Company ReBuilding and Agile Working

Why Agility Without Practiced Values and Principles Does Not Work

Agility and renewal are the dictates of the hour. Almost every company, especially large corporations, are making massive investments in their innovation and fast-response capabilities. New business models are being developed in future labs and by incubators in the hopes of preventing the disruption of past market successes by exuberant and hard-hitting young companies and startups. Innovation killers such as rigid hierarchies, complex processes, and paralyzing control systems are slated for breakup while the day’s agenda highlights topics such as ecosystems and Company ReBuilding. But what exactly is agility, and why does it play such an essential role in the innovation environment in particular? And why are an in-depth change in culture and a stable framework of values such a fundamental prerequisite for a successful agile organization?

Agility: everyone wants it, but only a few achieve it

Let’s go back a few years. Agile methods came into vogue in software development at the beginning of the 1990s. Traditional methods were incompatible with the newly acquired awareness that the software development process is not predictable. The software industry defined new procedures such as scrum or kanban that became established as frameworks for agile project management. Since that time, the number of companies using scrum has continued to grow. Employees are sent to certification training programs, while projects are set up and carried out on the basis of the scrum method. Here at Detecon, we have also experienced high demand for scrum masters during all types of projects for a number of years because the role of the scrum master is seen as the decisive factor for success of an agile project. Our experience in recent years, however, indicates that this way of thinking falls short. Not every package that has agile on the outside actually has agile inside.

On the one hand, the necessity for agile procedures is acknowledged and propagated in the majority of German companies, as has been shown in a recent study conducted by the Akademie für Führungskräfte der Wirtschaft. They recognize that agile methods are suitable for fostering high customer orientation, fast response capability, and powerful innovation strength in their own organizations. On the other hand, the majority of employees in German companies neither work agilely nor are familiar with the methods behind it . At first glance, this discrepancy is astounding.

Everything stays different: culture eats strategy for breakfast

Agile collaboration demands one thing above everything else: a radical rethinking in comparison with established workflows. Although the procedures used in agile methods correspond from a neuroscience perspective to the way our brains work, we have become accustomed to the way of thinking that has been propagated for decades, one that is focused on solutions, always oriented to the big picture, and steered by a higher authority. The consequences were long phases of conceptualization leading to development results that were hardly innovative and were based on existing solutions. As the final results were delivered to the users, this procedure was limited to one learning cycle. Since the gain in knowledge did not become apparent until the very end, it could no longer be given consideration. In contrast to this, an agile process demands continuous learning from the regular delivery of partial solutions and their evaluation by users. Customer-centric, innovative development results are fostered by

  1. a solution space for each part that is left open as long as possible,
  2. orientation to results, and
  3. motivation to individual, but coordinated creativity.
Fig 1: Transition from traditional business to agile organization.
Fig 1: Transition from traditional business to agile organization.

In our experience, however, such a fundamental change in the way people work together daily cannot be brought about solely by making a strategic decision along the lines of “Starting tomorrow, we will collaborate agilely.” Nor is it possible to change employees’ working habits simply by sending them to certification training programs lasting several days. The American economist Peter Drucker has written numerous works about theory and practice of corporate management and states succinctly: Culture eats strategy for breakfast. If the aforementioned potential of agile methods is to be exploited to the full, a fundamental cultural transformation into a collaborative organizational culture is required. It is also important to promote lean structures and flat hierarchies. Fact: employees do not accept vague, convoluted rules for collaboration issued from above. Detecon describes this type of desired transformation as the path “from the layer of clay to cell structure” and suggests taking the Company ReBuilding approach.

The country needs new values and principles

Are you actually familiar with your company’s values? Do you actually practice your company’s values, or are they nothing more than words on a poster? Do you know who developed your company’s values? Our experience has shown that such a transition will be sustainably successful only if grounded in common values, principles, and goals in the form of a vision. These three dimensions are the pillars of a corporate culture that is actually practiced.

