The lifespan of organizations is getting shorter and shorter in today’s VUCA world. And it’s certainly not just because of the corona. The amount of regulation is only increasing and with it the control system becomes more complicated and expensive and more things go wrong. Less control therefore seems to be the solution. But is that true? And how does it work?
Today’s companies are living shorter and shorter lives. Everyone is aware of that. But why? And how do you make sure your business stays viable? We ask Professor Dr. Leen Paape RA RO CIA, Professor of Corporate Governance at Nyenrode Business University and Lecturer in the Accountancy & Controlling Lecture Series. Change is timeless, but complexity has increased. It’s in technology, in different business models and in increased regulation – you only want to work in a bank these days. Factors such as these together put the VUCA world prominently on the map. ‘
The world cannot be created
‘Auditors and controllers are trying to smooth everything out,’ Paape continues. ‘They are looking for models, techniques and norms that fit very well in a linear world. But is the linear world really there? To ask the question is to answer it. That the world is malleable, and one can know cause and effect, and therefore make it clear, that idea is deeply rooted in us and in the way we apply it to rules. We believe that you can regulate behavior with rules. It turns out to be disappointing. We think we can predict with data. But it is always based on previous data. And as the ad so aptly puts it: past experience gives no guarantee of the future. ‘
Looking for new life cycles
Controllers try to smooth out everything they are looking for models, techniques and norms that fit very well in a linear world
And so companies today are living shorter and shorter? Paape: ‘Many companies are at the end of the life curve. That means they have to look for a new life cycle. And that presupposes that you are aware of innovation. That you can learn. When you are adaptive, you can pull yourself out of the swamp. But it is very complicated. The world is designed in such a way that it is not exactly promoted. One sees many companies being overrun by young enthusiastic startups who can take steps faster and occasionally eat a business. Or erode it so that it ceases to exist ‘.
Awareness is important
So really solid. Either the companies do not see the ‘danger’ coming at all, or they see it coming, but do not know how to act. Are not innovative or not determined enough. How can you turn the ship around? Paape: ‘Be aware that there are different views. That the world cannot be made. That other things are needed to survive. ‘
“It’s not necessarily complicated,” the professor continues. ‘But it’s complicated in an existing business. The context is often set up in such a way (with rules, procedures and systems devised by yourself) that it becomes complicated to change. First of all, you need to be aware that you are looking at the world that way. And that it makes innovation harder. If you do not want it, you have to think about what you can do to seize new life opportunities.
Adjust the rules of the game, start experimenting
If you want to survive as a company, you have to innovate. So you have to change. Become more agile. It starts with the people first. “Changing people is complicated anyway,” Paape argues. ‘You must not want to change them, you must change the context in which they work. Adjust the rules of the game, give them more freedom. Make room for people to experiment. To make mistakes and learn from them. This is not the case in many companies. It’s okay to make mistakes until you make one. It is therefore also about a culture where you give people space and at the same time enable them to learn from mistakes. And in that way come up with new insights and ideas. ‘
You do not want to change people, you have to change the context in which they work
According to Professor Paape, it is not complicated, not new, but the combination makes it difficult. “In companies that have been around for a long time, there is too much in the way. Controllers are partly to blame for this because they are security seekers. They are looking for guidance, standards, fixed patterns, systems. This is inherent in their behavior, education, and nature. And that’s good, but not in any case. And the controller should be more aware of that. And finally learn to handle it better ‘.
If you look different, you see different things
So consciousness. And learn to handle it better. What should I do differently? Paape: “It is not so easy to answer. In any case, you should pay attention to the way you look at the organization. If you change the way you look, the case you look at also changes. Perception affects what is observed. Try it: If you look different tomorrow, you will see different things. If you consider whether there is another way to perceive, then you see other things. And then things will change. It’s a law. In a sense, change is also easy. Learn to see other things, thereby changing the things you see. It does not happen fast in the beginning. But small differences in the beginning can lead to big changes in the end. Compare that to a large flock of birds. If a bird in the cloud moves to one side, the whole flock moves in another direction. ‘
In the lecture series Accountancy & Controlling, organized by cm: in collaboration with Nyenrode Business University, the development within accounting & controlling and the changes in the field of expert teachers from different disciplines are discussed. The lecture series consists of 6 lectures. In a short time you will be fully informed and you will receive tools to get started yourself. Professor Dr. Leen Paape RA RO CIA is the speaker at the lecture on Control in a VUCA World; how do you do it? Click here for the complete program for the Accountancy & Controlling lecture series.