Agility culture for coping with digital transformation

The Digital Transformation has stirred up dust. So much dust that old, familiar insights appear new again. As a result, hardly any text on digital transformation does not begin with the hint that the dynamics of the environment, the pressure of competition and innovation or the uncertainty and ambiguity are constantly increasing. This is not wrong, and knowledge is also extremely important to companies, but it is anything but new. Management guru Michael Porter already pointed out in the early 1990s that the information age and technological development will considerably increase the dynamics (Nonaka/Takeuchi 1997). And even before Porter’s death, no less clever but somewhat less well known minds described change as a permanent state (cf. e. g. Guglielmino/Guglielmino/Long 1987, p. 303). If the influence of the digital transformation is isolated and viewed purely theoretically, then it is understandable to emphasize the increase in the dynamics of change as something new – after all, it is conclusive to assume an increasing intensity due to the shortening of product lifecycles and the intensification of networking that goes hand in hand with digitization. In the overall context of complex practice, however, it seems somewhat bold to continue to write tirelessly, after more than a quarter of a century, about a growing rate of change that is neither measurable nor quantifiable. Apart from the fact that such an increase in speed has to culminate at a point – albeit only theoretically comprehensible – the practical benefit for companies seems to be very low, even if an increasing intensity of change is proclaimed for the next 25 years without really introducing new approaches how to cope with this environment.

It therefore seems more purposeful to understand the dynamics as a constant, i. e. as a permanent state, at the latest now in the course of the digital transformation. As a result, the increase in the rate of change loses its potential for disarming because change is treated as a fundamental framework condition. In practice, this perspective is becoming increasingly widespread as companies commit themselves to agility (Bazigos/De Smet/Gagnon 2015). The general goal is to ensure an organization that is flexible and proactive in dealing with the exogenous and endogenous pressures of change. While the management of organisations is already extremely demanding due to their systemic complexity, the development to such an agile organisation is made all the more difficult by the fact that agility is often examined in fragmented form and therefore not treated holistically. For example, there are authors from software development who understand teamwork or product development with agility and who thus find the central solution approach in „Scrum“ (cf. e. g. Jenewein 2016). Other authors focus on organisational processes (e. g. Häusling 2015, p. 5) or on flexible structural design (e. g. Aghina/De Smet/Weerda 2015).

Agility culture as a foundation for agile organization

These different perspectives are all correct and valuable, but they hardly deal with the deep structure of an agile organization. This is again elementary, so that both the individual members of the organization and the entire system are willing to understand agility as a new organizational rationality. In other words, both individuals and the organization as a whole need an agile mindset (Moran 2015, p. 209). If we now understand an organizational culture in which „mental models“ (Senge 1994) or „unquestioned self-evidentness“ (Schein 1997) are organizationally shared, then it becomes evident that the development of an agile mindset means nothing more than anchoring or collectivizing it in the organizational culture.  The establishment of such an „agility culture“ as a deep structure thus becomes the foundation of an agile organization, which enables appropriate team processes, structures and product development in the surface structure.

However, the culture of agility must not be (mis-)understood in that there is (only) a cultural manifestation for agile organisations. As Weh and Meifert (2010) clearly show, an organizational culture is on the one hand so diverse that agility can only represent one aspect of a conglomerate of „theory-in-use“ (Argyris 2009)[1]. On the other hand, the organizational culture is too heterogeneous to speak of a monolithic culture for the entire system, especially in larger companies. The development of a culture of agility to create an agile organisation does not mean that the whole organisational culture should be changed. Rather, the existing culture is to be supplemented insofar as agility becomes an „unquestioned matter of course“ (Schein 1997) or „Theory-in-Use“ (Argyris 2009).

Institutionalisation of permanent questioning

The realization that the design of an agile organization focuses on cultural development is, however, only a first step. An important one, because it helps to understand that other – necessary – measures come to nothing without a culture of agility. However, nothing has yet been put into practice. The challenge in the subsequent implementation, however, is that cultural design must be linked to the existing organisational context. Therefore, it does not seem helpful to proclaim arbitrarily collected and generally accepted principles of agility as a goal of change. The second step after the basic orientation towards cultural development must be a smaller one. A step that makes the implementation appear somewhat clearer without skipping necessary and context-specific intermediate steps. This second step can be seen in a better understanding of cultural development as a general project and the culture of agility as an abstract construct.

Based on the established understanding of culture, which essentially consists of the „unquestioned self-evident facts“ (Schein 1997), cultural development means the change of these institutionalized „mental models“ (Senge 1994).  The questioning of these existing „mindsets“, which are shared by the members of the organisation (Moran 2015), is carried out by means of a so-called „double-loop learning“, in which „theory-in-use“ is reviewed and, if necessary, adapted at both individual and organisational level (Argyris 2009). For the development of the culture of agility, this means that those „theories-in-use“ that hinder an agile organization are dissolved, while self-evident things that promote such an organization are introduced or strengthened. Since agility requires that organizational members and the overall system can always adapt anew, this questioning of obstructive organizational routines must be institutionalized in the culture of agility.

