In agile desksharing spaces, the hierarchy has further lost in importance due to the choice of seating, and in return self-coordination has gained space. With home office, workplaces have adapted to the World Wide Web. Except perhaps for the speed of Internet access and good hardware, there are hardly any distinguishing features left by which hierarchy could be recognized.
Do we actually still need leaders in times of digitalization? In recent years, we heard many voices calling the end of the hierarchy. One reason for this is the rising speed of technological progress, wherefore, those who have the expertise should make the decisions. We are living in a know-how economy. The average level of education has increased over the decades. Experts have gained more power within the company because they get more job offers from competitors. Whether a person with certain know-how feels comfortable in the organization or not has to do a lot with the leadership culture. Good arguments should prevail. If a leader shows off his hierarchical power, the willingness of the expert to leave the job increases. The impact of decisions can also be much easier and faster evaluated since most relevant information is available within a click on the internet.
Nevertheless, hierarchical leaders don’t need to be afraid that they will die out like dinosaurs one day. This has good reasons:
- Managing directors have legal responsibilities and have to delegate some of them. In the case of a work accident or insolvency, it is the responsibility of the top management to deal with it and not the responsibility of the experts.
- The hierarchy also has an important efficiency function, which is: resolving stalemate situations. Probably most of us know similar situations: different opinion-makers repeat their points of view and arguments but do not adequately respond to the arguments of the others. As a consequence, not only valuable time passes but also the working climate gets worse in protracted stalemate situations. Maybe both approaches could work well, maybe it’s just that different values and personalities clash together. The more complex our world becomes, the more likely, decision-making processes can turn in circles. In this case, it is the task of the line manager to bring about a decision or to make the decision himself/herself.
- The leaders who are legitimized by the owners tend to be responsible for the corporate strategy as well. If employees from as many levels as possible are involved, there is a higher change of identification but the leaders must coordinate this process. In some cases, they even have to give clear instructions: for example if the employee and company goals do not match when it comes to change processes.
In some situations, a hierarchical leader is needed, for instance in stalemate situations. In this case, the leader has to facilitate the decision-making process or make decisions herself/himself.
Although lateral leadership is on the rise, it still needs both leadership approaches. How many consistently democratic company government systems (e.g. holacracy) have survived for more than 10 years? Very hierarchically organized companies are currently not in the winning position either. The right balance seems to count. And what representatives of situational leadership have said for a long time already, it depends on the specific situation.
O’Reilly III and Tushman went in a similar direction with the ambidextrous idea: Businesses are facing two quite different challenges during the digital transformation:
- To disrupt themselves through innovation and thus avoid being disrupted by others and
- as soon as the innovation arrives in continuous implementation, ensure that the relevant processes fit and are actually being lived.
Innovation management needs more lateral leadership, while process management needs more of hierarchical leadership. However, when processes are being defined and continuously improved, it takes again the input of many, especially from the people who work with it on a daily basis. In that case, lateral leadership can help. Even the control of the implementation of processes can be mostly done by transparent self-monitoring, for instance using KPI boards. On the other hand, it is also helpful for the innovation management if the company or the divisional management set strategic guidelines to move the development in the direction of the company’s vision.
Summary: We can say that the right balance between lateral and hierarchical leadership increases the probability that the best solutions prevail, that the employees are happy to participate which in combination usually leads to business success.
What serves you next?
Why do we need a new leadership approach? What are the reasons for that? The simplified answer is that our society and working conditions changed over the past years. Gunther Fürstberger, an expert in lateral leadership and CEO of MDI, explains why lateral leadership could help you to master the challenges of our times.
We can all see and feel that our world changed over the past few years due to the digitalization. But what are actually the core changes of the digital disruption? Khan identified 6 of them – interconnectedness, the abundance of information, increased complexity, increased transparency, less hierarchical and more empowerment, and the man-machine cooperation. What does that mean for leaders and companies?
The jungle of agile methods is so big that you can easily get lost in. Some methods are known better such as Scrum or Design Thinking. To get a better understanding of the big picture, we got down and worked out the 3 principles behind the main agile methods: Transparency, iteration, and empowerment.
The jungle of agile methods is so big that you can easily get lost in it. Some methods such as Scrum, Design thinking, OKR are better known and used more often. But here, too, companies experience that complete introduction of e.g. Scrum is associated with too much set of rules for some employee groups and therefore is impractical. To achieve quick wins, it would be helpful to know and apply the principles behind it.
