The fgi path towards an agile organization

Heading towards an agile organization

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The fast ascent of new markets and the rapid growth of flexible and fast acting global companies such as Google, facebook or amazon in the past decade have illustrated that – in today’s business world – previously reliable parameters for predicting company success (e.g. company size, total focus on efficiency and performance) now apply less and less.

In the face of these agile organizations many traditional companies look for answers and new solutions that are both feasible in their organizational settings and allow them to keep a competitive edge.

The fgi approach does not only outline the necessary questions managers need to ask, it also provides possible ways to introduce the agile way of working in existing complex and multifaceted organizations. It draws from profound expertise in leadership, mindset and cultural change accumulated by fgi over the past 30 years.

Global, technology and social developments drive organizations towards agility

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• Relying on structures, processes and linear thinking limits creativity and speed.

• Most of today’s processes are strictly sequen-­tial and based on a silo mentality. However, their ability to meet customers’ requests for innovation and flexibility is constantly decreasing.

• Globalization has made the environment considerably less predictable regarding political developments or emerging disruptive competitors.

• Digitalization is changing the game in many industries. It is affecting business models and requires tech-­savvy employees.

• Today’s employees are highly qualified and purpose-­driven. Leadership approaches guided by goals and by command & control become less adequate and effective.

Our baseline: What we mean by ‘organizational agility’

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Organizational agility is the capability of a company to continuously generate new business opportunities and to act flexibly and fast in order to deliver business value.

© FischerGroupInternational

Becoming agile requires organizations to rethink and reshape their corporate cultures

Recently founded companies benefit from establishing an agile organization from scratch. In contrast, companies that have successfully grown with traditional structures in the past need to address several aspects in their journey towards an agile organization.

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From Towards

Relying on hierarchies Trusting in individuals’ resourcefulnessand self-­organization

Cross-­functional collaborationSilo mentality

Embracing external perspectives and customer insightsRelying on in-­house insights

Focusing on speed, flexibility and innovation

Focusing on efficiency and performance

A shift in thinking patterns and behaviors is the foundation of the agile journey

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People want to contribute and succeedneed to be instructed

Ownership is shared by (cross-­functional) teamsbelongs to the management

are made where the expertise liesDecisions are made by the management

is credited to teamsSuccess is credited to individual heroes

are made transparent and considered value-­addingFailures & errors are avoided and concealed

is direct, personal and integratingCommunication is formal and controlled by hierarchies

are based on cooperation and a shared purpose

Working relationships

are based on contracts, rules and targets

TowardsFrom

Especially leaders face new challenges in agile organizations

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Significantly fewer leaders, especially

middle managers and loss of hierarchical

status

Leaders lose the power to make decisions and

no longer bear responsibility alone

Hierarchies with many leadership and management levels

Leaders exert control over processes and are held responsible for successes and failures

Flat organizations with significantly reduced management levels and only a few leadership positions

Teams are held responsible for both processes and final results

Now ImplicationsIn future

Leadership mainly entails managing operational processes and ensuring efficiency

Leadership mainly entails providing orientation, coaching and driving group processes

Development of new leadership competencies is

required

In addition, different competencies and attitudes become more important

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Readily dealing with both complex technical systems and unclear targets, conflicting requirements, changing interpersonal relationships and group dynamics.

Using power for the greater good and shared goals (the team, the company) rather than selfishly (career, prestige, need for dominance). Sharing and contributing with others in mind.

Dealing with systemic complexity

Selfless use of power

Connecting to own emotional states and others’ subjective perceptions, e.g. by genuine and appreciative feedback and praise.

Empathic communication

Thinking independently about traditional frameworks and models. Using own thoughts for new approaches. Enjoying alleged impossibilities and changing perspectives.

Independent thinking

Continuously questioning the status quo. Thinking in alternative future scenarios and analyzing distinct possibilities.

Experimental future orientation

Cooperating with experts from other areas effectively. Understanding, applying and communicating concepts and knowledge across multiple disciplines.

