ISG’s Agile Enterprise Summit took place in Boston this week with leaders from Zappos, the Consortium for IT Software Quality, Target and Quicken Loans, among others, sharing their expert perspective on how enterprises can transform their businesses to be more agile and better adapt to changing environments. Here are three key takeaways from the event.
1. Creating an agile enterprise relies on successfully orchestrating change in culture, organizational structure and technical capabilities at the same time.
Changing enterprise organizational structure without changing culture and technology will lead to factors that drag down any potential transformation. It's equally true when addressing any one of the elements in a vacuum. Instead, enterprises must address all three at once, which makes for a tricky prioritization exercise.
In many cases, new solutions will lead to new problems that organizations must address as they arise. Agile teams enabled to self-organize and pursue customer problems with greater freedom may find themselves hamstrung by inflexible legacy technology. Changing technology to enable agility may uncover additional organizational difficulties, and so on. Agile transformation is a long journey, and enterprises must adjust on the fly to their own unique circumstances.
2. When making changes to drive agility, think about what SCARF everyone wears.
Missy Lawrence-Johnston, a principal consultant from ISG’s Organizational Change Management practice, suggested that leaders should remember a warm and fuzzy acronym when working toward change: status, certainty, autonomy, relatedness and fairness (SCARF). Developed by neuroscientist David Rock, this framework explains how individuals react to change based on perceived threats and rewards.
If a change negatively impacts someone on one of the dimensions they consider important, they’re more likely to push back on it. For example, a manager who cares a great deal about their status will probably have difficulty embracing an organizational shift that works to cut down on organizational hierarchy. But that same change could be highly valued by a rank-and-file employee who prefers greater autonomy. How people react is individual, which is why Lawrence-Johnston pointed out that in a meeting, everyone is “wearing their own SCARF.”
As enterprises make the changes necessary to embrace agility, keeping this concept in mind will make it easier to navigate the threat responses employees inevitably have.
3. Measure culture by the behaviors people exhibit at work every day.
ISG research shows that culture and team enablement are the most important factors when transforming into an agile enterprise. While culture can seem like something nebulous and difficult to pin down, it’s best evaluated by noticing what people do every day. Odds are, any employee of a firm has at least one story that illustrates what they see as the culture of the organization where they work. An enterprise’s culture is the sum of these stories.
Agile transformation requires some fairly radical changes for businesses that are used to working in a waterfall mindset. This often looks like a shift from a hierarchical, rule-driven culture that focuses on command and control to a collaborative, self-organizing culture with servant leadership. Implementing this degree of change takes significant work.
When changing culture, it’s not enough to put up a fresh set of posters with new values. Living those values and building organizational structures to support them is the key to success.
For more information about enterprise agility, see our research report Agile and DevOps in 2019: Enterprise Culture is Key or contact us to find out how we can help your organization become more agile.
