Everything AGIL or what?

The trend away from traditional hierarchies towards more agile forms of work continues unabated.

But which organization and which management model really suits us? Many of our customers ask themselves this question.

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 traditional 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 out agile – adopt a few more traditional structures at some point in their growth in order to be able to scale.

In our experience, it depends on the long-term direction of development and, above all, the right next step in the maturity level of an organization. As a consultant, blindly beating the drum for maximum agile self-organization is useless.

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

1. Structural factors such as the current organization, market environment and the strategy and type of value creation of a company, 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 taking on responsibility and self-organization. How are decisions usually made? This also includes agile methods such as SCRUM or related instruments such as LEAN, Kaizen, etc.
3. Organizational systems: What do function descriptions and values, business titles and task descriptions look like? What does the income model, target cascades or career models look like? Is there a performance management system?

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

Deeply staggered function values or unequal groupings eventually hinder communication at eye level in self-organized teams.

Demarcated role profiles with tasks and groupings hinder the assumption of responsibility. Income systems based on 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 company’s organizational systems and tools must steer in the same direction – or at least not slow things down. Simply renaming departments as SQUADS and tribes is often not enough.

And in my opinion, this can and should be done gradually and in a coordinated manner.

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

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

First and foremost the team leaders. In the past, they have worked their way up to this first management level – including disciplinary responsibility, job title, salary increase, statement of 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 working in high-performance agile teams can be and how much more you can learn about leadership in the process is often still a long way off.

The division managers usually have less (power) to lose than the team leaders – the role remains one of bundling responsibility – they just initially lack the team leaders as a familiar level for delegating responsibility. Leadership becomes more complex when playing 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 make mistakes. Not everyone can create a leadership vacuum in order to motivate teams to fill it with self-organized responsibility.

Employees in the new self-organized teams often experience the dilemmas of their (former – now equal) superiors. And in many cases, they also 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 cooperation.

The HR organization has to fight on three fronts at the same time: managers and teams need support and tools, the organizational systems that are sometimes ‚dysfunctional‘ for agility have to be adapted (usually in the context of HR digitalization towards more self-control) and often the HR function itself has to ‚unlearn‘ hierarchy and gain experience with agility in its own organization.

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

Based on our experience with many SMEs in particular, we have developed our own holistic consulting model in such a way that it starts with three questions that we work out with the management team:

1. What is the organizational and leadership model (between classic leadership and self-organization) that really suits the company and the industry?
2. What is a sensible next step for us on this long-term path that the company can take credibly and authentically?
3. And how can management and personnel systems be redesigned so that they are free of contradictions and ‚pull‘ in the direction of assuming responsibility?

Companies that are already agile, for example in the IT sector, are faced with the same questions when it comes to scaling for more growth or internationalization – only in reverse. How do we maintain our culture with more structure when we double in size? What structures and systems suit us?

Only by answering these questions in a systematic and structured analysis at the very beginning does a management team have all the building blocks to develop a genuine ‚transformation journey‘ that leads predictably to the goal. Our maturity model helps with this.