Innovative work design as the key to competitiveness
Whether it is automotive manufacturers paving the way for electromobility or printing press manufacturers opening up new business areas through procurement platforms enabling print shops to automate the processing of all business transactions via a digital ecosystem, thinking in terms of hierarchies and classic line organizations quickly reaches its limits. A study by the Fraunhofer Institute, which was commissioned by VW to examine the consequences of the transformation, reached the following conclusion: “The technology-driven qualitative changes to work will probably prove to be greater challenges than the qualitative losses in work volume.” According to the study, this will also require a profound transformation of the corporate culture.
Agile work creates new demands on employees and the company organization
Many companies address the need to be able to react flexibly to market changes and new customer requirements by undergoing a transformation toward to agile work. This is characterized by an iterative approach involving new forms of flexible and interdisciplinary collaboration. Methods such as “scrum” are employed, and enable project plans to be flexibly adapted with regard to the times, functions or participants. In contrast, the classic waterfall method consists of predefined start and end points in each project phase. This accelerates development and processing cycles, and enhances the exchange of knowledge within the company. Continuously identifying errors serves to prevent products from being developed without regard for the actual market requirements. In HR, agile work offers an approach to strategic personnel planning for complex projects as part of the structural transformation: For example, utilizing transformation maps for the individual business units to identify the demand for specific skills and to plan further training accordingly. Agile work involves new challenges for employees and the company organization.
Goodbye command and control
For managers, this approach means letting go of the world of command and control with one person issuing instructions and clearly assigned subordinates and reporting channels. This requires no small degree of willingness to change among some managers when, for example, the head of department function is eliminated in interdisciplinary teams and their duties are instead distributed among the team members. Although the employer may still assign new tasks pursuant to the right to issue instructions, the employee’s motivation becomes questionable in this case. Therefore, companies generally rely on voluntary commitment and identify stakeholders who convince the skeptics with their positive experiences.
This raises a number of questions regarding the employment contract: For example, target agreements and bonuses that are based less on individual performance and more on project milestones achieved by the team. Or in terms of the job description: This needs to be worded broadly enough to enable the desired flexibility. Conversely, it also has to avoid being too variable and enabling an excessively broad assignment in the case of social selection.
Little agility in labor law
Remote work is a typical option for agile organizations. This context brings labor law to its limits as it regards the company as the employer instead of the overarching cooperation, and assumes a clearly defined place of work, fixed working and rest times. As such, employers also have to observe working hours, as well as occupational health and safety for remote work, as we have reported. It remains to be seen whether the new German government will address the trend toward new work at companies and enable greater flexibility, for example with regard to recording working hours.
Company agreement for the transformation
It is important to understand that agile work does not mean a lack of structure. Clear processes and responsibilities remain essential. Companies that conclude a company agreement for the transformation, while also orienting themselves on agile principles, have had good experiences. This serves to establish security in the complex agile environment. In combination with intensive communication via workshops, for example, this not only increases the chance of achieving high acceptance, but also enables the management, HR, works council and employees to develop a common understanding of all changes. Ultimately, cultural change can only succeed if the process is free of fear and the change process has positive associations because it focuses on learning new skills, for example. Employee representatives have extensive participation rights in almost every aspect of agile work. This begins with planning work processes to grouping systems and employee assignment, onward to qualification and further training for agile working methods or moderation and coaching instead of classic leadership.
As described in Part 2 of our series, new forms of work and production processes also generally represent a company change pursuant to Section 111 Works Constitution Act (BetrVG). Therefore, attempting a reconciliation of interests and creating a social planis crucial. Therefore, the most effective approach is essentially to compile a complete package and combine the company agreement with a social plan for qualification. When considering agile work, a company agreement needs to regulate the following issues:
- New work space concepts such as desk sharing and open-plan offices,
- the agile work organization with hybrid concepts that combine on-site work with voluntary or assigned remote work,
- flexible working hours or a results culture utilizing trust-based working hours even below the management level,
- interdisciplinary or intercompany work in flexible project teams,
- the definition of new requirement profiles and further training activities
- new team-oriented compensation models,
- talent promotion,
- With regard to working from home: data protection and protection of confidential information, health protection, occupational safety and risk assessment.
A guideline governing the transformation is also useful in companies without a works council to ensure that the staff identifies with the cultural change and is receptive to an agile mindset. This guideline needs to be communicated transparently and discussed with employees with the aim of developing a common understanding of new work.
The pitfall of pseudo self-employment and concealed employee leasing
Companies often include freelancers in agile teams, such as in software development. This creates the risk of pseudo self-employment, as it is difficult to draw boundaries to the work carried out by external employees. Freelancers are often unable to freely determine their activities to a large extent, and are subject to the instructions of the product owner in scrum projects, for example. Therefore, it is important to pay careful attention to how this is organized: Project managers, for example, may have technical but not disciplinary authority to issue instructions. External employees must be able to freely determine their working hours and leave. They must provide their own work equipment such as laptops.
Employing entire teams of external service providers, creates a risk of hidden employee leasing: Even project meetings to discuss the tasks to be carried out and how to approach these can represent integration into the company organization. Status or milestone meetings are permissible, at the most, provided that these remain completely free of instructions concerning the content, implementation, time and place of the activity. However, this causes major difficulties in practice.
Employees only develop an open, agile mindset if companies succeed in communicating transparently and alleviating the employees’ concerns or fears. Further training and qualification need to be a focal issue to ensure that the transformation process has a positive association. Well thought out company agreements create a framework for transformation. Ideally, these provide a secure foundation for all parties involved through structure and clear rules for the transformation. Pseudo self-employment and hidden employee leasing cause pitfalls when external experts participate in agile teams.