Why do big and established companies struggle so much with agile work and culture?
I don’t know how you feel about this, but “agility” surely has become one of the management buzzwords of the recent years. That is not so surprising indeed. In particular, technologically driven change puts a lot of pressure on companies to become faster if they want to hold their ground in a rapidly changing environment.
Therefore, the trend has arrived also in the big companies and corporate organizations some years ago. And, not really surprising, many of them are rather unsuccessful in trying to implement those agile structures. When you take a deeper look into how transformation projects usually work in such companies, there are a number of patterns that you will find all over the place. Lots of trials and pilot projects are being launched. But many of them are doomed to failure right from the start.
Key issue: companies do not go the whole nine yards to create the conditions for real agility. At best, you could call this pseudo or quasi-agility. The fig leaf to claim you are working according to agile principles, so to say.
However, which factors cause real agility to fail — and what would be its consequences for companies? From my experience, I have outlined a couple of key issues and challenges that I see, that need to be tackled for “agile” in big corporate environments to become a success story.
The inevitable culture shock
In traditional large organizations, it is very common to get across opinions like “yeah, agile is great for startups run by whiskered hipsters with tattoos and purple hair but this is nothing for us”. People — and I fully comprehend why, having worked in large corporations for many years — are instead programmed to function in a culture that is centered on sticking to the chain of command and ensuring self-protection for having a safe ground in case of failure. People focus on having a justification that “it wasn’t my fault”.
Employees socialized in a tradition of tight responsibilities, rigid policies, processes and uniform methodology, naturally struggle with agile’s free-running methods. Which unsurprisingly bears the reflex of “agile will not work here.”
So hard to leave the old status entitlement expectations behind…
This one is a power play game. In a world of perk and status symbol thinking (my individual office, my corner office, my PA, my car allowance, … you name it) it is a tough challenge for managers to develop the confidence that granting their employees more decision-making powers.
A fear of loss of power and control is a nasty inhibitor for the success of agile work organization. The company must do everything possible to address these concerns. Agility does not work by means of control and hierarchy but by letting go of rigid such structures. It flourishes by letting go and granting trust in the employees.
Fear of the future… the extinction of executive roles
Agile structures require flexible, temporarily assembled teams without rigid leadership. Agile teams opt for leaders who — regardless of position or heritage — possesses of the best skill set and expertise for the respective challenge. This also means higher flexibility and better opportunities for different seniority levels. In one project, a more senior person might temporarily lead the team, in another one a more junior person, if the skill set and qualification make her or him the best fit.
In essence, this leads to an inevitable reduction of hierarchy levels and thus a large number of classic leadership roles and positions vanishing. Executives, as we know them today, will no longer exist beyond the management board. Not a great setting and outlook for established classic leaders who either have to adapt or move out. It’s a painful step and one — if not handled properly — a big inhibitor for a truly agile organization.
Personal and personality development is key — and those who are hungry and embrace it should be fostered
Agility as we favor it today, much more than the classic way of management, requires a fundamental rethinking and continuous personal development from all employees and managers. People, like businesses, are in constant need to disrupt themselves every few years or they become obsolete and are overtaken by more agile & ambitious characters. Lateral leadership, the elimination of status symbols and the demise of well-known and predictable career perspectives require a flexible and creative mindset. The required high degree of flexibility and personal responsibility thrive with the right level of intrinsic motivation.
It is key to identify naturally born leaders in the organization that are compatible with these requirements. It is also key to hire more of them and become a magnet for respective talent. Big corporations have a particular challenge since they a) oftentimes do not have enough respectively skilled people and b) are oftentimes deemed “too old school and boring” from the outside perspective and thus lack enough traction to bring in outside talent.
Agile should not be hampered in the end-to-end chain, or there will be struggles with resource and decision-making sovereignty
It’s no use if you introduce agile only “in those teams who do the actual development and delivery work”, but leave out the key decision-making levels and bodies inside the company. How are agile teams responsible for products and services delivery supposed to be better than waterfall when at the end of the day they continue to depend on the hierarchical decision cascade, in which weeks can easily pass before a request is finally approved or rejected.
When agile teams have no real decision-making authority and are not fully responsible for the allocation of capacities and budgets, you don’t fully leverage the principle. Let’s not forget, agility is not an end in itself but is a means for a mission to achieve faster processes, shorter innovation cycles and a healthier and more successful business.
Mismatch in output and performance review level — must shift from individual to team level
In a truly agile environment, the focus is on the team performance and output. Each specialist contributes her or his skills and competencies to the joint ambition. Ideally, there is a broad interdisciplinary mix of people with unique individual strengths. Naturally, the result is then a high degree of transparency when it comes to the performance of each employee and thus a healthy pressure for everyone to contribute their very best.
Big corporations as employers in the first place, have gone through many years of introducing performance-based salary components and had to invest quite some effort to establish these and achieve confidence on employee and works council level. All of this of course tied to the performance of the individual. So now, it’s the next level. In agile environments, only the output of the team is visible to the outside world. Annual targets and rigid KPIs no longer make sense on an individual level, thus variable pay and bonuses need to be tied to team performance. That is a cultural and procedural shift not easy to establish in big corporations.
So what do we take away from this?
For me it is, was has become my mantra in every aspect of my life: courage is what it takes to start with! If there is one thing that is a core enabler for success for individuals as well as organizations it is to be courageous. Courage, also for being open to learning from failure and adapt iteratively, opens the doors to decisively introduce and live agile principles.
- Top management courage and buy-in — from all board areas!
- Openness for a thorough organizational re-design — on all levels
- Culture change — open communication and failure culture
- Employee empowerment — foster internal talent and hire best-fit candidates
Also read on my personal blog @andrecramer.net
About the author: I am a digital transformation consultant helping my clients adapting to their organizations and people maneuvering thorough technology driven change. My specialties are digital communications & branding and digital/innovation culture implementation. I work for Detecon International GmbH and are an active member of our functional practice New Work, Ecosystems & Company Rebuilding.