The overstretched organisation - symptoms, causes and recommendations for action
The current social, (geo)political, ecological and economic conditions are not only pushing many companies to their limits, but increasingly beyond them. Pandemics, war, disappearing markets, supply bottlenecks, increased energy costs, digitalisation, shortage of skilled workers...
The way top management reacts to this in many cases means that organisations have been overstretched for a long time. Absenteeism, inner and expressed resignations are on the rise. The Gallup Engagement Index for 2022 makes this development abundantly clear: only 13% of German employees feel an emotional bond with their company and are involved with head, heart and hand. The remaining 87% have no or little emotional attachment and have therefore resigned, at least internally.
The resulting economic damage in 2022 was around 150 billion euros in Germany alone!
With our work, we would like to make a contribution to changing this! That is why this article deals with three central questions:
- How do you recognise that your organisation is overstressed?
- What could be the reasons for this?
- What are the ways out of the misery and what are the first concrete steps you can take?
Symptoms of an overstretched organisation
How do you recognise that your organisation is overstretched?
Die Anzeichen einer überforderten Organisation sind zahlreich. Nachstehend einige Symptome:
- Increasing sickness and fluctuation rates
- The majority of employees spend more than 4 hours a day in meetings
- Quality decreases, error rate increases or is constantly high, complaints increase
- Targets are not achieved or only with a long delay
- Direct communication, also across teams and departments, is decreasing
- E-mail communication has a significantly high share
- The culture of finger pointing is growing
- Changes are not supported or even actively undermined
- New ideas or suggestions for improvement decrease or are vanishingly small
- There is a gap between formal strategic orientation and operational doing.
Causes of overstraining
What could be the reasons for this overload?
We frequently observe the following causes:
- Companies are sticking to their growth strategy despite VUCA (Volatility, Uncertainty, Complexity, Ambiguity), a lack of skilled workers and managers, and the requirements to act in a resource-efficient way.
- Targets cannot be achieved or can only be achieved through unreasonably high additional efforts.
- Regular further development (seminars, trainings) is lacking because of the high workload. The level of qualification, especially with regard to new competences and requirements, is decreasing.
- For fear of not being able to meet the increased demands, (honest) communication decreases. Information and opinions are concealed, mistakes covered up, ideas withheld.
- Many leaders are overstrained with leading in crisis and therefore tend to constrict or sit out decisions rather than give space for creative, experimental and agile working. This lack of confidence in their own competence leads to a decline in team and organisational trust.
- The inner distance to the company increases because employees do not see that top management really recognises the changed economic, social and climatic conditions and aligns the corporate strategy accordingly. Trust in the established management is dwindling. The result is inner quitting.
- Prevailing understanding that digital and cultural transformations can be done alongside demanding day-to-day business.
- Lack of visionary thinking in top management: What do we as a company need to focus on in order to make an effective contribution to climate change and anticipate the tightening social and economic conditions (e.g. scarcity of resources)? Growth as before cannot be the answer.
- Wrong budget allocation supports the preservation of status quo rather than the radical change of business models.
- Increasing fluctuation and sickness rates are not responded to by adjusting targets and resources. The unchanged workload is distributed among the remaining staff. This in turn leads to more sick leave, inner quitting and fluctuation.
These points illustrate the urgent need for top management to move away from taking continuous growth for granted in a world of limited resources.
BREAKING THE SPIRAL OF EXCESSIVE DEMANDS
What are the ways out of the misery and what are the first concrete steps you can take?
The reasons for excessive demands already give an indication of starting points to break the negative spiral. We recommend the following actions:
1. recognise that growth cannot be taken for granted
Even if many management compensation systems are geared towards growth, a rethink must begin among executive boards, supervisory boards, shareholders. Growth is not "God-given", growth can be a result if a company understands how to solve concrete problems of its customers or society in an intelligent way.
Acknowledging this and also stating it out loud in the company is the first step towards changing something.
2. Recognise that transformation and change management take time and resources at all levels of the organisation and take this into account in the definition of goals and strategies.
