ask about rules, players, chances of winning and risks of losing, and emphasises the collective character of culture.

Culture is best observed in comparison with other organisations. The question is not whether an organisation has a culture. It is which culture it has and what distinguishes it from others. There is no such thing as a good or bad organisational culture; every company has its own “cultural fit”.

Culture is both a communication event and a communication structure. It does not take place in the heads of individuals. For employees, it is identity-forming. Anyone who has found an employer that matches their own ideas reacts sensitively to cultural changes and questions them critically, because they touch their own identity.

Only changes that are compatible with this identity are accepted. Anyone who likes working in a company and wants to stay will try to preserve the traditional rules. Cultural rules have a conservative effect. At the same time, corporate cultures solve problems that cannot be solved by instruction and formal structures, and they provide a frame of interpretation for communication.

Corporate culture cannot be changed by order. It is, however, possible to influence it. The starting point lies with leadership.

Leadership should first answer the question of which organisational challenges have to be overcome in order to achieve the strategic goals. In this context, one can ask how supportive or obstructive the dynamics of the corporate culture currently lived are. The insights gained in this way give rise to interventions that steer culture development in the desired direction.

A principle applies to the interventions themselves: it is always the formal structure that is worked on, not the culture. Anyone who wants to change corporate culture plays it indirectly, “off the cushion”. What is changed are decidable decision premises, that is, programmes, communication channels or people.

The culture then comments on these changes. How it does so cannot be predicted. This is what distinguishes culture development from a project with a plannable result.

A situational approach is therefore advisable. The effects of each intervention at the cultural level are observed so that the next step can be thought through afresh. Culture change is thus an alternation of intervening in the formal structure, observing the cultural reaction and deciding again.

For New Work, this means: a culture of self-responsibility, error tolerance or shared learning cannot be proclaimed. It emerges when decision-making channels, budget rules, forms of participation and appointments are changed and the organisation experiences that these changes apply.

The goals of a far-reaching organisational transformation cannot be achieved through coercion from within the hierarchy. Transformation demands sacrifice, commitment and creativity, and none of these can be forced.

First, it must be soberly acknowledged that an organisation’s existing energy is directed towards maintaining the status quo and established routines. The more optimisation and rationalisation there has been in the past, the fewer free resources are available for the transformation process. The existing goals and the personal interests of the actors linked to them additionally direct energy towards preserving what exists.

Foresighted self-renewal therefore needs a particular basic attitude. This includes confidence in the innovative power of the periphery. Most opportunities cannot be planned. They arise unplanned in places where one would not have expected them. Management must give chance a chance.

It requires the insight that new things arise from contradiction. Mistakes are valuable if they are systematically used to learn from them. Perfectionism is the enemy of the new. Unfinished ideas must also have value, and there needs to be a culture in which not everything has to be perfectly polished before it reaches the internal public.

Experiments and the possible failures that come with them must be permitted, provided that something is learned from them. Failing at something is allowed if it leads to new considerations and insights. New employees are an important resource for recognising needs for change and opportunities. Their otherness should be used deliberately as an impulse for change.

Leadership must see the need to observe and develop itself with regard to its effectiveness. Encounters with people from outside the organisation are desirable and important occasions for discovering blind spots.

Self-renewal takes place at the levels of variation, selection and re-stabilisation, and resources are needed for this. The process needs additional spaces and settings for communication so that selection can be designed appropriately.

Existing processes must be permanently and relentlessly optimised with regard to their value creation. At the same time, resources must be provided to enable innovation and creativity and then to realise them. This is what is meant by creative destruction.

What is needed is an attitude that permits this paradoxical allocation of resources: funds for the constant optimisation of existing routines and processes, and funds for discovering and realising the new. The latter relies on a pool of resources that only appears not to create value.

In order to discover and use its own opportunities for action, the organisation must not externalise the causes of and possible solutions to its unsolved problems, that is, attribute them to authorities it cannot influence. For all this, an organisation needs suitable communication structures and actors inside and outside the organisation.

The work of transformis is based on the findings of systemic organisational theory. According to this understanding, it is not primarily the people in an organisation who are the key starting points for observation and intervention. The starting points are the organisation’s established frameworks of observation and evaluation and the characteristic communication routines with which information is generated and condensed into decisions.

The so-called third mode of consulting differs fundamentally from classic expert consulting. Alongside the factual dimension of content, the social and time dimensions are taken into account on an equal footing from the outset, synchronised and integrated.

In the factual dimension, a task-related problem of the organisation is worked on in order to secure or further develop its performance. In the social dimension, the quality of cooperation and the decision-making ability of the team and of the wider communication process develop indirectly. In the time dimension, the course of the process is observed and shaped. Over- and under-steering are avoided, and acceleration and deceleration in the decision-making process are balanced.

The approach takes into account the high dynamics and self-referentiality of organisations. It takes up the resistance that change meets, and it bears in mind that actors in organisations do not only pursue organisational goals.

Added to this is independence from individual industries. It prevents the blind spots of focused industry experts from being brought in and allows perspectives and experience from other industries to be introduced. Industry-specific specialist consulting tends to give similar recommendations, which tends to intensify competition.

In the collaboration, all working sessions are facilitated and all results documented. Every session ends with minutes that all those present accept. Every setting is reflected on and evaluated and feeds into the preparation of the next.