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Future Organization Report 2019

Many times, existing structures prevent the type of flexibility that companies need to respond to increasingly dynamic market and customer requirements. Hence they choose to take the journey towards an agile organization, which relies on autonomous actors and flexible structures. The objective: Better and faster results with a consistent focus on customer needs. But how agile are companies in reality and what does a successful journey towards an agile organization look like?

The Future Organization Report 2019 from the Institute of Information Management University of St.Gallen and manage­ment and technology consulting firm Campana & Schott identifies the success factors and obstacles to the agile trans­formation at companies in Germany, Austria and Switzerland. It also uses specific examples from practice to provide ideas for how challenges may be overcome. The study surveyed 517 managers and employees from companies that are already working on agility. Also included are insights from interviews with 22 top decision-makers.


The results at a glance

Companies use agile work methods but are not themselves agile

While many companies use agile methods such as Scrum and Kanban (doing agile), the concept of agility has not taken hold in the minds of the employees or in the corporate culture (being agile). In addition, agile structures and methods are primarily intro­duced on a divisional basis. But what is required is company-wide awareness of the agile transformation, e.g. with an appropriate vision. It is then that work satisfaction, team orientation and psychological security actually increase – along with business performance and the degree of agility.

Transparency promotes motivation

According to top decision-makers, being open about who is work­ing on what, and why, increases employee motivation and makes it easier to prioritize tasks. This increases the speed and efficiency of decision-making and implementation processes. However, an important item to consider is that some survey participants asso­ciate increased transparency with a risk of unwanted surveillance.

Agility requires life-long learning and collaboration

Agile work requires learning new skills. Employees know this. 81.2 percent feel that they are well-equipped for their current tasks. 75.4 percent say that learning new skills will remain essential. And two-thirds (65.7 percent) strongly agree with both of these statements. An important factor besides technical exper­tise is the ability and willingness to collaborate. People who like working in teams emphasize the need for coordination (48.5 per­cent) and discussion in the group (30.4 percent), and they welcome the help of others (32.8 percent). Almost a third of participants said that they achieve the best work results as part of a team (30.5 percent).

Reducing hierarchies is not enough

Often, agility is considered synonymous with flat hierarchies. But the study shows that the reduction of hierarchies is not neces­sarily the first step towards a successful agile transformation – and that it can even harbor some risks. A much more important factor is that collaboration, communication and decision-making takes place at eye level, regardless of the respective hierarchical role.

Change starts with the managers

Managers in agile companies delegate a lot of responsibility and create leeway for action. A third of those surveyed (33.5 percent) say that they are empowered by their manager. That is, they are motivated to act on their own initiative (65.7 percent), they are given more authority (64.6 percent) and they have a positive out­look for the future (60.9 percent). Almost two-thirds (60.2 per­cent) have full control over their work.

More managers than employees believe that their company is agile

But how agile are companies in reality? Only around a quarter of those surveyed (27.5 percent) believe that their company has attained a high or very high degree of agility. This view is shared by more managers than employees (30.5 percent versus 21.7 percent). Overall, 40.9 percent of those surveyed describe them­selves as agile. Managers view themselves as much more agile (50.3 percent) than employees (25.1 percent). This assessment can also be viewed as an opportunity because managers must also be a role model to overcome resistance and to motivate employees to learn new work methods.

Lack of clear road map

Companies still approach the agile transformation without a strategy and without an integrated approach. Those surveyed mention the lack of a road map with defined interim objectives or targeted interim results. But companies should at minimum prepare a rough plan. In addition, the current KPIs must be reviewed and adjusted, since an agile organization creates different conditions that are of relevance to the KPIs.

Errors are not tolerated

The fear of making errors and a lack of communication are the biggest obstacles to agile work methods. With regard to the error culture, companies clearly have a lot of catching up to do: Only every fifth participant (19.2 percent) says that errors are not used against the person. Every second participant cannot discuss prob­lems and difficulties internally, and only 13.9 percent believe that they can ask colleagues for help without risk to themselves. Only 30.5 percent feel confident to take on risks. This means that managers in particular are asked to practice a positive error culture, which enables a culture of purposeful testing and learning from mistakes.

Promoting the integration of employees

Not all employees can or want to go along with agile work methods. Open communication, external coaches and a sense of awareness help to overcome resistance and retain employees in the company. For example, 36.1 percent of employees surveyed favor team recruiting, i.e. participating in the selection of person­nel for their team. Another 30.4 percent already participate in this process. Activities such as trial working days test the collaboration and harmony of future employees with the team.

All in all, much work remains to be done on the way to becom­ing an agile organization. Companies employ agile work meth­ods in individual projects or divisions, but are not agile across the board. Taking into account the aforementioned success factors and risks, decision-makers must develop agile mind­sets and anchor the same in the corporate culture. That takes time. The results of the study indicate that every successful step in this direction increases team orientation, performance, work satisfaction and the psychological security of employees. The more the transformation progresses, the more flexible companies become in responding to customer needs and market conditions.

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