Corvinus research: There is still a lot to do to make our businesses future-proof

Research leader György Drótos at the press presentation of the organization and management of the future research on Corvinus

The staff of the Institute of Management of the Corvinus University of Budapest conducted comprehensive research on the organization of the future and the leader of the future in Hungary, the first results of which were reported at a press conference at the university on Thursday. They were looking for the answer: what influences will affect the functioning of the organizations of the future, and how can they be successfully met? For this, the current management and organizational practices were also mapped.

 The results of the research

In the study entitled “The organization and management of the future”, 305 top managers of Hungarian companies with at least 50 employees and a turnover of HUF 100 million were interviewed in the spring of 2022 with a representative sample. The results of the research were summarized in ten points by the staff of Corvinus:

1. The organization of the future is now innovative and digital, according to the majority of interviewed domestic managers. At the same time, it is not necessarily flat, networked and knowledge-sharing – even though the international recommendations also include these.
2. In the minds of most respondents, the leader of the future is still more of a “lone hero” who manages the organization in a prepared and dynamic manner. On the other hand, international recommendations describe you as a team member who cooperates closely, is able to inspire others, is also familiar with the use of new technologies, and can handle complex situations and uncertainty.
3. The examined enterprises are also constantly changing, their organization is mostly shaped by their immediate environment, including primarily by the events of their procurement markets. It can be assumed that the impact of global turbulences (e.g. rising raw material and energy prices, logistical problems, dwindling natural resources) is also partially exerted through procurement markets.

2. It is a warning sign that, ahead of major international trends and crisis phenomena, the most influential factor in the wider environment, i.e. the factor requiring the most adaptation, is the changing domestic economic policy and regulation.
3. The examined enterprises can best adapt to external changes by further improving their current operations. Their managers consider their organizational skills, which require greater creativity and risk-taking, to be weaker. They consider joint value creation with customers (e.g. joint development) to be their least developed ability.
4. According to international recommendations, there will be few hierarchical levels in the organization of the future, and many people will work across organizational boundaries (e.g. remote work, assignment, hiring). However, these two characteristics of the examined enterprises are approx. half of it was not valid at all.
5. The self-assessment of the respondents paints a better picture of the digitalization of Hungarian businesses than what emerges from large international surveys. This may be related to the fact that due to COVID-19, businesses were forced to, but mostly successfully, apply new technologies, mainly communication. However, the more detailed answers also indicate weaknesses, e.g. the underdevelopment of the transformation culture, structured innovation mechanisms and dedicated organizational resources supporting digitization, but there are serious development opportunities for the extension of the work processes as a whole instead of the point-based application of automation.

8. The assessment of the digital culture of domestic enterprises is also colored by the fact that, although data analysis for business purposes as a new technology receives a lot of attention in the sample as a whole, regardless of company size, it is only the top managers of large companies who then typically make their decisions in a data-driven manner.
9. In contrast to companies that work exclusively for the domestic market, companies that are also active on international markets better correspond to the image of the “organization of the future” in almost all the dimensions discussed so far. The same is true for domestic enterprises that are mainly owned by foreigners. In our opinion, internationalization and future-proofing presuppose each other.
10. The investigation confirmed that the so-called transformational leadership style – in contrast to traditional transactional and “non-leadership” leadership styles – greatly contributes to the reduction of factors preventing change (e.g. resistance, low work morale), and also supports innovation and digitalization. Leaders with a transformational style – who, among other things, consider inspiring motivation, the idealizing effect (providing role models) and intellectual stimulation to be important – moreover, they feel their work is much more meaningful.

 Recommendations for managers of domestic enterprises

“Following the professional recommendations regarding the organization and its leader of the future is crucial for all businesses, even non-business organizations, but it is also critical for the national economy,” said György Drótos, head of the research, at the press presentation. The researchers formulated eight suggestions that the heads of Hungarian businesses should take note of:

• Train themselves and their fellow managers in the topic of the organization of the future and the leader of the future! Watch and follow the new organizational and management solutions of successful companies in their sector!
• “Flatten the pyramid”, and at the same time give more authority to direct work supervisors and mixed composition groups!
• Put more emphasis on the fact that their managers have advanced digital skills and become real team members who are both capable and willing to cooperate intensively both within and outside the boundaries of the organization!
• Strive to apply automation and other digital technologies at the process level and expand them throughout the organization!
• Invest in technological solutions that enable data-based operation, but also develop the organization’s decision-making culture in parallel!
• In order to successfully implement major changes, learn and apply the transformational leadership style!
• Consciously educate a new generation of leaders, whose members will naturally meet the above expectations of the future organization and leader!
• Preparation for the future should not be carried out in the form of individual actions, but in the framework of a carefully planned multi-year program! For this, if necessary, use the help of experts dealing with the topic both scientifically and in practice!