Jürgen Hemmer – Enterprise Transformation Circle / We bring companies together to share experiences, analyze pitfalls and develop best practices for your successful enterprise transformation. Fri, 16 May 2025 10:54:05 +0000 en-US hourly 1 https://wordpress.org/?v=6.8.1 /wp-content/uploads/2021/10/cropped-entrance_Logo_Kreis_blau-32x32.png Jürgen Hemmer – Enterprise Transformation Circle / 32 32 Transformation Methodology /circles/transformation-methodology/ Tue, 08 Aug 2023 16:30:39 +0000 https://enterprisetransformationcircle.com/circles/transformation-methodology/ Enterprise transformation is a complex process which impacts every aspect of the enterprise. Most companies are struggling for various reasons, e.g.

  • No comprehensive frameworks or methodologies
  • Many parallel activities including business transformation, modernizing of IT, and development of employees
  • Unclear requirements and rapidly changing market conditions
  • Lack of top management commitment
]]> Is “Agile” Really the Way to Go? /best-practices/is-agile-really-the-way-to-go/ /best-practices/is-agile-really-the-way-to-go/#comments Mon, 12 Dec 2022 08:30:28 +0000 https://enterprisetransformationcircle.com/articles/is-agile-really-the-way-to-go/

Spotify, Google and many other companies owe their success to the way they adopted the “agile” methodology. They continuously improve their agile working method and adapt it to company growth. Especially Spotify published its agile approach and anyone interested can read about how its agile framework works. Frameworks like SCRUM, SAFE or LeSS have a really good level of maturity, they only focus on other aspects. SCRUM focusses on a single team, SAFE on an enterprise. All these frameworks are developed in a different environment. 

As with any use of framework, the success of its application depends on the way it is adapted to the specific environment.

This article highlights some observations that will enable you to improve the implementation of “agile” in your company.

Weaknesses in Implementation

Of course, many mistakes can be made when implementing agile frameworks. Table 1 shows an exemplary list of frequently occurring errors without any claim to completeness.

Table 1: Possible errors in the “agile” implementation

But there are structural impediments as well:

In our economy, which is based on the division of labor, it is often the case that several companies supply parts of a product within a supply chain. The motivation for such supply chains often lies in the attempt to achieve cost transparency or to shift risks to specialized companies. If you try to squeeze the entire supply chain into an agile team, the only remaining contract form is ‘Time & Material’, since you cannot bindingly define or guarantee any product properties. However, this transfers the production risk back to the client and cost transparency is no longer a given. In well-established customer-supplier relationships, it is often the case that work contracts are retained, despite agile working methods. In this case, however, the client runs the risk of numerous change requests, which often results in significant cost increases. 

To prevent such effects, the company’s boundaries must be considered when defining agile teams. Unless the client can live well with a ‘time & material’ contract and its consequences.

Another obstacle is the agile transformation of companies, which is a process and cannot be achieved via a big-bang scenario. As many agile teams repeatedly encounter non-agile teams, whose deliverables they depend on, but often are not received in the time required. This makes it almost impossible to prioritize requirements with the greatest value to the customer or the greatest risk.

Factors that Influence Agile Implementation

The degree to which these implementation weaknesses are manifested is different in every company. Let’s look at the factors affecting agile adoption:

Figure 1: Influences on the implementation of agile in companies

Figure 1 shows that the implementation of agility in companies can look different depending on the various factors and their individual weighting.

An organization that has previously championed the waterfall model and placed a great deal of emphasis on formalities will define the first implementation step of an agile organization quite differently than an organization where collaborative work is already established throughout the company and employees are given much freedom for decisions-making. 

Nevertheless, both can become successful agile companies, if they can successfully instill agile thinking in the workforce and management. After all, an agile company is in principle not a stable state. An agile company permanently adapts to changes in the market and optimizes itself. To ensure that this happens intrinsically, “retrospective meetings” are of particular importance. Here, critical points are brought to the table and each team changes the approach, communication, or tool. 

Courageous teams will take bigger steps than, for example, teams in companies where mistakes are treated as a defect.

Agility – a Low-Hanging Fruit?

There are many well-developed agile frameworks such as SCRUM, SAFE and others. There are also enough experienced external consultants or employees available, who have already gained experience with agile procedures in other companies. One might think that switching to business agility is therefore easily achievable. But is it enough to simply introduce SCRUM and avoid the mistakes mentioned above? Will everything be fine? No!

This is because agile frameworks, while very good, only cover the process level.

A company’s business agility depends on three levels: the strategy of the business, the processes, and the IT systems.
Figure 2: The 3 Level of Business Agility

If one of these levels is unable to keep up with the pace of the others, it slows down the entire company.

