Aalto University is a new innovative university that merges science and technology, design and art, business and economics. Aalto University’s name pays homage to the life and work of world-famous architect Alvar Aalto. Aalto University’s background esteems three respected Finnish universities. One of them is Aalto University School of Business, which moved into its present premises on Runeberginkatu in the centre of lively Helsinki in 1950. Here in this historic building works Professor Kristiina Mäkelä, Vice-Dean for Teaching and Learning, with whom we are going to discuss the future work and leadership of business technology organisations.

THE FOURTH INDUSTRIAL REVOLUTION

Professor Kristiina Mäkelä’s office is cosy with a large wooden office desk at the one end and a low coffee table with four soft armchairs at the other end. The friendly discussion begins with brief intro­ductions and professor Mäkelä explains that her interest is in human resource management and leadership. In addition to teaching and operative management of the faculty, her research focuses on people-related issues in multinational corpora­tions, including those concerning human resource management, knowledge and interpersonal interaction.

Professor Mäkelä points out that we are now liv­ing in really interesting times and the fourth indus­trial revolution is changing our whole society and the way we work. She explains briefly the three previous revolutions to understand the current and ongoing change.

Kristiina Mäkelä – Professor, Aalto University School of Business

The first industrial revolution took place at the end of the 18th century in Europe and America when the steam engine was first developed. It was a pe­riod when work itself changed dramatically and for the first time, work and other areas of life were separated. Artisans and farmers found new jobs in factories and at the same time the management function of the work was also established. Facto­ries and their management also started to meas­ure work time and working hours were formulat­ed. The change didn’t happen overnight, but in quite a short period of time.

The second industrial revolution, only less than 100 years later, was related to electricity and the usage of electric power. Ford and other large companies began mass production and within society horses were slowly replaced with cars. Taylorism was invented and organisations contin­ued to measure workers, but put even more focus on individual performance and tried to increase workers’ efficiency step-by-step. At that time tasks of individual workers were controlled and steered more and more from the outside, which is still true in today’s working life.

The third industrial revolution, or sometimes called the Digital Revolution, began when computers were invented. This was a period when knowl­edge work started to replace factory work in developed countries. The fast development of information and communications technologies and internet speeded up the change in ways of working, yet the management function remained pretty similar to previous decades’ professor Mäkelä describes.

Today we are facing the fourth industrial revolu­tion that once more changes how we understand the concept of work. The drivers of the fourth in­dustrial revolution are digitalisation, globalization, automatization and robotization. Profes­sor Mäkelä reminds us that again some work will disappear like in the previous industrial revolu­tions, but also new jobs will be created.

Today work time is still mainstream and people often work from 8 am to 4 pm, Monday to Friday and have certain holidays off work. This relationship of work and other areas of life is slowly breaking down and coming loose. In some jobs, especially in knowledge work, this can be seen already.

Professor Mäkelä believes that traditional work time will in some cases disappear. The disap­pearing of work time will also blur the bound­aries of worktime and free time and that’s why many organisations are already today talking about work life balance. The focus is still on how workers balance work and free time, but profes­sor Mäkelä predicts that in the future, we will go back to a kind of pre-industrial era with work and life seamlessly integrated to each other.

New communication technologies have in pre­vious industrial revolutions sped up interaction between people and now we are seeing this hap­pening again. Instant messaging is one example and most of communications and interaction is already happening in real time. Technology not only enables faster communications, but also opens new possi­bilities that haven’t been possible before. Professor Mäkelä says that it is truly interesting how the future of work will develop when emerging technologies like virtual reality makes a break through.

DIGITAL NOMADS AND MODUS OPERANDI

The fourth industrial revolution separates work and free time, but also releases jobs from the work place. Already many knowledge work­ers choose to work from home or from shared co-working offices. Development of information and communications technologies has made it possible for people to choose their living style not based on the work available in a certain area, but with other preferences in mind. In the near future, more and more people will have the possibility to work and live wherever they like. Soon where people live will be a choice based on friends, relatives, hobbies or even climate. Professor Mäkelä says that this will be a great opportunity for countryside towns that are now losing workforce to major cities.

She continues that in the next 10 to 20 years, this trend will develop further and become more mainstream. Digital Nomads is one new phe­nomenon that we haven’t seen before. Professor Mäkelä explains that Digital Nomads are often knowledge workers or freelancers that can work basically anywhere in the world. This is still a small but growing group of people that work on­line and travel from place to place. For example, digital nomads can work summers here in Finland and move to Thailand for the cold winter months, because it is inexpensive and the climate is sunny and warm.

On the other hand, workers’ knowledge and experience is no longer linked to work location either. Traditionally everyone has worked in the same location. In coming years, we will not need to work in the same location as our teams or with people whose knowledge or input we need to finish our work tasks. People and information are separated from the work location. This devel­opment also forces many workers to learn new competences, for example network management skills. Professor Mäkelä states that this has a great effect on both the work itself, but also to the man­agement of the work.

At the same time, global team work will increase. One reason is that competition for the best talents will increase and companies are forced to look for new people more globally. Professor Mäkelä says that large global organisations use these kinds of global teams already. Suitable Modus Operandi, the way we work here, supports digital nomads’ mindset and is one way to engage them.

