The Agile Transformation of Organizations, A Cultural Change Above All

Originally, the notion of agility was born within CIOs in the 90s, it is illustrated by the values displayed in the "Manifesto for the Agile Development of Software". The concept of agility thus proclaimed capitalizes on previous evolutions in the management, organization and management methods of companies – in particular lean management, which has a number of similarities (value creation, customer at the heart of the approach, etc.) – while integrating the perspectives of digital and digital transformation.

When an agile transformation project is launched, the 4 values inherent in the concept of agility must be respected:

• focus on individuals and their interactions by offering a working environment conducive to excellence,
• keep in mind the purpose of the work carried out and the quality of the elements delivered,
• make every effort for a harmonious collaboration with customers,
• facilitate the acceptance of changes and the establishment of a learning organization. 

Given the current context, the principles of agility tend to go beyond the sole framework of IS projects in order to spread this culture throughout the organization and generalize in various directions for the benefit of innovation. This is why it is important to keep in mind that the deployment of agility does not consist only in the implementation of new methodologies and work tools but constitutes an evolution or even a transformation of the culture of the organization, which must be able to embody these 4 agile values. In this sense, the art of agile transformation is to succeed in achieving this difficult balance between respect for a methodological framework and taking into account cultural specificities.

Agility requires rethinking traditional business organizations

Many companies have embarked on this path towards a more agile, responsive, efficient model. Depending on the context, different modes of organization have been experimented:

• agility at scale and operation in squads / tribes in CIOs or within other departments, relying on repositories such as SAFe or Spotify and drawing heavily on lean startup or lean management currents,
• the liberated or holacracy company for organizations wishing to work on the decision-making process,
• sociocracy for empowering organizations, which highlight the increase in skills of employees.

These different types of organizations are usually chosen based on their consistency with the DNA of the company wanting to make this change.  Whatever the name claimed, and the approach implemented, it is the same main principles that characterize these protean organizational models, whose working methods are common: design thinking, lean, kanban, Scrum, coaching.

These methods make it possible to move from a hierarchical organization, with a top-down management mode and compartmentalized teams, to an organic organization characterized by a management that carries and transmits the vision. This organization is based on multi-skilled teams, built around common objectives, whose roles are clearly defined, and which operate according to end-to-end approaches.

In addition, these different organizations also have fundamental points in common: the ability to work with an ecosystem that adapts to changes, continuous improvement as well as strong links with the customer for a better understanding and consideration of his expectations.

The implementation of these new types of organization is based on several pillars:

• collaboration, giving priority to teamwork, with a strong feedback culture,
• creativity, to foster innovation and continuous improvement,
• the accountability of teams, with the application of the principle of subsidiarity in decision-making,
• motivation, thanks to an environment that facilitates initiative and team efficiency,
• the clearly defined vision, to support autonomous teams,
• trust, to the benefit of a climate conducive to risk-taking and initiative.

This cultural change, with the organizational and managerial transformation it implies, will impact the entire organization and its modes of operation. Especially:

• Human resources: the principles of accountability and teamwork require rethinking traditional HR processes, for example, and the evaluation processes that are characterized in this type of organization by the disappearance of a fairly codified annual evaluation. Other techniques and devices are then put in place, such as regular feedback allowing a more timed improvement dynamic, the setting of objectives more collective than individual, or training plans for teams aimed at integrating these new management methods. So many reasons why any agile transformation must be defined with a strong involvement of the HRD. 

• Governance and processes: the principles of transparency and accountability must be illustrated in redesigned governance processes, facilitating the flow of information for decision-making as close as possible to the field. The functioning of the steering bodies, the budgetary processes and the management of project portfolios are all axes to be reinvented for better agility.

• Indicators and tools: performance indicators and the automation of certain processes are key, both to measure the success and progress of the team but also to promote its efficiency. This desire to continuously measure progress by deploying indicators can also lead to a review of workspaces (setting up a visual management room for example) to facilitate communication and promote transparency.

• The ecosystem: finally, given the fact that no company lives in isolation anymore, the way to interact with partners must be rethought so that the ecosystem is not a brake but a lever of acceleration for the benefit of the deployment of agility.

What do companies that have experienced this agile transformation tell us?

There is a lot of feedback from companies that have embarked on this exciting journey towards a more agile and learning organization. Inspiring books¹ such as Reinventing Organizations, which evokes in particular the fabulous Buurtzorg adventure, or Lean Start-up make it possible to understand concretely the stakes and difficulties of these transformations. We can also mention the videos published by voyages.sncf.com on Youtube, which explain in a very didactic way the epic of the agile transformation of this IT department of the SNCF group².

It must be remembered from this feedback that cultural change, in order to be shared by all, must be explicit. Any agile transformation will therefore begin with the definition of this new culture: why be agile? How will agility bring a plus to my organization? Which values should be favoured? To succeed in empowering teams, this culture must be understood and integrated by all. That's why agile companies spend a lot of time making sure everyone knows and shares this culture.

In addition, once formalized, this culture must be effectively applied in the processes. If, for example, the modes of evaluation remain fixed on very individualistic logics, or if any failure is harshly punished, it will be impossible to develop a sense of the collective and to promote the right to error as an opportunity to learn.

The example of Microsoft is enlightening and very described in the book of its CEO Satya Nadella², which tells the story of Microsoft's transformation both in its business model and competitive positioning, but especially in its culture to promote the values of empathy and benevolence. Microsoft's transformation, for example, is illustrated in the new performance review system, which focuses on the production of a result by relying on the collective rather than on individual initiatives.

How to reconcile agility and flexibility with methodology and winning framework 

In summary, agile transformation cannot be decreed but must respond to a strong challenge of the company. Like any change project, it must be designed to bring value to the organization and its members. Even if many methodologies exist and make it possible to obtain this agility, if the expected value of this transformation is not defined, the results will not be there: it is not a question of "change to change" or to duplicate an organization that has borne fruit in a totally different context.

That is why it is important to separate, in the transformation project, the negotiating and non-negotiable principles. The former are found in all agile transformations and must therefore be pre-existing in the organization to move towards more agility: these include the self-organization of teams, collaboration and sharing, work on value, experimentation, continuous improvement, feedback and trust.

It then remains to define the path and the way in which agility will be implemented: what transformation plan (big bang or iterative)? Which operating model (safe, lean startup, sociocracy...)? What processes and tools are at the service of this agility? If it is essential to define above all the value related to the transformation and the associated cultural issues, it will then only remain to launch to deploy the tools and methodologies at the service of this transformation.

References

1 Reinventing Organization by Frédéric Laloux, Lean Startup by Eric Ries, Tribal Leadership by Dave Logan, John King & Halee Fischer-Weight, Management 3.0 by Jurgen Appelo

2 Hit Refresh by Satya Nadella