Business

Looking beyond the surface: The hidden aspects of organizational culture in agile transformation

Ogla Karantanou, Management Consultant – Digital Delivery within Financial Services at Capco

The concept of ‘organizational culture’ has been frequently debated, with management style and the level of autonomous decision-making among employees identified as one core aspect.

In his influential 1999 book The Corporate Culture Survival Guide, Edgar H. Schein argues that culture is not a one-dimensional, monolithic concept, but rather a mosaic, a set of championed principles, beliefs, and practices present in the company.

Schein sees culture as having three distinct levels:

Level 1 – Visible Artifacts – The first and most obvious level is ‘visible artifacts’: aspects that relate to the working environment, routines, habits, dress code, or how people talk.

In the context of agile transformation, this layer would translate into dividing working periods into sprints and holding agile ceremonies changing role titles to include scrum masters and product owners or forming cross-functional teams to discuss and review agile implementation.

Level 2 – Adopted Values – The second level refers to the ‘adopted values’ of the organization: the set of values that employees consciously hold, as well as the strategies and philosophies that explicitly guide their patterns of behavior.

These may not be as obvious as the visual structures and processes of level 1, but members of the organization are aware of and have knowingly adopted these values.

Level 3 – Underlying Assumptions – The third level is the underlying basic assumptions: the mental models and values shared by employees which are held subconsciously and encapsulate the company’s identity.

These patterns have become ingrained in the way people think over time and are therefore harder to recognize or acknowledge. In an agile context, this level would represent assumptions that have delivered results in the past, as well as emotions or social characteristics.

For example, certain individuals, especially at the senior management level, might naturally exhibit a negative reaction when presented with a way of working that essentially replaces top-down management in favor of an approach where the leadership team simply set the direction and desired outcomes and the agile organization has autonomy in achieving those outcomes (within agreed guardrails).

A successful agile transformation across culture levels

Transforming the visible artifacts outlined above represents the simplest part of the agile journey, since most practices are prescribed in agile manifestos and have been widely explained in detail in the relevant literature.
However, adopting these visible artifacts is not enough to effect real change in the culture. For a company that aspires to be agile, simply adopting daily rituals or roles defined by the agile methodology will not be enough to ensure these practices gain real traction.
Agile transformation, Multiple case studies1 of real-world companies have shown that agile transformation is most frequently successful when core values have been addressed.
Our own experience has proven that organizations that treat agile transformation training and coaching as an essential part of their agile transformation journey have a high level of success with adopted values.
agile transformation, Encouraging employees to be creative and to ideate, even if this initially delivers worse than expected results, is key to driving the right adoptive values: start working on a task and obtain early feedback, and then determine early in the process whether to continue working on that task or instead take a different approach.
Successful agile transformation requires buy-in from the entire organization, from delivery teams all the way up to the executive level. The main challenge is how to move away from practices that have worked in the past toward better future solutions.
It is critical that leaders understand that this change in ways of working can help achieve the real benefits enabled via agility through a agile transformation focus on outcomes and a clear alignment of delivery that realizes customer and business value.

Addressing culture holistically

While distinct, these three culture levels are interconnected, and they collectively shape an employee’s understanding of their work. It is therefore important to address organizational culture holistically to tap into individuals’ intrinsic motivators and hidden character.
Even if agile adoption may appear successful in the beginning, when evidenced by formal structures and language, we need to be conscious of individuals’ real beliefs and understanding of the new environment to drive agile transformation success.
Tools and practices must be supported by the values espoused by the agile philosophy, and those values must be supported by core assumptions.
In other words, daily meetings, a horizontal hierarchy, and/or iterative design methods all require commitment, participation, responsibility, and open lines of feedback, which in turn must be underpinned by an openness to creativity and innovation, as well as trust in the competence and expertise of employees.

Ensuring a successful transformation

The truth is that paving the way for agile transformation requires organizations to dig deep and take a hard look at ‘the way we do things around here, marrying that up with fundamental changes to how they work to instill a new essence in their culture.
The key to any successful agile journey is targeting and encouraging newly adopted values and underlying assumptions in the workplace, bringing about a gradual adoption of a holistic organizational mentality This is the real transformation, and while not easy to do, there are tools we can use to ‘manage’ this change:
Buy-in from the entire organization, from delivery teams to executive leadership – Organizations cannot succeed in becoming agile unless all parties involved are willing to support the transformation and reward its outcomes – a chain is only as strong as its weakest link.
Leaders should be coached in the new way of operating, so they understand what is required, how to exhibit model behaviors, and how to ensure successful adoption within their teams.
For delivery teams, in addition to training, we need to connect their personal objectives and contributions to the overall strategy using effective objectives and key results.
Foster an environment that encourages learning and allows for occasional failure – Successful agile companies need to experiment and learn, and people should feel safe to occasionally fail along the way to innovate successfully in the end.
Trust in people and their expertise – People need to feel trusted to make good decisions and bring ideas to the table.
Setting up the right organizational structures is key to empowering a federated leadership that encourages teams to make their own decisions based on their valued expertise. Over-control will result in constrained employees, practices, and progress.
Develop a culture of collaboration and shared responsibility – Communication and feedback are perhaps the most fundamental principles of agility, and therefore a critical aspect of an agile organization.
Leaders need to be inclusive and supportive of their people, involving them in decision-making, sharing design ideas, and shouldering responsibility for business success.
Introducing transparent planning cycles, backlog formation sessions, and the regular use of collaboration tools and positive language (to name but a few) all encourage collaboration – both horizontally and vertically – within an organization as well as instill a shared sense of responsibility to deliver on the overall strategy.
This article was shared with Prittle Prattle News as a Press Release.
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