In the first part of this article, we defined what Agile transformation is and what Organizational Culture and Organizational Climate are in that context. We also saw how Agile Transformation is a 3-dimensional change that affects the Execution Culture across (X-Axis) and deep (Y-Axis) and also the Climate/Mood (Z-Axis) of your organization.

We elaborated how the leadership in ALL execution teams that partner in this transformation has the responsibility to carry themselves and their teams through this cultural shift. At the same time, its the HR leadership’s responsibility to sense the Organizational Climate as the cultural shift occurs and support the teams with appropriate interventions to maintain a healthy environment of learning and growth.

Having an appreciation of how Agile impacts people, their roles and their responsibilities is key to designing how Organizational Climate is assessed and how as an organization you respond to it. The remainder of this article focuses on how Agile Transformation impacts the focus areas of assessment and also the intervention areas from the assessment.

What to assess in Organizational Climate for Agile Transformation?

Typical assessments of Organizational Climate focus on how well people understand their roles, their growth trajectories, skill requirements, confidence in the leadership and the effectiveness of the feedback process that leads to professional growth. It would also look at feedback on compensation and benefits, rewards programs and other softer aspects like diversity, values and alignment.

It will now be evident, that with Agile transformation inverting the ownership model in your teams, the traditional notions of growth, skills requirements and definitions of leadership will change. Assessing the team’s confidence of the leadership has to shift from their ability to direct, to their ability to coach. This also needs to be paired with finding out if teams are sensing an increase in their ownership domain as well as their comfort with it. It will be important to understand how collaboration between people of different skill sets are affecting team morale and power distances. Quite paradoxically, if you sense your organization doing very well and comfort on all these change dimensions, you could well assume that Agile transformation is NOT going right; it could also be a indication of fear to communicate the reality in your organization — a fundamental flaw that will kill your Agile Transformation journey.

How to engage the organization with Organizational Assessment?

A redesigned Assessment framework that accommodates Agile mindsets will help the HR organization support the leadership to influence the Climate. The lazy approach to use the Climate assessment is to ask leadership to go easy on those areas that are causing discomfort to the teams even if they are “growing pains” of the journey. E.g. if the teams complain that managers are not engaged in the day to day tasks of the team and resent the “aloofness”, a direction to managers to revert to be more “engaged” will be the exact opposite of what should be done to drive Agility. Conversely, if managers are complaining that there is lack of clarity in their “vertical growth”, it may a good sign and call out the need to refine the roles and responsibilities of the management layer towards and incentivizing servant-leadership.

To re-iterate from the last article, the Climate is the effect and NOT the cause – so, it derives that each team now has to have its own understanding of the climate and work on what behavioural aspects to change. The teams themselves or the managers on their own may not be able to chart the next steps — Agile coaches must be engaged to help understand which pains are Agile friendly, and help the teams navigate them. Unfortunately, Agile Coaches are not considered part of the people leadership and kept away from understanding these aspects. HR leadership has the opportunity to influence this unfortunate status quo.

Another key aspect of the Organizational Climate is rewards and recognition. As organizations move to Agility, the move towards team goals, and collective ownership takes precedence over individual glory. Its important to appreciate this shift and use the Organizational Climate to gradually shift the organization to become more accommodating to losing “individual glory” and promoting “team success”.

In conclusion, the transformational journey to Self-Management using Agile as a framework is a long and arduous one. It requires enlightened leadership to guide the teams to the new Organizational Culture and partner with the HR organization that’s keeping a close watch on the Organizational Climate.

There are NO shortcuts, but with team work from ALL the leadership, the complexity can be handled step-by-step, iteration by iteration, quarter by quarter. Its a like grand orchestra and when there is alignment between the players and the conductor, you will hear the initial cacophony transform into a symphony that your organization will wonder how you ever lived without.

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.