Agile Organization 2024 - the Good, the Bad and the Ugly?

The article "The New New Product Development Game" by Hirotaka Takeuchi and Ikujiro Nonaka, which appeared in the Harvard Business Review in 1986, caused a storm of enthusiasm among engineers around the world: the system change from "relay race" to "rugby" (a metaphor at that time), inspired Sutherland & Co. to model today's Scrum approach in 2001.

In organizational consulting and modern software development, "agility" is often praised as a magic bullet for efficient business processes, high-quality software, satisfied customers and happy employees. But does this actually correspond to the reality? Can agility really be used to bring all stakeholders in an area of corporate tension to a satisfactory common denominator? And can agility be introduced in all areas of a company to develop its full potential?

The Good?

Let's start with the good facts and approaches: agility or agile software development has gained enormously in importance in the Swiss ICT market since 2010. Nowadays, numerous projects are set up in an agile (or at least hybrid) context, while construction and large-scale enterprises are still planned in the traditional style. In this article, we will focus on the area of software development.

Despite years of success, the meaning of the term "agility" is interpreted very broadly, which may somewhat cloud the comparability and statistical track record. However, this is not surprising, as this term has neither been standardized internationally nor for practical implementation. Although advanced concepts such as Scrum, Feature Teams or SAFe in modern management philosophy indicate that at least a customer-centric, holocratic and virtual organizational model has been initiated so that iterative, incremental and high-quality software is created for customers, these are unfortunately no guarantee either.

However, agile models must be given a lot of credit for the fact that they have had a significant positive influence on working methods between specialist departments and IT developments, based on the following four laudable principles:

• Agile organizations are open to change, implement organizational change quickly and demonstrate a certain affinity with the concept of the learning organization
• Customers become partners or contributors and play a key role in setting the strategic direction
• The team has an effective form of communication that allows each member to exchange ideas and make decisions swiftly for subsequent implementation
• Self-organization plays a very central role in this context. The team decides autonomously on customer-relevant characteristics and thus determines the entrepreneurial action on the market itself

The Bad?

Unfortunately, however, little attention is paid to whether these principles can actually be realized. The agility trend is usually trusted blindly, uncritically and without reflection. For certain factors, it is difficult to measure the extent to which these ideals have actually manifested themselves in practice, for example, because stakeholders don’t always provide completely transparent feedback or because not all employees are equally intrinsically motivated every day. For a common denominator to be reached in such a case, an open, close-knit feedback culture with an agreed decision-making mechanism (e.g. a majority principle, or consensus) would be required. However, this area of conflict and the search for solutions is often overlooked in agility theory.

Looking at the four principles from a business perspective, readers will surely notice certain similarities to concepts such as Lean Management, Total Quality Management (TQM) and Kaizen. This raises the possibly heretical question: How new is the claim of agility in any case? And isn't it more of an ‘old wine in new bottles’ effect? Perhaps an impetus to revitalize the tired consulting business? "A rogue who thinks evil", King Edward III of England would say.

...and the Ugly!

Although company-wide (agile) forms of collaboration prove to be more productive in the short term and more satisfactory from the customer's point of view, a closer look quickly reveals their limitations: they can only function selectively due to other company requirements such as compliance, data protection and standards. And even where there would be no areas of tension with regulatory requirements, agility is only indoctrinated in isolation into individual areas of the company, preferably IT. This is not because IT itself cannot resist organizational experiments, but because its business nature means that it already has a high level of flexibility, commitment and experimental curiosity.

And as with every new organizational model, Scrum & Co. also have a certain potential for abuse. For example, in his 2016 article "Dark Scrum", Ron Jeffries referred to the fact that the model is often misused for the methodical control and suppression of teams (as "dark scrum"). It is also noticeable that (hybrid) mixed forms tend to be used in business practice, as certain financial and business processes continue to run sequentially, such as financial releases according to business and responsibility regulations, budget planning processes and committee votes. Another prominent example of such a hybrid form is project management according to HERMES from 2022, which is very popular in federal companies and is becoming increasingly accepted by small to medium-sized businesses in the Swiss private sector.

Anyone who thinks that particular problems of a power structure have disappeared with holacracy and agility will likely be disappointed. Even if the formal power structure has been blurred in virtual or temporary teams, some informal power remains unchanged in agile teams, be it certain behaviors of former alpha leaders, the excessive demands placed on key individuals or even fears of loss on the part of former managers (e.g. loss of pay, loss of status, etc.). Consequently, agility is less about the methodology per se than about a fundamental cultural change, for which we might consult the concepts of Kotter, Lewin or Krüger. But this constant and rocky transformation of change management is also described on a completely different page...

So what?

So if the principles of agility can barely be measured with hard facts and it’s only a matter of a compromise solution for dispersed stakeholder groups, what’s the added value of agility after all?

The answer: in the pragmatic implementation within the respective corporate context. Scrum, Kanban, TQM, etc. are all simply guidelines of an organizational theory that should be adapted individually for each company, each department, each virtual team. This is because, on the one hand, the respective area of responsibility, the existing skills and the team maturity play a decisive role, yet on the other, the corporate legislature plays a role in the final team design, the stakeholder dynamics and the output performance.

Conclusion

As an agile leader in today's world, one should therefore have the courage to pragmatically test the suitability of different concepts step by step. With the help of the wealth of (unfashionable) theories and principles from business management and organizational psychology, it’s easy to develop an individual concept for a company and transform it to achieve perfect performance! After all, as Heraclitus once said: "Nothing is as constant as change."