Why Agile Transformations Fail — Reason #1
This article is part of a 13-piece blog series published by Verena Zoehrer, innovation consultant at viable — innovation consulting and rapid prototyping.
Nowadays, many companies experience difficulties reacting to new circumstances in multi-faceted and rapidly changing environments. Technological innovations, unstable market conditions and changing customer requirements intensify the competitive landscape and increase the pressure on organizations. In the light of disruptive changes, fast and flexible adaption becomes a necessity and for this, organizational agility is perceived as the dominant vehicle. It definitely has a lot going for it, as it evolves most of its value by relying on people, asking for feedback, empowering self-organized teams and continuously delivering customer value. Derived from manufacturing enterprises, agility has gained interest from many industries facing the need for adjustment and adaption of strategic directions in order to survive.
However, despite the fact that agile organizations are desirable, they are hard to create and difficult to sustain. According to different research sources, failure rates of 60% of agile transformations or even 84% of digital transformations are named. McKinsey (2018) also stated that overall, 70% of organizational transformations fail to achieve their goals.This indicates that there are various challenges to overcome. In order to create awareness and support organizations, I want to present a series of 13 high-impact factors causing agile organizations to fail. Each month, one of the potential failures is uncovered.
Reason #1: “We want to become agile, let’s implement an agile framework/tool!”
One of the main reasons causing transformation failures is that most businesses still believe that in order to become agile, all they have to do is implementing an agile framework or an agile tool such as Scrum or Kanban boards. Although it seems self-explanatory to many people that an agile transformation requires more than a framework/tool, it is still reality that organizations underestimate the impact of the most important element of change, namely the culture. Being agile requires an environment based on trust and psychological safety. Working in small empowered and self-organizing teams, delivering customer value in iterations and asking for direct feedback requires a radical change in mindset and a change in behavior on all levels of the organization.
However, if the culture does not allow agility and its values to take roots, the company can never become agile. It seems that a cultural change is the fundamental base and therefore, the first step towards a successful transformation. I´ve talked to 19 highly diverse people, working in 9 different industries, who described the need for an agile culture as “the essence” for success but also “the biggest hurdle” to overcome and “the only one reason” why companies fail. Here are only a few quotes from these practitioners and agile experts, stating the importance of this topic.
- “Without the right mindset, and this also at management level, there will be no agility. So you need it in the essence, and you need to live it.”
- “There is only one reason (why companies fail), it is always about the culture. That is the main point why it fails. And that will always fail. (…) This is not about setting up any processes and introducing frameworks. That’s why I want to avoid the word implementation, because you can’t implement a culture, it needs to grow or mature. You have to water it.”
- “If you don’t live this from a cultural point of view, then you can only dance the rituals that you have seen somewhere, but that won’t help.”
- “I can implement a different organizational form or structure, and still live the same values which are visible through my behavior. But the change does not work, and that happens very often.”
- “The framework is not the point. It is actually the culture, how we work together. And this is for me the biggest problem. Implementing a new framework that´s the easy part and you can do it and you get some results. But if you want to go the next step then you have a problem because people are used to do things a certain way. There are unspoken rules within a company, some cultural barriers for example that you are not challenging your manager, or you are not speaking up. And these are the real problems.”
Although the influence of culture on organizational change has already been investigated by change management theorists in the 1980s, many organizations still underestimate the challenge. Stated simply, they are not aware of the significant influence of the culture on the outcome of the agile transformation. When looking at multiple definitions of organizational culture, it includes shared values, beliefs, rituals, specific languages, symbols and many more underlying assumptions that influence the employees’ attitudes and behavior. Also motivation and willingness to change are deeply rooted in the organizational culture and therefore, these cultural characteristics have the power to either accelerate or hinder agility.
Consequently, the cultural change is one of the key drivers for an agile development. It is a necessity to make sure that values, beliefs, and behaviors throughout the company are aligned with the values and principles of agility. It stands in need of a more holistic view to trigger a fundamental change in thinking and behavior enabling organizations to become agile.
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Schwartz, H. and Davis, S.M. (1981). Matching corporate culture and business strategy. Organizational Dynamics, Vol. 10 №1, pp. 30–8.
Schein, E.H. (1992), Organizational Culture and Leadership, 2nd ed., Jossey-Bass, San Francisco, CA.
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