Old management practices prove to be a burden for productivity and meaningfulness of work

As working life becomes more and more complex, organisations must find new work practices and alter their understanding of leadership and management. According to research at Lappeenranta University of Technology (LUT), progressive companies have had a positive influence on well-being at work and productivity when they have altered their work and management practices.

Trendsetters in management have knowingly abandoned many traditional management practices and replaced them with new more community-oriented practices. Hierarchies have been minimised in these companies, and a significant amount of responsibility and power have been divided among employees. Important matters are discussed together and decisions are made more independently. Employees do not consult management in all matters, nor search answers from the process guidelines.

These companies do not aim to maximise the efficiency of their activities or their financial performance. Rather, there is a prevailing belief that good financial performance is the result of an employee being given the opportunity to take on responsibility and influence matters of key importance to the company in a way that is meaningful to the employee. These trendsetters are often the most profitable in their field. There are also other effects related to independent employees, who manage their own work and take on responsibility. This increases the well-being of employees, because they feel their work is meaningful and that they are an important and equal member of the work community.

"There is still a prevailing hierarchy-based view of management, according to which employees have been instructed to comply with carefully pre-planned work and the performance of employees is controlled. This type of management-thinking, which aims at the efficient utilisation of resources, is less and less effective in today's workplace," says Postdoctoral Researcher Sami Jantunen, who has conducted the research. 

Independent employees make an organisation more adaptable. In the continuously changing working environment, instead of planning and controlling work, management should establish an enabling environment in which employees can succeed and flourish, while working to achieve important targets for the organisation.

However, an organisation cannot function with no guidelines and completely on a whim. It is important to support collective sensemaking when considering the organisation's objectives and goals. Activities can also be steered with rules of thumb that support decision-making in any given situation. This type of new management-thinking is especially prevalent in digital service companies, such as Supercell, Reaktor and Vincit.

Mr Jantunen emphasises that achieving change is possible although not simple. It will require a contribution by both management and employees.

"Management should critically view the organisation's current practices and remove structures that prevent employees from taking initiative. If employees are managed and treated as machines, they will also act like machines."

In order to achieve change, also the thinking of the employees need to change.. This cannot be achieved by forcing but by facilitating. This, in turn, will require patience from management. Most likely, new work methods will first take shape in small progressive groups from where the most successful practices will be established in time as common practices throughout the organisation.

Research on new work methods and their effects on the meaningfulness of work and productivity has been carried out in collaboration between LUT, VTT Technical Research Centre of Finland Ltd, and JAMK University of Applied Sciences. You can read more on the research and its results in Finnish at http://www.vtt.fi/inf/pdf/technology/2016/T269.pdf .

More information

Postdoctoral Researcher Sami Jantunen, sami.jantunen@lut.fi, +358 40 502 5071