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Eight Transformations for Agile companies

To become an agile organization, would for most traditional companies require a Mindshift. To move away from habitual thinking and adopt a new set of values, in reality, would mean new fundamental beliefs to guide and motivate actions.

Corporate Rebel is the creators of a movement of individuals and organizations that inspire changes towards more engaging workplaces. In their book “Make Work More Fun” they describe how this shift looks like and have identified eight areas for change in their research of progressive organizations.

1. From profit to purpose & values

Profits are important, it is like oxygen for a human, necessary to stay alive, but not the reason for living. Agile companies are built around a common purpose and a set of values, not only to secure shareholder value.

The higher purpose defines the goals, they are shared and are clear to everyone. The values provide the direction and motivation for the employees, they guide the decision making and a sense of what is important and what is not right and are reflected in all company activity. This way, you do not need detailed processes and policies, the employees will be guided by goals and values.

The company culture, and its business practice, are built on values and therefore important to be shared by all employees. Hire for culture, train for skills. In agile organizations, they have experienced that it is more important the employees have the cultural fit, share their values, not only the right skills. It is easier to train skills, while it can be hard if the values are not shared.

2. From hierarchical pyramid to the network of teams

Traditional companies are hierarchical, they are organized in silos, with rigid management layers and governance structure. Decisions are taken at the top and cascaded down the hierarchy. Managers are responsible for distributing work and employees are expected to carry out their duties with little influence on their workplace. This organizational form in itself does not promote agility, speed, or employee engagement. In addition, traditional companies often have an internal efficiency focus rather than a customer focus.

Agile companies are organized differently, the organization is organic and evolves to adjust to the environment. Agile companies tend to have flatter organizations, but several alternatives have emerged depending on company size, industry, business landscape, customer, and geographical spread. Employees work in autonomous cross-functional teams, connected as needed to other networks of teams. The teams are responsible for their results and often have P/L responsibility. This way the team feels the impact of their successes and failures. This increases responsibility, entrepreneurship, communication, adaptability, and the willingness to support each other.

Decisions are normally taken by the employees that will be affected by the decision, the ones that carry out the order. It is the frontline employees that are the closest to the customers and they have the mandate to take the decisions affecting customers.

3. From directive to supportive leadership

The managerial role In a traditional hierarchy is directive. The work is organized from the top, described in processes and policies, and decision mandates are placed with managers. Bureaucracy causes waiting time and inefficiency. For example, employees working on a project, most of the time, are required to have a decision from a manager or a management team at several project gates, to be able to proceed with the project.

Managers in agile companies operate differently, their responsibility is more like creating the right context for self-organization. A supportive role, to secure their team has the right resources, information, and skills to perform their job. An agile manager embodies the company strategy and values, walks the talk, and strives to create a psychologically safe environment. They challenge the current ways and encourage experimentation and learning. It is like moving from a reporting line to a service line.

4. From Plan & Predict to Experiment & Adapt

Business plans and budgets are central in traditional companies. Enormously much time is spent in the budgeting process and sometimes, even more, to explain deviations from the budget. To use the time to explain deviations, why the plan did not work out, is focusing on the past and instead of looking forwards.

In a complex VUCA world, the future is hard to predict, though Agile organizations are more flexible to adjust. They use rolling forecasts, marked-related targets, and evaluate work processes to find out how they better can serve their customers.

So rather than sandbagging budgets, to be on the safe side, managers are empowered to respond to changes in the business environment and alter their course of actions accordingly.

5. From Rules & Control to Freedom & Trust

In many traditional companies, bureaucracy limits employees’ space to operate in. Processes and procedures describe how the work should be carried out, policies regulating how to behave, i.e. business trip, etc. Many of these processes, procedures, and policies, are written to control any potential bad behavior and are not in reality not showing much trust in the employees’ ability to make sound judgments on their own. The effect is that this many times hamper engagement, empowerment, creativity, and innovation.

In agile organizations, employees are given trust and autonomy. They are treated as adults that can make their own decisions & priorities. There are plenty of studies, showing employees' performance goes up when given the trust to organize their work as they prefer and however it works best for them. Most people do not want to be controlled or micro-managed. Managers that were resistant to home offices, have during the Covid-19 pandemic, experienced that employees can be trusted to work from home.

6. From centralized to distributed authority

As described earlier, in hierarchical organizations, the decision-power is distributed from the top, often distributed in a detailed “Power-Of-Attorney”, where most employees have very little say.

In Agile companies, the people working closest to the customers have been given distributed authority. The belief is that the people who will be affected by the decision should be given the authority to make the decision themselves as they are in the frontline and have the best understanding of customers, suppliers, and production machines. Managers secure the employees have the right information and knowledge to make the right decisions and with this authority comes responsibility and accountability. Data and analytics are used to continuously improve services and products in agile companies and the frontline secure to have the right information before making decisions.

7. From Secrecy to Radical Transparency

In hierarchical organizations, some information is shared openly, while some information is only for the top management's eyes and then selectively distributed through the organization. Employees do not feel comfortable sharing all problems from their side either. Studies show that for every organizational level, less information about problems with customers is shared, It is only problems that might affect the results that reach the top-management team.

Agile companies are transparent. They consider it is important that information is shared and necessary for employees to make the right decisions. Transparent managers experience when employees are given confidential information, they keep the trust they are given, and also encourage them to share information and problems upwards. Trust goes both ways and promotes collaboration in and outside the company.

8. From Job Descriptions to Talent & Mastery

If you have worked in a hierarchical organization, you probably have experienced that your job description has changed over time. It is almost outdated at the same time as it is printed out, as things change rapidly. You have probably also experienced that you have a tendency that to focus the same on all job duties It is usually the ones you enjoy doing, you spent the most time on.

We are more engaged when we are allowed to perform the job tasks we enjoy doing, and in a team, there are usually a lot of different preferences. Agile companies try to leverage this dynamic to make the best use of the diverse talents in the whole organization. However, all employees need to constantly develop and grow their capabilities, but in an area, they enjoy and are important for the company. This leads to mastery, happy employees, and improved organizational performance.

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