Interdisciplinary understanding

The fgi approach starts with a thorough discussion at the top, followed by an experimental process

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Agile teams• translate purpose into actions • develop new approaches and new ways of working

• focus on speed and flexibility

The executive leadership team• understands the situation• outlines purpose and vision• agrees on the framework• decides to start the process

The top management team should provide answers to two strategic questions

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• What exactly makes us become agile? What are external and internal drivers (e.g. market, customers, technological trends)?

• What evidence do we have that agile transformation will make our business more successful?

Why?

• What is the focus of our agile strategy? • How far do we dare to stick out our necks? Are we choosing a disruptive or an incremental approach?

• What are the greatest challenges and risks in our agile transformation?

• What are the binding principles that guide us and our employees?

How?

The top management needs to decide how to introduce agility

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Approach: Selected agile practices are introduced throughout the company.Advantage: Induces transition and cultural change gently, including plenty of employees and departments at the same time.Challenge: Dealing with gaps between remaining traditional structures and new agile way of working.

Approach: Agile structures, roles and processes are introduced throughout the entire company. Advantage: A radical approach quickly creates an appropriate context for new ways of thinking and working.Challenge: Dealing with a large amount of uncertainty, confusion and inexperience.

Changing with a big bang

Gentlynudgingall

employees

Approach: An agile approach is implemented in one unit or division.Advantage: The scope of change is clearly defined. Straightforward introduction of methods designed for this purpose.Challenge: Integrating teams and results into non-­agile structures and processes.

Starting with one unit

There are five key elements that ensure the success of agile journeys

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Dialogue and communication – Direct, speedy and informal communication concerning goals, results, obstacles and success within the agile teams and also with customers, experts and leaders is key to agility.

Visualization – One of the cornerstones that leads to constant exchange, transparency and speed is always displaying the current work status and steps clearly and visibly for everyone.

Customer focus – Keeping an eye on the environment and the requirements of current and future customers at all times is a central feature of agile organizations. It is the framework and foundation of (almost) every decision.

Fail early and learn attitude – The key element of agile cultures is having the courage not only to give risky and unexpected ideas a try but also failing (cheerfully) again and again in order to draw informative conclusions.

Purpose – Both the purpose of the (new) company and of the change process must be fully convincing and be able to adapt to company units, products, areas of responsibilities and tasks.

Top management• describes the purpose and vision

• sets the framework for the process

• is available for questions and engage in dialogs

Specialists• e.g. IT managers, HR business partners, business analysts

• are functional experts and support on operational levels

Transition coaches • support the process by observing the team and their organization and disrupting old habits and thinking patterns;;

• mediate between the team and the top management, possibly supporting the latter to ‘let go’

Agile journeys require new key roles

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Team members• are staffed cross-­functionally, self-­organized and responsible for delivering results as a team

• implement change experiments and play an active part in the ‘inspect & adapt’ steps

Agile masters• are responsible for the process and manage group dynamics

• foster open discussions, honest feedback and adequate flow of information

Product owners• serve as an interface for all stakeholders, especially for the top management

• are in charge of the change backlog and ensure that the interests of all stakeholders are considered

Agile teams

An agile organization at a glance

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fgi Research InstituteBrodschrangen 3 -­ 520457 Hamburg, GermanyTel. +49 (0) 40 65 68 90 0www.fgi-­research-­institute.cominfo@fgi-­research.com

fgi Fischer Group InternationalDufourstraße 1818008 Zürich, SwitzerlandTel. +41 (0) 32 512 8290www.fgi-­web.cominfo@fgi-­mail.com

fgi Fischer Group InternationalBrodschrangen 3 -­ 520457 Hamburg, GermanyTel. +49 (0) 40 65 68 90 0www.fgi-­web.cominfo@fgi-­mail.com

fgi DigitalSolutionsBrodschrangen 3 -­ 520457 Hamburg, GermanyTel. +49 (0) 40 65 68 90 0www.fgi-­web.cominfo@fgi-­mail.com