Agility is the key to successful corporate change – Part 1

Life and work have become extremely fast-paced and turbulent. In times of industrialisation and stable economic conditions, a hierarchical organisational structure guaranteed success. This is changing fundamentally. Companies need agility. With increasing competition and cost pressure it was already necessary to rethink. “Lean” management was necessary, as introduced at Opel in the 90s.

But in times like these, companies quickly miss the boat if they don’t change and adapt to the new framework conditions determined by digitization. Agile methods, which go far beyond Scrum and Kanban, are needed to ensure flexibility and speed. These are spreading bit by bit from the software development to the companies. They are driving change in the digital age. Self-organisation, autonomy, collegial leadership and agility are just some of the terms that are becoming increasingly important.

But it is not so easy to shape the agile restructuring of a company. In our two-part series on the agile company you will learn more about the necessary agile change in organizations. Part one gives an introduction to agility and self-organization. Part two examines the demands on executives and companies that arise as a result.


Agile management methods are in demand

Markets are becoming increasingly dynamic and new technologies are being felt every day. The pressure on companies to innovate is increasing noticeably and the youngest generation of employees is also entering the labour market. At the same time, they are bringing completely new working and communication habits with them. All this creates a high degree of uncertainty in companies and makes planning difficult. Companies must therefore be able to react quickly and flexibly to market developments, some of which are unpredictable.

The organisational forms and sizes that arise as a result of these changes are sometimes very different. But there is one thing that underlies them all: they are supposed to strike a balance between necessary stability and flexibility. This does not mean that leadership becomes completely superfluous. There will always be management levels. Because even in the most agile structures, employees need a clear, common line and goals that they can work towards. Leadership will change into leadership and provide the right framework conditions. The hierarchies in companies will dissolve in the process. Therefore, the question arises how the balance between stability and flexibility can be achieved with the current structures.


What is agility?

But what exactly does agility mean? In order to make the transition to an agile company, you first have to understand what agility means, what it takes and especially where your company is right now?

The classic model, as it is still practiced in many companies today: There are clearly defined structures, strategies and processes. They are defined from top to bottom and the employees only execute. The central decisions are made solely at the highest level. In most cases, this group has clear rules and ideas as to how and by when they have to complete tasks. With a little luck, there will be a feedback loop from bottom to top. But this is the exception rather than the rule.

It usually takes several months or even years to get projects through and complete. And then suddenly a competitor was faster. The connection is missed. In order for this not to happen, a company today needs the ability to adapt its structures and processes to new circumstances at short notice. In connection with this, the employees need the freedom to decide on essential contents and procedures themselves. It needs both dynamism and stability. A new way of thinking and working is therefore indispensable. And this applies to the entire company. And that’s exactly what “agility” means.

Agile principles come originally from software development. But they are becoming more and more universal working principles. They are there to overcome the hierarchical separation of decision-makers and leaders and thus ensure increased reaction speeds. The whole thing is based on self-organized, autonomously acting teams that are as small as possible. The work cycles are short and packed into small packages. Orientation is provided by overarching problems that need to be solved as well as customer expectations and wishes that need to be fulfilled. Customer feedback is repeatedly integrated into the work and development process and worked according to their needs.


What does self-organization and autonomy mean?

In self-organized companies there is no rigid, hierarchical leadership. The teams lead themselves. Leadership is just no longer tied to specific people or positions. Everyone bears responsibility in the team, in their organizational unit. The tasks are divided into different roles. Who performs these roles and when is determined jointly in the team according to competencies, tasks and interests.

A survey in the USA showed that in many companies a large proportion of employees are not motivated. But unmotivated employees are poison for the company’s success. Self-organization and employee involvement can help. After all, those who have a free say in how, when and by what means they do their work feel taken seriously and are more enthusiastic about their tasks. This in turn has a positive effect on motivation and leads to significantly better work results. The team members are much closer to the customer and have the right insights to make the right decisions quickly and flexibly.

Companies like Spotify are living it up. Scrum was first introduced. But even the rules under which this largely agile method runs were too rigid for many teams at some point. Now they work in different, autonomous units. They are based on a common vision, mission and goals. The units are connected like a red thread. The management of the company determines which problems have to be solved. How, when and with which means this happens and how the units organize themselves – they can decide all that freely. The video illustrates this at https://www.youtube.com/watch?v=4GK1NDTWbkY

Important: Self-organization only works if the employees want to organize themselves. This form of organization must not be forced under any circumstances. In the second part of our series of articles on agile companies, you can find out how companies can make use of such opportunities for themselves and what demands they place on managers in particular.