In our experience, all companies undergoing major change and transformation processes should plan 30 - 40 % of their capacities, also in top management, to lead the change to success in a structured way and within a reasonable period of time.
3. Align goals and strategy with resources available in the company.
What can we realistically achieve with the existing capacities of our staff and by when? This coordination must become an honest dialogue. And it is not enough to only look at the existing FTEs, but the set of competences must be considered. For the number of FTEs, it makes no difference if an experienced colleague leaves the company and a university graduate succeeds him. For the expertise available in the company and the productivity, it can make a significant difference.
This also means that the area of HR controlling or "know-how or competence controlling" must increase significantly or be rethought.
4. Invest time in building trust
The first three fields of action actively contribute to building a culture of trust in the company, because employees and managers experience that they and the changes in the business environment are taken seriously. Nevertheless, it makes sense to actively invest time in building trust in the management circle, between hierarchy levels and in the teams.
Concrete measures that promote trust-building
Below is a list of various measures, small and large, that promote trust-building in companies. Top management and leaders can make a big impact by leading by example:
- Be honestly interested in employees and colleagues
- Listen attentively
- Conduct honest feedback dialogues on a regular basis
- Face 360° supervisor feedback and share the results
- Communicate openly and honestly
- Listen to the ideas of others and take them seriously
- Accept a "no"
- Maintain confidentiality
- Recognise successes
- Admit own mistakes
- Working together in the management team in a trusting manner
- Valuing diversity and promoting cooperation
- Participatory leadership
- Actively address irritations and conflicts
- "Dealing constructively with mistakes".
Companies that address the first four fields of action initiate the recovery of the organisation. Of course, there are other ways to reduce the company's vulnerability to being overwhelmed. These include, among others:
- Agree on appropriate implementation times for measures,
- Employ staff and managers according to their strengths,
- Offer an attractive specialist career in order to avoid that specialists have to take up the leadership career even if they are not suited for it,
- Schedule time for continuous professional development,
- Actively involve staff and managers in change.
5. Actively promote talents
Identifying, developing and retaining talent requires management attention, a concept and a budget. Above all, however, it needs managers who have time for leadership and are trained to recognise talent. It takes managers who have the courage to develop people according to their potential, even if these strengths may no longer have an effect in their own team but in other areas of the company.
In addition to the measures mentioned above, I would like to address another aspect that plays a decisive role if employees or managers are on fire or are burnt out. This is the aspect of purpose.
6. Expand the purpose of the company to incorporate the society dimension
From my point of view, it is an absolute must for companies to expand their corporate responsibility to include the societal contribution and to incorporate this centrally in their thinking and actions. The guiding questions are:
- What contribution do we want to make to society?
- What social problems do we want to reduce or solve through our actions?
- How do we have to position ourselves as a company today in order to pass on a healthy organisation to the next generation?
A central contribution to society is virtually obvious: being an employer for employees and managers that creates a healthy working environment through its culture and offers opportunities for development.
However, companies could even go one step further on the issue of social contribution and discontinue business models that harm or do not benefit society.
Example: What real problem is solved by 10 different hair shampoos or 15 different body creams that a company has in its range None.The question for such a company must be: How can we use the know-how and technologies we have as a company to benefit society and solve the problems of our world?
VUCA is both an opportunity and a necessity to rethink business models and organisational structures in order to make companies healthy
Neither for people nor for organisations is a permanent overload healthy. For both, this leads to collapse. The Gallup Engagement Index for 2022 makes it clear that the majority of our companies are not healthy and that employees and managers are permanently overstretched.
Companies that want to survive must change this reality. To do this, we propose five key actions:
- 1. Recognise that growth cannot be taken for granted
- 2. Recognise that transformation and change management take time and resources at all levels of the organisation and take this into account in the definition of goals and strategies
- 3. Align goals and strategy with resources available in the company
- Invest time in building trust
- Actively promote talents
- Expand the purpose of the company to incorporate the society dimension
If you run an overstretched organisation and are interested in changing that, please do not hesitate to contact us for advice.