Fig. 2: The basic pillars of a corporate culture
Fig. 2: The basic pillars of a corporate culture must be taken into account for a cultural change
  • Values express what we strive to achieve morally, what is important to us in our daily work, and consequently what determines our actions. Values provide a common vision for an organization and bond together individuals and teams. Since they form the basis of the corporate culture, their relevance in the longer term should be considered when they are being defined. Principles help everyone in an organization to put values into common practice.
  • Principles define how the members of an organization are expected to conduct themselves. We derive guidelines from our principles, and following these guidelines supports us in actually practicing our values. They can be adapted frequently whenever necessary so that compliance with the established values is assured.

The word “us” moves into the spotlight when there is a corporate culture. Values and principles are frequently and wrongly simply dictated from above to those below. This has the consequence that the employees in a company do not identify with its values and principles. A second mistake commonly made is the fear of becoming more concrete when formulating values and principles. There is often the worry that not everyone will identify with the wording, giving rise to the much more serious problem of arbitrariness. If values and principles are defined too generally, the organization will lack an unmistakable identity. How can I become excited about something that is arbitrary and interchangeable? We all strive to achieve something special, something that attracts us and that we can identify with. Better to accept the fact that not everyone will want to stay in the new culture and instead to bring to life an organization with motivated and committed comrades-in-arms!

Values and principles through participation

So where do the values and principles come from? Agile frameworks are a good starting point for an agile organization. The Scrum Method, the Scaled Agile Framework (SAFe), and the Large Scale Scrum (LeSS) framework bring along values and principles.

One must keep in mind, however, that these are frameworks. The defined values and principles have been created as general concepts for agile organizations in all industries and with any orientation. They serve us as the basis for defining the exact form they will take in specific instances as we collaborate with representatives of the organization in joint working circles.

The participation of the employees in defining the new corporate culture is critical for success and is frequently not fully appreciated. Moreover, the lax observance of current values and principles means that many employees will not become truly aware of how important these factors are until they become involved in the definition of the new vision.

Accompaniment through this process by experienced consultants who support employees in both the definition of values and principles and the understanding of their relevance is very helpful in this situation.

The larger the organization, the more difficult it is to involve all employees in the formulation of the corporate culture. This is why we usually begin by working with selected representatives from all units of the organization to compile an initial draft. We then utilize all the appropriate communications channels (including a feedback channel) to present the draft. The feedback from the organization is incorporated into what becomes the final version. Once it has been set, it must be anchored in the organization. We recommend a presentation of the defined values and principles at the next company event and collaboration with the employees in working groups to work out what impact the vision will have on their daily work.

Wanted: visionaries

Besides the definition of the important basics for action based on values and principles, i.e., the “how”, it is also necessary to describe the objective of joint action, i.e., the “what”. This kind of vision offers to employees a common goal that is viewed as worthwhile and gives meaning to their actions, which in turn fosters intrinsic motivation. This is true, however, only if the goal is not defined too concretely because otherwise the freedom of action and, with it, the creativity of individuals become too restricted.

The organization requires here persons with the ability to practice entrepreneurship in the company in lieu of the hierarchical controlling authorities of traditional enterprises. In an agile environment, this characteristic is cemented in the role of the product owner. A good product owner has an exciting vision for a product and generates enthusiasm in teams so that they devote their competence and creativity to the development of this solution. Transferred to the organization as a whole, it makes sense to establish a kind of scaled product owner role, e.g., in the form of a portfolio management. This position cultivates a cross-company vision that is broken down to specific products by product owners. Our approach for the build-up and establishment of such a portfolio management is founded on the approach of Continuous Exploration from the SAFe framework. This is fundamentally the continuous exploration of customer and market demands as well as the recognition and anticipation of trends. The application of the Design Thinking method has proved to be of value in our approach.

Agility changes, but also demands change

The renewal of a company with Company ReBuilding and the road to an agile organization begins with the triggering of a culture transformation. Without it, there will not be any lasting success, and the application of agile methods will be in vain. Changing the culture requires willpower and great discipline because of the entrenched habits of many years’ standing. Anyone who tackles the task with the attitude of wanting to turn everything around from one day to the next by handing down orders will as a rule fail miserably and also ruin any chances for transformation. “People always want everything to be different while at the same time wanting everything to stay the same,” said the Brazilian writer Paul Coelho. A good approach will be sure to carry people along during such a transformation and turn them into involved parties and not passive subjects. The realization of an exciting corporate culture that offers meaning to work can make possible the successful and long-lasting change to an agile organization that is necessary.

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