If the business strategy does not put the customer at the center of the action, the introduction of agility may lead to improvements at the process level, so that designers work better with the engineers. However, you still do not know the customer’s expectations and therefore cannot meet them. Negative examples of technological progress without benefit to the customer are, for example, the small gaps in car production or laptops that fit into envelopes. A positive example from the B2B market of a product that offers added value to the customer is the cloud solution. Here the solution is readily available, and the customer is not forced to set up his own operating unit. The customer can tangibly feel the added value from using the product.

When it comes to IT systems, we have to say goodbye to monolithic solutions, which we have grown fond of, and which are extremely mature in terms of functionality. Many teams have adapted these solutions to the extent that they, too, are able to put a release into production every month. However, this hardly shortens implementation times. Monolithic solutions have numerous dependencies and therefore a need for high test coverage. On the one hand, this ties up important resources to execute testing, or test coverage is reduced to meet the deadline. Both options carry a high risk for achieving business agility.

Converting these IT systems, however, presents many companies with major challenges. Generally, such a rebuild is expensive and oftentimes does not offer the business any new functions. The intermediate states can also lead to additional manual work for the business. To achieve business agility, however, this transformation of IT systems is necessary.

Unequivocally, the introduction of business agility is a multi-faceted program that involves notable effort and therefore requires appropriate management attention.

Agile Employees – Stable Management?  

What does it look like when agile teams start their work?

Agile teams organize themselves. The iterative approach points to the fact that projects and their content cannot be clearly defined at an early stage. Due to this, some companies have concluded that middle management is no longer needed. In my opinion, this is an exaggeration of the agile idea, causing more harm than good to the company. Agile teams pursue the goal of providing an optimal product for the customer. However, companies usually don’t have just one team, so it can lead to the situation where, for example, one team only provides face-to-face customer contact, while the other only provides self-service. The company will perceive this inconsistent appearance as negative.

Self-sufficient teams, who look for their work tools on the free market constitute another example. Without management, this leads to the purchase of many different tools for the same task, thus increasing the company’s fixed costs.

So, without management, it doesn’t really work.

Management in an agile company is different from management today. An agile company carries change in its DNA: teams optimize themselves, markets change, new markets are to be developed.

In agile companies, management defines the principles and characteristics the company wants to live by or achieve. A manager should also set himself the goal of coaching his employees, emphasizing the value of soft skills. After all, collaboration requires proper interaction! Agile teams, therefore, need guidelines and frameworks to organize themselves and focus on their goal.

Even an agile company cannot do without control mechanisms to ensure compliance with these specifications. 

In order to support the agility of teams, these mechanisms must, of course, be adapted to the team’s agile way of working. This aspect, too, must be solved by each company individually in a way that fits the individual situation. As the agile maturity level increases, the control mechanisms must also be adapted again and again.

Summary

When considering American tech companies, such as Google, Spotify, Facebook, etc., it is apparent that the “time-to-market” factor has becoming increasingly important when introducing new business models, because the first provider occupies most of the market – ideally, almost the entire market. Successors and imitators hardly have a chance to conquer large market segments. For companies to be the first to occupy new markets, the adoption of agile is critical.

Standardized solutions that fit every company and deliver at the same success rate everywhere do not exist. 

The challenge to any agile initiative is to find one’s own solution for the specific situation at hand and to match the maturity level of the organization. And the intermediate states that are achieved as part of the process, require the appropriate management attention, because they are often fraught with shortcomings and weaknesses and must be supported by the employees. Merely the introduction of SCRUM (or other agile frameworks) to implement business agility is not sufficient, because the strategy of the business unit and the architecture of the IT systems also play an important role. The first implementation step of agile must fit the business. The rest of the journey requires well-articulated principles, a specified target state, guardrails, and meaningful governance. If you manage to move your initiative into this direction, the answer to the question posed at the beginning of this article will increasingly be:

“Yes, agile is the way to go!”
]]> /best-practices/is-agile-really-the-way-to-go/feed/ 2 Agile Sin #1: Poor Processes /agile-sins/agile-sin-1-poor-processes/ /agile-sins/agile-sin-1-poor-processes/#comments Mon, 01 Mar 2021 17:10:33 +0000 https://enterprisetransformationcircle.com/best-practices/agile-sin-1-poor-processes/

You are not alone if you experience shortcomings and inefficiencies of processes in your work environment. For example, because the collaboration between departments is poor, co-workers lack the know-how, vendors are not appropriately managed, different stakeholders have diverging interests, or because of many other reasons. Interestingly, problems like that can persist over a very long time and even inherited from one generation of employees to the next. People tend to ignore poor processes if there is no simple way of fixing problems, and nobody is held responsible for the end-to-end process performance.

