The transition from a traditional company to an agile one is difficult to understand and difficult to apply. It is the scene of that Inception motion movie with realities that contain each other. The iteration of implementing a project's solutions is contained in the iteration of transforming the company as a whole. When companies are founded and base their development on an agile approach, it is simple; much more complicated is for the already existing companies. Therefore, this is the subject we will talk about: the transition to agility of traditional companies.
Agility started with a set of 4 principles relevant to software development, but whose widespread relevance has been demonstrated in other areas. These are iterative development, repeated launch, consumer focus and collaboration through interdisciplinary teams. While many traditional companies have embarked on the path of agile transformation, most have faced real challenges in achieving the desired goals in this direction. Some of the causes of these difficulties are:
1. Non-alignment with vision and projection of the value of agility
Prior to any initiative to adopt agility, leaders must align their expectations and understand the associated value. Agility also involves reorganizing the company's operating model. If leaders act asynchronously, different approaches are likely to be taken to implement agility or, worse, for some leaders to oppose maintaining the status quo.
Once the factors that generate value are identified, they are then used throughout the transformation, from designing the operating model to ensure value generation, to setting indicators to monitor the value generated. Companies that do not do this limit the impact that transformation can have.
2. Not giving a strategic role to agility
Agility does not mean piloting projects with the help of a few managers in a small part of the company. Although these initiatives are useful and can be successful, their limited impact prevents the management team from seeing the strategic potential of agility.
Often, after several pilot projects, funds are reallocated to new initiatives unrelated to agility. Therefore, in order to have an impact, agility must make the transition from the periphery of small experiments to the centrality of strategic decisions. Otherwise it fails in the well-known reply "I tried, but it doesn't work for us".
3. Ignoring the organizational culture of the company
Because agility transformation can help stimulate significant cultural change, the so-called "company culture" factor matters a lot. Transformation through agility helps increase customer focus, collaboration, team learning and more. These skills often require giving up some pre-existing ways of working. The company's culture is defined not only by employees but also by, or especially by leaders. For leaders who want to implement agile transformation initiatives, the major question they are asked to answer is: "How much are you willing to give up control?"
4. Neglecting employee training
Each employee proposes himself through his skills and abilities relevant to the company's success. Successful companies are the ones that select the most talented, they care that they continue their development and, with their help, grow the company. So the talent of each employee contributes to the success of the agile company. This is how companies like Amazon, Tesla or Netflix manage to create multidisciplinary teams with experienced members.
Since the transition from a traditional company to an agile one is not so much about tools and IT systems as it is about people, it is good to find answers to the following questions: How will these employees be supported as they move to an agile way of working? How will their career path change? How will performance be managed in the new organization?
Are these the only challenges that arise in the process of transitioning from traditional companies to agile companies? Of course not. There are others. Can these be prevented? Of course yes. Understanding the level of complexity of agile transformation is the first step for the management team to succeed in this endeavor.
About PKF Finconta
For more than 26 years, PKF Finconta is one of the 10 leading professional services companies in Romania. Since 2006, we are a member of PKF International Limited. PKF International is a leading international business advisory organization. The company grew consistently over the years, forming a Group of four companies: PKF Finconta, PKF Finconta Consultanta, PKF Finconta HR, and Finconta Consulting SPRL, members of national professional organizations CECCAR, CAFR, CCFR, and UNPIR. We provide a wide range of business advisory and related specialist services. We have seven core areas of expertise and within these areas, we tailor our services to your business and your needs: audit, corporate finance, tax, bookkeeping, and accounting advisory services, transfer pricing, payroll and personnel administration, and insolvency.