So, we got down to work at MDI to filter out the principles behind the main agile methods. We came across 3 main principles: Transparency, iteration, and empowerment (TIE)
Behind each lie a few detail principles:
- Visualization and if possible making it tangible
- Simplicity and standardization in the method
- Early and continuous delivery
- Experimenting is more important than detailed planning
- Frequent evaluation and incremental solution development
- Short work cycles (time-boxed) and prototyping
- Fail fast to succeed sooner
- Lean management and continuous improvement
- Lateral leadership is more important than hierarchical guidance
- intrinsic instead of extrinsic motivation
- focus on the purpose
- Multidisciplinary team focus instead of lone fighters
The 3 principles behind agile tools – empowerment, iteration & transparency can be a good starting point for successfully managing your way through the agile jungle
Many companies are agile in their corporate culture. The 3 Principles (TIE) are a good starting point to tie an agile leadership and corporate culture. As a check-in we can start with a position determination in which we ask ourselves as a person/ team/organization the following questions:
How transparent are we?
- Can e.g. everyone in the company see the goals and goals achievement of everybody else including the CEO?
- Is there clear visibility on which projects are currently being worked on and does everybody have the opportunity to provide input?
- Do we have clear internal processes for structuring everyday business? (e.g. Kanban Board, Daily Stand-Ups, Meeting Structure, …)
How iterative do we proceed?
- Do we first want a perfect solution before we show it to the customer or is the (internal or external) customer regularly involved in the development of the solution?
- Do we make regular interim evaluations?
- Are we open to adapting our solution to changing requirements during the process?
How much empowerment do we allow?
- Is our leadership more based on convincing and commitment, or hierarchical authority?
- Are our employees motivated by autonomy, mastery, and purpose (DRIVE)?
- Are our teams organized in an interdisciplinary and autonomous way to work as efficiently as possible on a project?
In addition, we can use these main principles to make the training and development concept of a company fit for digital transformation. By e.g. evaluating if and how these principles are currently used in the
- Competency Model
- leadership and cooperation principles/rules of play
- and possibly even in company values.
If e.g. an automobile producer defines himself by perfection and thus needs long innovation cycles, it will make sense to consider to what extent iteration should replace the delivery of perfect solutions.
Or if confidentiality plays a central role in the financial service, then it might make sense to create a culture of transparency in at least some areas, where e.g. MbO is replaced by OKR (insert link to past blog).
As a third example, let’s take a look at retail: Here, in many businesses, it is common for a small number of head office employees to define the processes and rules for many thousands of employees in the stores. A shift towards empowerment means at least interaction on eye-level and a much greater involvement of employees at the point of sale.
What serves you next?
The world we live and work in is constantly changing, due to the digitalization and globalization. Changes are happening so fast that we can barely build on a solid ground. To lead your company successful through this digital disruption it is essential to keep an eye on the approaching waves of change. Gunther Fürstberger explained what you need to successfully respond to those changes.
At the beginning of 2017, we started to implement agile methods at MDI. The first method we introduced was the agile goalsetting system OKR (Objective and Key Results). Since then, we tried out many other agile methods and learned many new things. Being inspired by the story map of HR Pioneers, we as well visualized a “Change journey map” and looked back on almost two years agile leadership at MDI.
The whole agile leadership idea is based on the observation, that accelerated change is the norm. What does that mean for change management? The classical concepts of Kübler-Ross (change curve) and Kotter (8 steps model) are still a good inspiration to describe what happens in change and what to do, but perhaps not sufficient to deal with agile transformation.
Agile transformation usually means that a whole company or business unit is becoming agile. Many companies are striving for that. There are 2 main approaches: Big bang and incremental.
Paypal is an example for a successful big bang transformation moving 510 cross-functional teams from waterfall to agile within less than a year. They moved from project-driven to product-line discipline in order to develop clear accountability and intense customer focus. Productivity and profitability rose significantly.
Most companies go for incremental, which can also work fine. It depends on how big is the urge for change and on the organizational interdependencies. If e.g. agile teams depend on waterfall teams and the delivery does not work smoothly, it might be better to change the approach in the whole business unit at the same time. Incremental is already an agile principle and it is better to start somewhere in the organization than to postpone to a future far away.
As I only want to write about things, that I have personal experience with, I want to share our own agile transformation story. I am the CEO of MDI – Management Development International. MDI provides leadership development solutions. In 2016 we have been invited to support the implementation of OKR (objectives and key results) in an international top brand company with approx. 300.000 employees. We decided to introduce OKR to our own company with about 40 employees and 150 freelance trainers first.
This was like a domino stone falling and generating a chain reaction. We decided to also implement a rolling budget, changed to a customer-centric team structure, adjusted our mission and vision statement and started to try out one agile method after the other. Some stayed one time experiences and others became routine and part of the company DNA.
After a while, we thought it would be helpful to have an overview of what we are doing in which areas, in order to develop in a balanced way. Being inspired by the Story map of HR Pioneers*, we visualized a “Change journey map”:
This Change journey also helps to
- become aware of the progress in the phases of agile transformation and motivates to continue
- find the right balance between day to day business and investment in the agile transformation
- decide what you want to try out once and what you want to make a routine.
