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A parsimonious model of the relationship between individual and organization.

“The individual human being is autonomous, i.e. he acts according to his inner values, his personal construction of reality, his world view, his motives and goals. He is a non-trivial machine, whose behavior is in principle unpredictable and cannot be controlled from the outside.” [1]

And according to Fritz Simon, this is precisely what is astonishing, the improbable: despite its autonomy, the cooperation of people in organizations succeeds. Together they assemble components to make automobiles, reach a consensus on political decision-making options, agree on complex technological services to be provided, in short: they coordinate their activities and rein in their autonomy to such an extent that interaction becomes possible.

There are innumerable economic models to explain how it comes about that organizations can function despite the will of their members; there are even behavioral economic models that break with the uniform and unrestricted premise of rationality, intelligent models so to speak. Designing another model was not our motivation. At this point, MORNING SUN deliberately narrows the conceptual perspective, reduces the complexity of the interplay between individual and organization to the real question, namely what happens when individual autonomy meets the purpose or value canon of an organization. In this way, the focus is shifted to aspects that revolve primarily around competencies and repertoires, but more on this in brief.

First of all, it is important to ask what is the key question at the point of contact between the individual and the organization. Fritz B. Simon again: “Every single person who contributes to organized behavior has had his non-triviality ‘bought’. He renounces the use of his unpredictability and he behaves on the basis of his own decision as if he were controllable and predictable. He adheres to rules of the game, although he actually does not have to.”[2]  The exciting thing about this perspective, and ultimately what makes it different from common theories about contracts or agreements between individuals and organizations, is the emphasis on the (temporary) renunciation of personal autonomy.

Here we are not talking about insight or reason or power, but about a trade that is valid as long as the “price” is right – which, however, more on this below, must be understood in a figurative sense. Here it is not, or at least not exclusively, about money, but about a chord in terms of sense and values.

Where the autonomy of an actor meets the raison d’être of an organization, the actor has the decision in his hands and can relate to the organization. He can be convinced by a company and its products and services, accept the price, and even be so convinced that he is happy to rein in his autonomy for the benefit of the organization. On the contrary, he may not be convinced at all, and reject the values of an organization and its purposes, perhaps because they do not agree with his values, or because the price (for giving up his autonomy) does not seem fair or just to him. In this case he is not willing to give up his autonomy. And of course he can behave indifferently, let himself be bought off from his autonomy, so to speak, “with a sense of proportion” and without commitment, and submit to the raison and rules of the organization without being affected by the purpose and values of the organization. The latter exists in the form of “mercenaryism”, or as waiting for something better to come along the way.

At this point we will introduce two terms that are essential to the way of thinking and methodology of MORNING SUN:

> Competencies and repertoires <

Competences are an expression of the autonomy of the individual. They describe how an individual lives his autonomy. Individuals possess competencies that enable them to play roles that are necessary for the repertoire of the organization. As a counterpart, the metaphor of the repertoire offers a rich projection surface – similar to Erving Goffman’s stage metaphor. An ensemble (organization) performs a play. The actors play roles according to their competencies (mimic skills, physicality). The plays that the ensemble can perform are its repertoire. Transcribed, repertoires are for the purpose and identity of an organization, its purpose, why it exists.

According to Weinert, competencies are defined as cognitive abilities that individuals have available or can learn to solve certain problems, and the associated motivational, volitional and social abilities to successfully use the available or learned problem-solving skills in other situations of a similar or comparable nature.[3] In our model, which is essentially based on the theory underlying KODE® and KODE®X, competencies consist of motivational, value-based (personal-ethical), volitional, and communicative factors in addition to professional skills and abilities[4]. Our definition of competence is helpful in order to be able to set a standard for situations characterized by uncertainty – such as the expansion of a company’s activities or times of upheaval and change: “Competences are mental or physical dispositions for self-organization, they include the ability to act in a self-organized and creative way and to deal with fuzzy or missing objectives and uncertainties”[5]. Competence is based on internalized values that make collective action possible. In the language of synergetics, internalized values are “order parameters”, i.e. they create orientation and commitment[6]. It is clear that this definition of competence, which attributes a special value to motives, values and will, goes far beyond the more functional definition of competence than technical skills, as it is predominantly applied in the Anglo-Saxon world[7].

Wikipedia defines repertoire[8] as a list or set of roles that a company is willing to fulfill. Whatever product or service a company offers, whatever is determined by its purpose, whatever processes a company skillfully employs – this is its repertoire. It goes without saying that repertoires are not fixed or eternally fixed. One of the most important characteristics of companies is to align their repertoire with customer needs and to develop it continuously. Repertoire is what an organization is able to do for its customers.

Take sustainability in financial services. For years, sustainable investing was a niche topic, a form of investment for a few and specialized investors. Sustainability was not necessarily part of the repertoire of a bank or asset manager. Clients who expected this could go to specialized providers. In other words, there was no need for the majority of financial service providers to have sustainability in their repertoire when making investment decisions.

This has changed increasingly in recent years. Today, in 2020, sustainable finance has entered the mainstream. And thus belongs in the repertoire of every financial service provider. However, it is not enough to package sustainability in advertising messages or simply to claim that sustainability has always been practiced. It requires competencies that are contributed by individuals.

MORNING SUN focuses on the actual interface, the point at which competencies meet a repertoire, and questions how competencies and repertoires interact.

Competencies = Repertoire

Competencies and repertoire are in balance when the ensemble can play the repertoire because the actors’ competencies are sufficient and there are no gaps. If an organization is able to deliver its repertoire, then there are no obvious deficits in performance, e.g. massive quality problems, declining employee commitment over longer periods of time, or an increased rate of industrial accidents in manufacturing companies.

