Which form of work suits us? A readiness check.

The trend from classic hierarchies to more agile forms of work is unbroken.

But which organization and which management model really suits us? That’s what many of our customers ask themselves.

On closer inspection, there is a whole spectrum of different organizational forms and leadership and collaboration cultures between classic hierarchy and radical self-organization in teams. Hardly any classic company dares to make the radical leap that Brian Robertson impressively described for his company in ‘Holocracy’. And vice versa: I know many start-ups that – having started off agile – at some point in their growth acquire a few more classical structures in order to be able to scale.

In our experience, it depends on the long-term development direction and, above all, the right next step in the maturity of an organization. As a consultant, it does no good to push blindly in the direction of maximum agile self-organization.

In my opinion, there is an individual optimum for each company on the scale between hierarchy and agility that is determined by a whole series of factors:

1. Structural factors such as the current organization, market environment and a company’s strategy and type of value creation. For example, how great is the potential for disruption or the shortage of skilled workers in an industry?
2. Leadership and culture of an organization – such as management levels and roles, decision-making style, values, willingness to change, and experience with assuming responsibility and self-organization. How are decisions usually made? This includes agile methods such as SCRUM or related tools such as LEAN, Kaizen, etc.
3. Systems of order: What do job descriptions, business titles and task descriptions look like? What does the income model, goal cascades or career models look like? Is there performance management?

The last point is a critical one that is often forgotten in agility projects. Enthusiasm to the creative and liberating power of agile methods and teams is easy to ignite. And the first experiences are often very encouraging for all involved. Thereafter often comes a dry spell, because – in the medium term – an organization cannot be brushed against the grain:

At some point, deeply staggered functional values or unequal groupings hinder communication at eye level in self-organized teams. Overly delineated role profiles with tasks and grouping hinder the assumption of responsibility. Income systems graded according to seniority, access to information or target cascades clash with role flexibility.

If self-direction, decentralized decision-making and ownership are to prevail as organizational and management principles, the corporate organizational systems and tools must steer in the same direction – or at least not slow them down. Simply renaming departments to SQUADS and Tribes is often too short-sighted. And in my opinion, this can and should be done gradually and in a coordinated manner.

People have needs and a certain sense for such inconsistencies that cost credibility.

There are certain groups in such change processes that are particularly sensitive to this:

– Team leaders. In the past, they have worked their way up to this first management level – by way of disciplinary responsibility, hierarchy, salary increase, potential or privileged access to information. Being allowed to be the SCRUM Master in the future is often no substitute for the lost privileges and career prospects. And the positive experience of how much fun work in high performing agile teams can be and how much more you can learn about leadership is often still far away.

– Area managers usually have less (power) to lose than team leaders – the role remains one of bundling responsibility – they just initially lack team leaders for delegating responsibility. Leadership becomes more complex in the game with agile teams. Area managers often lack the ability to provide complementary ‘pulling’ leadership and the patience to simply let teams do things – and especially, to let them make mistakes. Not everyone can create a leadership vacuum to motivate teams and fill it with self-organized responsibility.

– Employees in the new self-organized teams often experience the dilemmas of their (former – now equal) superiors. And they often lack methods and experience in self-organization – for example, when it comes to making effective decisions as a team. In the long term, ‘inherent’ differences in classification, income, and functions also put a strain on genuine egalitarian interaction.

– The human resources organization must fight on three fronts simultaneously: Managers and teams need mentoring and tools,

– the organizational systems that are sometimes ‘dysfunctional’ for the agile working philosophy need to be adapted (mostly in the context of HR digitization towards more self-direction)

– and often the HR function itself needs to ‘un-learn’ hierarchy and experience agility in its own organization.

This is all a lot at once and can overwhelm an organization because it creates dilemmas for everyone involved.

From our experience with many mid-sized companies in particular, we have developed our own holistic consulting model in such a way that we pose three questions at the beginning, which we work on with the management team:

1. what is the organizational and leadership model (between classic leadership and self-organization) that really fits the company and the industry?
2. what is a meaningful next step for us on this long-term path that the company can take in a credible and authentic way.
3. how to redesign leadership and HR systems so that they are free of contradictions and create ‘traction’ towards taking responsibility.

Companies that work in an agile manner – for example in IT – face the same questions when it comes to scaling into more growth or internationalization – just the other way around: How do we maintain our culture with more structure as we double down? What fits us in terms of structures and systems?

First answering these questions in a systematic and structured analysis gives a leadership team all the building blocks to develop a true and goal-directed ‘Transformation Journey’. Our maturity model helps.