This understanding of the culture of agility thus reveals an apparent contradiction to the generic concept of culture. In this way, culture was understood as those unquestioned self-evident facts that are shared by the members of the organisation (approval 1997). The culture of agility, on the other hand, is now constituted precisely by the fact that the unquestioned self-evident facts are constantly questioned in order to adapt them, if necessary, to the new circumstances. What appears to be a paradox at first glance can be resolved by understanding the culture of agility on a meta-level. In this way, the organizational culture is left as something specific and unique, while the culture of agility indicates that an agile organization institutionalizes the permanent questioning of the status quo regardless of its cultural specifics. This is still very abstract, but it is precisely for this reason that it represents a mosaic piece for all organisations that can be connected to the long road to implementing agility.

Final interim conclusion and outlook

Up to this point, it could be shown that an agile organization depends fundamentally on whether agility is shared by the organization members as a „mental model“ and thus as an „unquestioned self-understanding“. This first step, which focuses on the development of culture, could be further developed in a second step in such a way that it was not necessary to change the fundamentals of the entire organization. On the one hand, this would be too extensive and therefore neither practical nor feasible. On the other hand, an organizational culture – at least in larger companies – is so heterogeneous that no monolithic culture is realistic. Therefore, it seems more effective to understand the culture of agility as a meta-level. As a result, the connecting element of agile organisations consists in particular in the fact that institutionalised organisational routines and constructions of reality are permanently questioned.

In order to take further and, in particular, more concrete steps towards implementation, the surface structures of agility discussed at the outset will soon have to be taken into account and designed in concrete terms. Due to their complexity and contextual dependency, an approximation in this degree of concretisation is only possible on a case-by-case basis. However, the question of how a permanent questioning of the „theory-in-use“ can be institutionalized should serve as a further intermediate step as well as a generic orientation aid. Argyris and Schön give a first indication of this by seeing „Deutero learning“ as an organizational ability to „reflect on the learning processes on a meta-level“ (Seufert 2013, p. 58). It could therefore prove to be fruitful to illuminate and concretise this already known concept anew against the background of agility and the culture of agility.

 


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Literature

Aghina, W. /De Smet, A. /Weerda, K. (2015): Agility: It rhymes with stability. Sync by honeybunny http://www.mckinsey.com/business-functions/organization/our-insights/agility-it-rhymes-with-stability. 28 May 2016.

Argyris, C. (22009): On organizational learning. Malden, Mass: Blackwell.

Bazigos, M. /De Smet, A. /Gagnon, C. (2015): Why agility pays. http://www.mckinsey.com/business-functions/organization/our-insights/why-agility-pays. 28 May 2016.

Guglielmino, P. J. /Guglielmino, L. M. /Long, H. B. (1987): Self-Directed Learning Readiness and Performance in the Workplace: Implications for Business, Industry, and Higher Education. In: Higher Education 16, H. 3, S. 303–317.

Häusling, A. (2015): Agile Change Management. Sync by honeybunny http://hr-pioneers.com/2013/10/ebook-agiles-change-management/. Mail 28th 2016.

Jenewein, T. (2016): Digital leadership at SAP. Consequences of the Digital (R)Evolution for the company and its executives. http://scn.sap.com/community/german/education-dach/blog/2016/03/03/digital-leadership-bei-sap-konsequenzen-der-digitalen-revolution-f%C3%BCr-the-business-and-the-f%C3%curr%C3%A4fte? 31 March 2016.

Moran, A. (2015): Managing Agile. Strategy, Implementation, Organization and People. Cham: Springer International Publishing.

Nonaka, I. /Takeuchi, H. (1997): The Organization of Knowledge. How Japanese companies use a waste resource. Frankfurt/Main: Campus.

Bill, E. H. (21997): Organizational culture and leadership. San Francisco: Jossey bass.

Senge, P. M. (11994): The Fifth Discipline. The Art & Practice of the Learning Organization. New York, NY: Currency Doubleday.

Seufert, S. (2013): Education management. Introduction for study and practice. Stuttgart: Schäffer-Poeschel.

Weh, S. -M. /Meifert, M. T. (22010): Culture management. In: Meifert, M. T. (ed.): Strategische Personalentwicklung. An eight-stage programme. s. l.: Springer-Verlag, S. 315–332.

 

[1] Argyris (2009) delimits „Theories-in-Use“ from „Espoused Theories“, in that the first-mentioned theories are those that are actually, albeit unconsciously, pursued by the members of the organization. Espoused Theories „, on the other hand, are principles of conduct that are articulated by individuals but not necessarily implemented. According to Schein (1997), these „theories-in-use“ can be equated with the unquestioned matter of course, which in turn can be understood as the core of an organizational culture.

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