As organizations take on the Agile transformation journey, there are significant impacts on two key dimensions — the Organizational Culture and the Organizational Climate. This two-part article is an attempt to provide clarity on these aspects. It establishes who in the organization owns the Culture and Climate respectively and are accountable to the success of the transformation.
In the first part, we will focus on the definitions of these terms and how they are related. With a firm foundation on the definitions, we will then elaborate on the ownership aspects in next part.
Let’s start with the key question. What is Agile transformation and what changes does it bring?
Agile transformation is the process of an organization changing its discovery and execution approach from a Command-&-Control, Top down, Upfront Planning driven model to a Team Oriented, Collaborative, Just In Time and Iterative model. As you can see, its a complete inversion of the principles and – and hence the usage of the word Transformation. A change as dramatic as this runs broad (X-Axis) and deep (Y-Axis) into the organization’s fabric, and challenges the fundamental mindsets with which people do their daily jobs.
Let’s start with the X-Axis (breadth).
On the breadth side of the equation, the transformation brings people from different parts of the organization (erstwhile reporting structures) into single teams. These team members now work by directly communicating with each other instead of through their “reporting structures”. This is only the beginning — as the journey matures, teams realize the need to bring in wider variety of people into the Agile team to effective. Such pressure coming from the “bottom of the hierarchy” will challenge the organizational design. If the transformation has to succeed, existing organizational silos will need to be broken to make the teams more effective. At this stage the same leadership that was “excited” with Agile, starts resisting the change given its discomfort with the comforting barriers now giving way.
Now for the Y-Axis (depth).
The depth side of the equation is all about management styles, transparency and delegation. With the inversion of the execution model, the decision-making power on day-day execution shifts from erstwhile managers to the execution teams themselves. Teams will require greater autonomy in decision-making and transparent flow of information to facilitate the decision-making.
Information and decision-making that used to be the prerogative of the managers in the Command-&-Control world, and gave them a sense of power is now diluted. Managers now are required to focus more on aligning the teams’ direction to the organization’s goals and help remove impediments from the team’s pursuit of these goals set. Such a shift demands managers to communicate more outwards to the stakeholders and negotiate on alignment rather than on controlling inwards. On their part, teams are also now accountable to goals than to execute assigned tasks. As a consequence, the measures of performance also shifts from one of following plans and orders to meeting goals — a significant shift.
This shift in the operating model that demands a change in the mindset deeply influences employees’ daily work experience. This is the new Organizational Culture. Both managers and team members will experience discomfort and exhilaration in equal measure adopting to this model. While teams will fear responsibility and enjoy autonomy, managers will resent lack of control but enjoy liberation from the mundane. The organization is shifting to a new culture of self-managed teams and light (agile) management structures.
The leadership (managers at ALL levels up-to-the C-Suite) are responsible for owning up to this discomfort and taking the leap of faith that the shift to self-management is for the greater good of the organization. They are the OWNERS of the Organizational culture.
Is that all to the story? No. Your Organizational climate, the Z-Axis completes the picture.
The Z-Axis (depth).
As you can see from the above, the transformation WILL lead to major changes and challenge people at various levels — their hard skills, their soft skills, their definition of success and growth drivers – both up-and-down the organizational hierarchy (Y-Axis) and across the “department” verticals (X-Axis). Given the impact across so many dimensions, people across the organization will perceive this change with different lenses. The prevailing mood in the people will be directly impacted positively as well as negatively by this change. This constant “flux” in the mood from time to time as the organization transforms is your Organizational Climate. So, even as the Organizational Culture is changing, the Climate will also change. What’s important is to realize that the Climate is the “effect” and the Culture is the “cause”.
Who is responsible to sense the Organizational Climate? This is where HR has a pivotal role. The execution teams will be too busy with the culture to also focus on Climate. Its the responsibility of the HR leadership to provide a real picture of the mood swings and help the executive. In the next part of this article, we will explore the specifics of the HR Leadership in designing the Organizational Climate Assessment, and how they can be an active participant in the organization’s strategic journey.