This is a joint blog post by Marc Stoffel and Hermann Arnold.
The Haufe-Quadrant is a magnifying glass on the current challenges of company leadership: In the first part of our series we outlined our reasons for developing the Haufe-Quadrant and where the employees play a role in this model. In today’s article we go into the different options for organizational control and what these mean for the company – depending on the employee profiles you have to deal with.
Companies between strong leadership and laisser-faire
The Y-axis of the Haufe-Quadrant draws your focus to the leadership structures in companies. Conventional opinion says that organizations are usually led in the classical, top-down manner. Management decides; employees execute: Business strategy, new products and markets or corporate goals. What doesn’t fit in this picture are organizational forms that are self-organized, in which employees take a lot of the decisions on their own initiative. Many call it utopian, but it’s still reality in a lot of teams and companies. In addition, a lot of traditional companies feel external pressure to become more flexible and agile – and because of this try out self-organized models.
Let’s take a look at the Quadrant
Depending on whether the organizational design is controlled intensively by means of management control instruments or whether the employees get to play a part in shaping the company’s strategic direction, the Haufe-Quadrant has four different organizational forms: Command and control, “shadow” organization, agile networks and overstretched organization.
Command & Control: The captain is always at the helm
Thinking at the top, doing in the ranks. We are all familiar with this tried-and-true management style, with a strong leader at the top and rigid hierarchy. This management style emerged in the course of many decades and for many years it was a guarantee of high productivity and great prosperity.
The task force from the “shadow” organization
If structures are too rigid and are not considered appropriate, employees withdraw into a “shadow” organization, where they pursue their own agenda – without knowledge and without – clearly the goal of the exercise – the direct influence of their superior. Interestingly, even managing directors resort to “shadow” organizations: When there’s a crisis somewhere, for instance, a task force is called up, staffed, not by employees who occupy decisive roles in the organizational chart, but by people who management knows that they will get the job done and make the problem go away.
Overstrained organization without leadership
With digitalization came change: The rapid pace of change and the emergence of new business models mean companies work furiously to get more agile. Whole hierarchical levels disappear; employees are supposed to organize themselves and be flexible. But what happens when employees are great “do-ers”, but not so great strategic thinkers? If there is no longer a boss to tell people what to do, and to make decisions, employees have to invest a lot more time and energy in coordinating with their colleagues in order to reach a consensus – that takes a lot of strength and can initially stretch people to breaking point.
Agile networks directed by the actors themselves
In every company there are teams who are already operating to an outstanding standard as agile networks. Employees take advantage of greater freedom of maneuver in order to take decisions in a self-organized fashion and to take responsibility for effective completion of their own projects. In this case it is really important that structures, rules and rituals are developed in order to facilitate appropriate decisions and labor division.
Where is my company situated in the Quadrant?
Many companies are tempted to answer that exciting question of where they would place themselves in the Quadrant by pointing to one of the possible organizational forms. But we are convinced that in every company all the forms exist side by side. Some areas work better with Command & Control, some teams perform better as agile networks and there are also some employees who operate in “shadow” organizations or who are overstretched. So companies should see themselves as an ellipse in this Quadrant, which marks the trajectory of a wide variety of situations in all four zones of the Quadrant.
If you think about your company, would you agree? Do all four organizational forms exist in your company, too?
Company leadership between light and dark
Next week: Read here in the third part of our series: Every company is an ellipse in the Haufe-Quadrant. But we can support all segments of the ellipse – and how do we see these segments, anyway?
Marc Stoffel –
Photo Credit: Matthew Wiebe via Unsplash