In a balance of competences and repertoire, an organization is successful in business through performing repertoire. In the external perception (brand, reputation), the claim of the organization and the perceived reality (e.g. by customers, competition) correspond. In the personal encounter with the organization, customers experience committed and competent employees. Employee engagement is high because employees not only experience themselves as competent, but also because they experience that their competence contributes to performing the repertoire.

Competencies < Repertoire

When organizations have to expand their range of services and products under the pressure of customer requirements, or, as is currently the case in the financial industry due to massive regulatory pressure in the direction of sustainable investing, an effect often occurs that could be described as the “drawing board effect”: without an appreciation and understanding of the competencies available in the organization, management “orders” an expansion of the repertoire.

Senior management and strategic or business development, possibly with the help of marketing, conceive the expansion of the repertoire, design products or services that look good on paper and on 4C flyers, but which are fragile because of misjudgment in the conception and strategic planning: senior management presupposes or tacitly assumes that the organization has the competences necessary for the expansion of the repertoire. This may be a sign of overconfidence. On a strategic-planning level, anything seems possible, and amplifying effects such as group thinking, which are known from behavioral economics, are at play in determining the goals and feasibility among the involved persons and departments.

The new repertoire requires different or expanded competencies. If the demands of the repertoire are high, but individual competencies are not available in sufficient quantity, then the organization is overwhelmed by these demands. If management sets goals which employees feel and possibly experience in their daily business that they cannot be achieved even with effort and commitment – because they lack the necessary competences – then they are extremely demotivated.

Abstractly and simply spoken, there are two ways of fixing this: a difficult and a less difficult one.

The difficult way is to go back to the ex-ante state. To the relief of the “team”, the management recognizes that it was on a good path to overextend the organization. It is willing to make painful cutbacks in its repertoire (“what we had planned to do cannot be accomplished with our competencies”) and terminates all development work on the new service. This reversal requires an admission of failure from all those involved, above all from senior management, which can seem like a face-threatening act. In addition, behavioral economics research has shown that when investments and long-term projects are made in an organisation, the “sunk-cost fallacy” often takes effect: investments are continued in a project or plans because so much has already been invested and because no one wants to admit that the project or plan has failed under the threat of a massive loss of face. (That this does not have to be the case is shown by the culture in the business start-up scene, where it is a tradition to celebrate so-called “fuck-up parties” in which start-up entrepreneurs talk on stage how and why they failed. Fuck-up parties, however, seem to be an extreme form of celebrating and possibly glorifying one’s own failure – and usually ignoring the question of who will pay for the costs of failure e.g. investors.)

The easier and better way is the way of growth. Admitting that you cannot manage to expand your repertoire with available resources requires reflection and the courage to seek external supporthelp. The remedy is inorganic growth, i.e. the organization is looking for managers or experts in the market who have the skills to move the repertoire. The most obvious, effective, and (despite costly at first glance) cheapest solution is to call in an Executive Search consultancy who searches the market for the competencies that the company needs to expand its repertoire. By far the best solution is to analyze the competence situation before starting to expand the repertoire and to set up a structured and systematic search for competences.

If the organization does not solve the lack of competencies for the repertoire expansion, and seeks to wait and see, or – the classic approach – increases the pressure by increasing marketing and advertising expenses (instead of investing in competencies), then a situation is kept in limbo that is not economically sustainable for long and that erodes employee engagement in the long term. All those involved and affected know or feel that the new products or services are not making progress, and instead of – in a figurative sense – bankruptcy, i.e. all those involved and affected come together in a culture of acknowledging the efforts of all those involved, without reproach, or “finger-pointing”, a solution is postponed – into the future – not without making the actual solution even more difficult and expensive.

Competencies > Repertoire

There is a third, much more inconspicuous case, namely when individual competencies are present but not needed at all because the organization has no use for them, the repertoire does not require them or calls them up in sufficient numbers. Organizational psychology has coined the term “bore-out” for such situations, which describes that employees are underchallenged, disinterested or bored. It is not unlikely that employees who are underchallenged feel unappreciated or disregarded in their competencies and leave the company or organization. This is often referred to as “brain drain” in the relevant literature.

However, we believe that it is much more crucial that individuals are not recognized and acknowledged in their value-based competencies. Generally speaking, individuals have the desire to contribute to meaningful repertoires, e.g. in an organization with a high identification potential, e.g. social recognition or great attractiveness. However, when scandals and, as a consequence, multi-billion dollar fines from large financial institutions shape the social perception of financial service providers, the focus is usually not on how the individual employee at a bank might feel about the fact that the name of his employer is negatively slandered and that he may have to justify himself among friends and relatives to be employed at this scandalous bank. One could say that many financial service providers have paid too little attention to the ethical competence of their employees: Individuals in organizations not only want to know where the organization’s journey is headed and what their contribution to it is (these are the foundations of motivation) – they also want to see that the goals of the organization and their contributions are socially acceptable and reasonable.

[1] Simon und C/O/N/E/C/T/A, 2001, p. 63, translation by

[2] Simon und C/O/N/E/C/T/A, 2001, p. 63, translation by

[3] Weinert, 2001, pp. 27-8

[4] Erpenbeck and von Rosenstiel, 2007

[5] Erpenbeck, Grote, and Sauter, 2007, p. XII, translation

[6] Haken and Schiepek, 2010

[7] Heyse, 2010

[8] Wikipedia, “repertoire”, @, accessed 01 Nov 2020