We are aware, that there is a long way to go for us and that there will never be an end, as the digital evolution continues to speed up. But the Change journey overview helps to be in the frontline of digital disruption.
*Informatik aktuell Sept 2017, Hendericks
What serves you next?
Digitalization is a global megatrend that forces almost every company to change significantly. But what are the main characteristics of those changes? Khan identified 6 core changes of the digital disruption – interconnectedness, abundance of information, increased complexity and transparency, less hierarchical and more empowerment and man-machine cooperation. But what does this mean for a company?
Due to the digitalization, the world we live and work in has become more and more fluid and is constantly changing. Changes are happening so fast that we can barely build on a solid ground. Therefore, it is essential – as a leader – to keep an eye on the approaching waves of change. Gunther Fürstberger explained what you need to successfully respond to those changes.
In 2017, we started to implement agile methods at MDI. The first method we introduced was OKR (Objective and Key Results) – a goal setting and modern leadership system which was invented by Intel and is used by companies such as Google, Airbnb & Co. After 6 months of working with OKR’s, we could already see significant changes. Read more about our experiences and the meeting structure of this agile method.
Digitalization is a global mega trend that forces almost all companies to change significantly. But what are the main characteristics of those changes around us? If we understand better, what is changing in our environment, we have higher chances to work on the right adjustments within the organization in order to reach a better fit with the environment.
The starting point is technological progress: Binary code, microchip, internet, big data, internet of things, artificial intelligence, physical products (combi of digital and reality), intelligent personal assistants etc. have and will continue to change our day to day life.
This technological progress led to some main changes in how we work and live together. On the basis of Khan’s* work we identified 6 core changes:
- Abundance of information
- Increased complexity
- Increased transparency
- Less hierarchical, more empowerment
- Man Machine cooperation
Billions of smartphone users can interact with each other without time delay. Experts are forming worldwide research networks, crowdsourcing allows to receive many ideas, financial resources etc. with little cost and time investment.
2. Abundance of information
It can be a blessing and it can be a curse. We can access most relevant info in our vicinity or from the other side of the world. Some people rather look at their Smartphone in order to see, how the weather is than looking outside the window. Highly paid software developers are pretty good in seducing us to spend more and more time with applications and to activate the push notifications.
3. Increased complexity
With the increased speed of change and more and more people sharing the same space, complexity goes up. In most cases, organizations need to increase internal complexity in order to get along with external complexity. E.g. a retail has to build up an online shop and blend the physical and online world, find a way to balance classical retail management with the agile world of online development …
With the increasing speed of change, the complexity goes up as well
4. Increased transparency
Nowadays it is very difficult to keep a higher level of privacy. Cameras everywhere in the city, iPhone search function, Google earth, Facebook etc. make our day to day life very transparent. If somebody wants to find out, whether the spouse has an affair, this should not be too difficult anymore 😉. At the same time, you can run a business on other continents with e.g. using Google docs, Yammer, Trello and many other kinds of cloud software.
5. Less hierarchical, more empowerment
In a knowledge economy, people want to have a say. And they also need to be empowered to make decisions close to the client or the technical challenge. Hierarchy is too slow. Laloux’s reinventing organizations, holocracy, lateral leadership etc. point at democratic alternatives. Hierarchy loses influence but will not fade totally.
6. Man-machine cooperation
Anorganic entities with some digital steering (programs, bots, robots) and humans work side to side. We find thousands of example in industry, medicine, business, travel etc.
In the metaphor of the , these 6 core changes describe, what the waves are made of. Each wave is unique. Nevertheless, waves have common patterns. If we know how to read them, we will be successful in picking and surfing the next wave.
Article written by Dominik Etzl und Gunther Fürstberger
*Shayan Khan/Tikkanen (Stockholm Business School 2016)
What serves you next?
How should we respond to the waves of change? The world we live and work in has become more and more fluid over the past few years. As leaders, we have to react to these changes to lead our business successfully through this time of disruption. Gunther Fürstberger explains in this article how to perceive the opportunities and the creative potential of the waves of changes.
Many leaders are asking themselves the same question nowadays: Why do I do what I am doing? What do I contribute and what is the point of all of this? Anita Berger is MDI Managing Partner and accompanies international organizations for many years already. For her, one of the most important things in this context is the purpose. So what should you, as a leader, keep in mind when answering the questions above?
What are the consequences of the digital revolution for leaders? Due to the changes in our business world, a lot must change on the leadership level as well. In short: a new leadership approach is needed. Therefore, we need a new leadership mind-, tool- and skillset.