Situations like that have a severe, long-term impact on the health, morale, and efficiency of the workforce. Employees suffer from the high workload and unsatisfactory work results. In the perception of the employees, the company is not trying hard enough to solve the problems. They become frustrated and wearily.

Motivated by success stories like Spotify or Google first teams in enterprises start working agile. 

So, the way a company becomes agile often starts bottom up. The success of these first agile teams is based on agile frameworks like SCRUM, SAFE, or LeSS.

These frameworks guaranty a smart start in the agile world and generate quick results, e.g. quality improvements, or better time to market. This success is visible to the top management, and soon business agility is identified as an enabler to becoming more flexible to meet new market requirements. The board members initiate an agile initiative to introduce an agile framework in the whole company. They act in this way with the hope that this initiative will change the way of working more or less in the existing organisational structure.

We see several issues with this approach:

If you are lacking or – even worse – ignoring knowledge about inefficiencies, workarounds, and political disputes, you probably find their agile cousins popping up in your agile organisation.

But even if your processes are in good shape, not every process serves a highly dynamic market and must be changed to an agile approach. Sometimes it is sufficient to review the existing process and launch a new version with improvements to achieve goals like cost reduction, flexibility, or speed. Furthermore, other processes better stay as they are because they are given by customers and regulators, or constraint by law or other standards.

Why is it so difficult to fix process problems?​

What makes process improvements often so tricky is their impact on multiple stakeholders. A change that might satisfy one stakeholder upsets another. Changes may also have personal consequences, i.e. some individuals can lose power, control, or reputation.

In agile initiatives, there is another problem. The percipience of process management is very formal, often impeding creativity and pragmatic solutions. So, processes are not the priority when you start an initiative to introduce business agility. In addition, some agile coaches find it disturbing and cumbersome analysing the process landscape and their ugly details. They feel that it is their job to overcome the limitations of old-fashioned processes and therefore tend to avoid process analysis.

The blind spot of the agile textbook​

The agile manifest describes properties of agility, gives orientation on what behaviour has a higher priority and which one a lower. But it does not explain how the agile way of working looks like in a day-to-day business. To some extent, agile frameworks like SCRUM, SAFE, LeSS, or others fill this gap. These frameworks describe the agile way of working for a team or enterprise and provide useful definitions of roles and responsibilities. For example, SCRUM is very lightweight – it focusses on how one team should work in an agile manner. SAFE is made for the enterprise level. It delivers an implementation roadmap and gives some abstract recommendations about the target picture of an agile enterprise.

But no framework defines critical preconditions or even support from other disciplines if the preconditions are not met. 

So, every enterprise which is aiming at becoming agile must individually identify what preconditions must be fulfilled before starting.

And this is a critical blind spot of existing frameworks.

Recommendations​

We recommend defining a work package that analyses the process landscape and answers the following questions before or at the start of an agile initiative:

  • Is there comprehensive process documentation, and does it match reality?
  • Are there processes that are given by a third party, e.g. customer, partner, or regulator?
  • What is the volatility of the processes?
  • What are the external dependencies – e.g. interfaces to other organisations?
  • Are there known shortcomings in these processes?
  • Are there disciplines that must define the margin for an agile team that should be responsible for the considered process?

We recommend addressing potential issues right away. Otherwise, people will blame agile for poor processes.

Summary

Companies need to be agile because of rapidly changing market conditions. So most probably their processes change often and fast. Therefore, fixing a concrete issue of the company`s processes is desirable, but it does not increase the agility in the long run. The better way is to define what “properties and principles” the new agile company should fulfil. For example, when business units are weak in describing requirements accurately, one might want to formulate the principle that each significant step in a company process needs to have an agile team that is responsible for it. These properties and principles give guidance to every team member.

Another significant point in the process landscape is the block of governance processes. Agile teams should, and are strongly motivated to, work independently and take responsibility for their decisions. The question is whether or not an agile organisation needs governance processes. Some agile coaches say no. But is that really an option? Is an agile team able to terminate a contract with an important customer or their own mother company? Can an agile team ignore compliance requirements? Surely not! The need for governance in an agile organisation is as crucial as in organisations today. Cross-cutting teams like legal, compliance, enterprise architecture, and others have the responsibility to give agile teams a framework of guidelines and principles, consult them in all phases, and govern them if a team tries to deviate rules, guidelines, or principles.