It is very likely that more and more organisa­tions will adapt this un-hierarchical model and replace strong silos with talented expert teams. This doesn’t mean that all teams must be self-or­ganizing, but the way tasks are separated and managed comes through teams. Professor Mäkelä highlights that the team mindset flattens organisa­tions and work can be done even in virtual teams via modern communication technology.

TAKEAWAYS FOR BUSINESS TECHNOLOGY ORGANISATIONS

The very first step for any organisation that wants to exploit global or non-location based teams, is to focus on organisational culture. Professor Mäkelä states that the organisational culture is the glue that makes teams successful and organisa­tions need to define values that supports remote and flexible working.

Before organisational culture can be transformed, it is important to understand the different lev­els of organisational culture. Professor Mäkelä names former MIT professor Edgar Schein, who has done a great deal of research in the field of organisational development. Based on professor Schein’s research the most visible level of culture are artefacts, that part of the organisational cul­ture that can be seen. For example, how people dress and behave. The second level of the organi­sational culture is espoused values, things that are written or said. For example, strategy or mission statements on the organisation’s web page. Es­poused values define what the organisation wants to be in the future.

The third and the least visible level of organisa­tional culture is things that can’t be seen. These things are taken for granted. Professor Mäkelä explains that the common beliefs are more like assumptions on how the world works, what kind of actions leads to correct results and how things should be done. These assumptions feel so obvi­ous that you don’t even think about them. One of the only moments when people notice these tacit parts of the organisational culture is when they change jobs or move to a new country.

All three levels of organisational culture need to be evaluated if change is needed and this is a dif­ficult thing to do. Professor Mäkelä points out that often it doesn’t help to make new organisational structure if people believes on the deepest level of the organisational culture doesn’t change.

Professor Mäkelä’s magic formula

Instead of giving a list of one-fits-all tricks to change organisational culture, professor Mäkelä gives her own “magic formula”. The formula’s trick is to always take one step backwards and first define the organisational or team level target and vision. The vision can be as simple as, how are we going to win the markets, or what do we need to achieve in the next 6 months.

After the target is crystal clear, take another step back and define what the organisation or team needs to know, and master it to achieve this goal. Professor Mäkelä says, that if we just begin with the methods, we use time and energy to wrong actions, when we are not crystal clear on what exactly we are trying to achieve. Finally, make an action plan that includes clear list of mindset, skills, knowhow and wanted, but also un wanted behaviour.

Only after understanding why people act a certain way can their behaviour be changed. Of course, in this kind of situation top management need to find ways to create a culture of knowl­edge sharing. The only magic of this method, is to first ask why and only after that try to fix the spe­cific root causes, professor Mäkelä summarises.

Another barrier that many organisations and lead­ers face when the world’s clock speed increases, is determining how to make a team or organisa­tion work faster or in a more agile way. Professor Mäkelä advises that one good way to add agility is with continuous improvement. Instead of a big bang change, change incorporating many small and sequential steps is better. She reminds us that it is important to try, sometimes fail, but constant­ly learn what works in each situation. It is also better to improve in cycles when you don’t expect the final target to be reached in the very beginning.

The second step for organisations that want to en­hance organisational culture is to support the right mindset. Professor Mäkelä takes two different examples, performance culture and mastery cul­ture. Performance culture is based on competition. The mindset of the performance culture guides people to compete again each other and that leads to internal competition and sub optimizing. In a performance culture, individuals try to present themselves in a better light than their colleagues.

She continues that, mastery culture, like perfor­mance culture, aims ambitiously to achieve great performance and results, but the mindset is differ­ent. The mindset in a mastery culture is that I am better today than I was yesterday. In this mindset, the performance reference point is completely dif­ferent than in a performance culture. Single teams and whole organisations perform better when the organisational culture and mindset is moving towards a mastery culture.

The leaders should focus their energy to reduce internal competition and promote behaviours that lead to a performance culture. Professor Mäkelä reminds us that it is completely normal for humans to compete, but the leaders’ responsibility is to focus the competing reference point outside of the organisation. The key question is how we, as a team or organisation, can together be better than yesterday? This mindset and leadership style add agility and self-organizing. It also indirectly reduces bureaucracy compared to situation where people only look for their own advantage.

To summarise the inspiring discussion, professor Mäkelä underlines the fact that there is no single correct way to lead organisations that works in every situation. The smaller the organisation the easier team based culture can be put into prac­tice. Researchers have estimated that a group of 150 people is the limit for when everyone can know everybody and it is a natural kind of clan.

Instead of general best practices, leaders of or­ganisations or teams should look for weak signals and early indicators of what works and what doesn’t. Validate assumptions early and change the method if necessary. This culture of experimen­tation can be also used in leadership. Leaders need to have a growth mindset, constantly ques­tioning their own assumptions and focusing on continuous learning. And leaders need to directly and indirectly communicate what do we do here and what is important. Leaders need to explain also what we assume that leads to success and what are values and culture we care for.

At the end professor Mäkelä reminds us that tradi­tional top down management doesn’t often work in this kind of team based organisation. Manage­ment power that needs hierarchical structure is not suitable. Leadership of teams need to be about orchestrating work, like a band master, that gets different instruments to play well together. In a team organisational power is related to knowhow and skills, not position or title.

Takeaways

  • Focus on organisational culture.
  • Determine how to make a team or organisation work faster or in a more agile way.
  • Take an enabler’s role to facilitate teams.
  • Validate assumptions early and change the method if necessary.

The author is Timo Savolainen.

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