Friederike Euwens is an organizational psychologist and, with her company AllesRoger, she facilitates the human side of digitization. As New Work Facilitator, she accompanies organizations through the process of finding their own unique approach to New Work – for instance with agile coaching and sparring offers on the topic of “self-organization”. In her work, she relies, among other things, on effectuation, a method that offers important leeway during the Corona crisis. In the course of our current series on „Resilience“, we asked Friederike how companies can move from shock paralysis into action.
„Effectuation helps you to shape the future through conscious action, rather than letting it take you by surprise.“
Dear Friederike, in times of great uncertainty, traditional management methods are increasingly reaching their limits. Organizations must become more agile, more proactive, even when the results are not clear. For several years now, you have been working with the Effectuation-Method, an entrepreneurial approach that focuses more on the PRESENT circumstances, rather than looking at what might happen in the future. So, are companies flooding you with requests right now? Or better: should they be? How can even established companies use effectuation to get through the crisis?
After a short state of shock, we are actually receiving more and more inquiries from companies that specifically want to tackle the topic of “effectuation”. Before Corona, this was more of a niche topic. But at this point it is pretty clear to everyone that action is necessary, even in uncertain times. Effectuation is about „driving by sight” and making decisions in great uncertainty. Because who knows what the Corona case numbers will look like a month from now, what measures will be in place then, and how things will continue after the acute phase of the crisis is over? Therefore it is not possible to formulate clear goals or to think in terms of results. Rather than letting the future take you by surprise, effectuation helps you to shape it through your conscious actions without having a forecast, a plan, or similar at hand. The focus is on your resources, knowledge, and partnerships. In an experimental learning process, also known as trial and error, new ideas and skills are generated, which in turn lead to new business opportunities and ideas. Especially in times of crisis, effectuation helps you to take the next step without risking your neck or falling into a tailspin. For example, when projects or orders get canceled, the time is right for restructuring since the day-to-day business does not get in the way. But effectuation also comes in handy if a company has an enormous increase in turnover as a result of Corona. Perhaps the delivery of services or products couldn’t be scaled fast enough, making partnerships and networks extremely important. In this case, effectuation can be helpful on all levels of the organization.
„Great first steps are those that bring about instantly noticeable change for all employees.”
The method is typically used in connection with new business formations. Prospective entrepreneurs use it to start up their business independently and with as little risk as possible by making use of existing resources and tapping into their network. Established companies have the huge advantage of already having their most valuable resource at their fingertips: their employees with all their diverse talents, experiences, and needs, who invest their time and creativity into the company. How can companies make even better use of their “treasure”, especially in uncertain times?
The best way to make use of this “treasure” is to allow employees to make their own decisions, contribute and network as they please. This way the “treasure” does not have to be uncovered but will present itself on its own. Companies, that have not been fortunate enough to become self-organized or to be working in agile structures, can take the first steps in this direction now, at the latest. It is important to find a goal beyond the goal. This means it has to be clear to everyone why a restructuring is taking place and what the ultimate goal is. This way you don’t hold on to old structures, but together develop in the direction that is most beneficial for the company. Here effectuation comes into play yet again because the company is best served by the following approach: We know we have to change something and want to achieve goal XYZ with these changes. At the same time, the path is not set in stone, and the next steps can be well planned and undertaken with the existing resources, which in turn opens up new opportunities. Great first steps are those that bring about instantly noticeable change for all employees – such as, for instance, working from home. To take next steps towards more self-organization, topics such as finding a purpose, creating room for experimentation and a culture of failure become relevant.
You come from a scientific background and incorporate scientific perspectives into your work as an organizational developer – for example, psychological viewpoints. What mindset do organizations need now in order to position themselves well for the future? What makes companies mentally strong?
There are three other scientific research concepts that I find to be very helpful in dealing with uncertainty. These include the „Growth Mindset“ by Carol Dweck, the „8 Design Principles“ by Elinor Oström, and „Complexity Leadership“ by Mary Uhl-Bien and Russ Marion. The „Growth Mindset“ is about being allowed to make mistakes in a safe environment. If I only start something new when I am sure it will work, then it isn’t new and I won’t even start if I feel uncertain. The „8 Design Principles“ point out that having a guiding principle is important in uncertain times. A common purpose is one of those principles. Transparency and openness allow every team member to be informed about available resources. „Complexity Leadership“ emphasizes that everyone involved should know what is going on and what the context is. In addition, research shows (and this coincides with my personal experience) that it is very important to create room for encounters and informal exchange so that new ideas can form. All methods have one thing in common: in uncertain times, it’s best to drive by sight.