]]> /agile-sins/agile-sin-1-poor-processes/feed/ 2 2.4 Pressure on Employees /digital-cookbook/part-1/pressure-on-employees/ /digital-cookbook/part-1/pressure-on-employees/#comments Tue, 31 Oct 2017 23:00:00 +0000 https://enterprisetransformationcircle.com/best-practices/pressure-on-employees/

Today, global competition drives many traditional companies to increase pressure on their employees. Companies use new digital media such as email, online messaging and smartphones to raise expectations of employee reachability, intensify working processes and enhance control.

Under this model, employees are considered resources. Reorganisations, work intensification, out- and insourcing activities etc. lead to an increasing alienation of employees from their companies. At the same time, market pressure urges companies to adapt to global supply chains and flexibly react to ever-changing customer demands. Innovation cycles are shrinking with tremendous speed. While a company might be flexible enough to meet such challenges for a while – for example by physically moving production to a more favourable location – its employees might not have similar flexibility.

Applying traditional methods to meet the challenges of the digital age will always lead to the dehumanisation of work.[1],[2]

Conversely, many companies do not yet use the merits of the digital age to empower their employees. They apply the same processes, stick with their inherited organisational structure and foster the same old corporate culture, which worked fine in the industrial age. By doing so, they misjudge the fact that a sustainable increase in efficiency driven by digitalisation goes hand in hand with new processes, organisational structures and culture.

The phenomenon of work-related diseases caused by mental stress is omnipresent.

In particular, the popular term ‘burnout’ summarises various mental health conditions from which all industrialised nations suffer. A steady amount of the wrong type of pressure leads motivated and productive employees to become sick and non-productive. The result is tremendous damage for the individuals as well as for the companies and society at large. For example, current figures in Germany show that the average depressed person was unable to work for 60 days of the year in 2014. This is an increase of 135% compared to 2003.[3],[4]

In 2014, 1.6% of Germany’s working population fell ill with some form of depression, resulting in the loss of 40 million workdays.[5] The figures in other industrialised countries are similar.[6],[7],[8],[9]

Literature separates the risk factors for burnout into two categories.[10] On one side are personal risk factors, such as low self-esteem or the pursuit of perfection. The second category refers to external factors, which include risks due to the working environment, such as permanent overload, contradicting goals, work instructions contrary to personal values, lack of meaning and appreciation, environmental conditions, night and alternative shifts, an ever-changing organisation, permanent disturbance, fear of job loss, lacking autonomy, ubiquitous control, ruthless colleagues, etc.

Interestingly, digitalisation has the capability both to amplify existing risk factors and to mitigate them.

Especially in global companies with virtual teams and flexible workplace concepts, there is a huge potential either to damage the organisation or to strengthen it. Due to new organisational and communication concepts, along with increased transparency, digitalisation opens up the opportunity to create a new identity for the employee alongside the digitally transforming company.

However, this will only succeed if ethical and social principles are an integral part of the digitalisation contract. Digitalisation allows certain risk factors to be turned into advantages:

_____
[1] Illek, C. O.: ‘Die Menschen mitnehmen – Wir laufen Gefahr, als Wissensgesellschaft zu versagen, und gefährden so unsere Zukunft’, Die Süddeutsche Zeitung Online, 2015.

[2] Wander, F.: ‘Transforming IT Culture: How to Use Social Intelligence, Human Factors and Collaboration to Create an IT Department That Outperforms’, Wiley CIO Series, p. 2, 2013.

[3] Grobe, T. G., Steinmann S.: ‘Depressionsatlas – Arbeitsunfähigkeit und Arzneiverordnungen’, Techniker Krankenkasse, 2015.

[4] Rennert, D.: ‘Zahl des Monats Juli 2015’, BKK Dachverband, 2015.

[5] Hahlen, J.: ‘Arbeitsmarkt – ILO-Arbeitsmarktstatistik’, Statistisches Bundesamt, 2015.

[6] ComPsych: ‘Loss of productivity among employees in North America due to stress in 2014’, Statista, 2014.

[7] Johnson, M. W.: ‘Burnout Is Everywhere – Here’s What Countries Are Doing To Fix It’, The Huffngton Post Online, 2013.

[8] Health and Safety Executive: ‘Work-related stress, anxiety and depression statistics in Great Britain 2016’, Health and Safety Executive, 2016.

[9] Prinz, C.: ‘How Your Mental Health May Be Impacting Your Career’, PBS Newshour, 2013.

[10] Stock, C.: ‘Burnout: Erkennen und verhindern’, 2nd ed., Haufe-Lexware, pp. 29-66, 2015.

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