Picture: What benefits does a partially agile organization bring when the rest, including the management, does not embrace agility?
Welcome to the age of uncertainty
In today's business world, we find ourselves in an age of constant uncertainty. Companies and markets that were accustomed to bringing products to market on an annual basis with 5-year plans are changing rapidly. Where hardware used to be delivered just yesterday, today a new software release is pushed with the click of a button. Technologies are evolving, customer demands are ever higher, and the IT systems behind them are more complex and volatile than ever. Attempting to plan business developments based on limited or unknown market assumptions, with solutions based on complex IT systems and ever-changing customer needs, has become an impossible task. In this scenario, companies with agile overall organizations have an advantage. Typically, this is the inherent organizational structure of many startups. They can respond more quickly to new circumstances and develop innovative solutions.
In the industrial age with physical products manufactured for stable markets with clear demand, making investments was straightforward. The focus was on good planning, selecting the most efficient production methods and resources, thus maximizing investments.
Software development has become more agile in many companies, but what about the rest of the organization?
Software development in many companies has moved toward agility in recent years, which means that teams in this department use agile methods like Scrum or Kanban to promote iterative processes and continuous feedback. However, often this agility remains confined to IT departments and has limited influence on the rest of the organization, such as marketing, sales, and finance.
A concrete example of wow to release the agility brake in organizations is a company's marketing department. While software development works agile, the marketing department may continue to adhere to traditional campaigns planned months in advance. This discrepancy between agile software development and traditional marketing practices can lead to problems, as marketing messages may no longer align with current product developments.
It's important to recognize that agility should not be limited to IT departments alone. Companies should strive to extend agile principles and methods to the entire organization. This often requires a cultural shift and a willingness to rethink established processes and mindsets to promote agility throughout the organization. This is the only way to ensure that the various departments of a company can effectively collaborate and adapt flexibly to changing requirements.
In times of uncertainty, one thing an organization must become is in symbiosis from A to Z with its environment and respond to influences.
Embrace uncertainty and make it your friend
In times of uncertainty, it is crucial for an organization to not only be flexible in its internal processes but also to be able to adapt in real-time to influences from its environment. Such adaptability allows an organization to act in symbiosis from A to Z with its surroundings and respond appropriately to external changes and challenges.
An excellent example of this adaptability can be seen during the COVID-19 pandemic. Agile companies quickly and effectively responded to the constantly changing conditions during this time. Retailers adjusted their distribution channels by increasingly focusing on online sales and delivery services. Restaurants introduced delivery and pickup services to meet their customers' needs. Office work was largely shifted to remote work to meet the new requirements. These rapid and flexible adaptations allowed agile organizations to successfully face the challenges of the pandemic.
The ability to adapt to external influences is, therefore, a crucial success factor for agile organizations capable of quickly adjusting to changing conditions and continuing to operate successfully.
Those who must make solitary decisions in an ivory tower, rather than relying on experiment-based "credible guesses" based on data, are either magicians or completely detached from their market.
When innovations come from the front/base
The challenge of bottom-up innovations is gaining increasing relevance in a time when they are becoming more important. This presents new challenges for management and requires a reevaluation of traditional approaches based on classical authority and centralized planning.
A concrete example illustrates this change: employees in product development may have innovative ideas that have not been recognized by the leadership thus far. In an agile organization, such ideas are encouraged and implemented in pilot projects to test their feasibility. In this way, bottom-up innovations can lead to successful products that drive the company forward. This stands in stark contrast to a rigid hierarchy that may have blocked such ideas. This example underscores how traditional authority is questioned when innovative impulses come from the grassroots.
In a time when bottom-up innovations are gaining importance, companies must be open to new approaches and willing to rethink their hierarchies and processes. This allows for the promotion of innovative ideas and approaches from across the organization and ultimately achieves competitive advantages that would not be possible with traditional top-down thinking alone. It means shifting from the classic hierarchy to a culture of openness and collaborative shaping.
Leading "credible guesses" through validation in best practice
Agile organizations rely on data-driven decisions and continuous process improvements. A fitting example of this is an e-commerce company that regularly conducts A/B tests to determine which version of its website achieves a higher conversion rate. The decisions the company makes are based on the results of these tests, leading to continuous optimization of the website.
The idea behind "credible guesses" is that companies should not rely on mere assumptions when it comes to strategic decisions. Instead, they should use valid data and best practices to guide their actions. In the example mentioned, this means that instead of making assumptions about which website version might work better, concrete tests and data are used to make informed decisions.
In summary, it is clear that agility should not be limited to software development. It should extend to the entire organization by promoting data-driven decisions and continuous improvement in all business areas. This allows companies to respond more flexibly to changes and continuously improve their performance.
Conclusion - How to release the agility brake in organizations
A successful agile organization is characterized by agile thinking and actions being firmly embedded from top leadership to the base. This means that the entire organization can adapt flexibly to its environment, continuously make experimental decisions, and optimize them through regular validation and improvement.
Senior leadership plays a crucial role in promoting and demonstrating the agile mindset. It is about quickly responding to changes in the environment, having the courage to learn without fear of mistakes. The organization should be open to experimentation and make decisions based on data and insights rather than relying on pure assumptions or traditional planning.
Regular validation and improvement of processes and strategies are essential components of this approach. It involves constantly reviewing whether the decisions made are delivering the desired results and making adjustments as necessary. Only through this can an agile organization be successful in a world of constant uncertainty and ensure long-term success.
In short, a successful agile organization is characterized by a culture in which adaptability, a willingness to experiment, and continuous improvement are central values. This enables the organization to flexibly adapt to changing circumstances and achieve long-term success.
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