kienbaum us change management study 2014/2015

Change Management Study 2014 / 2015

» Agility – Surviving Uncertain and Unpredictable Times in Business

Kienbaum Management Consultants

2 Thema

Published by Kienbaum Management Consultants GmbH.

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For reasons of legibility alone, this publication uses a generic masculine form to

refer to both genders.

3Contents

Preface 4

1. Executive Summary 6

2. The Study 7

3. The Findings 14

3.1TheBusinessEnvironment–DriversofAgility 16 3.2 Agility:SensitivityandResponsiveness 18 3.3 WhatEnablesAgility? 20 3.4Conclusions 25

4. Implications for Managerial Practice 26

Recommended Literature 29

Contact 30

» Contents

4 Preface

» Preface

DearReaders!

“Changemanagement”hasbecomeaubiquitousterminbusinesstheoryandpractice.Manyofthemuchvaunted concepts of change management, however, come with strings attached: They often followorganizationalandmanagerialconceptsthatassumeorganizationalchangetobefullypredictableandcontrollable,andtheyonlytoofrequentlyintroducechangeasatemporaryevent.Oncethetargetstatehas been achieved, the change phase is replaced by a phase of stability and “normality”, of stablestructures,procedures,andprocesses.

Businessesare increasinglyfacingacompletelydifferentreality:Comingoutofachangenowmeanssimplygoingintothenextchanges.Thisiscausingauniquestateofchangefatigueandayearningforthedeceptivestabilityandroutinesoftheoldendays–inessence,forastaticstate.Thisgoesnotonlyfor employees and line managers, but also for the very top executives. They often expect others tochange,butthemselvesfallpreytorelyingonoldexperiencesorpastachievements,continuingtoapplyfamiliarconcepts,patterns,ortheoldformulasofpastsuccess.Afrank lookshowshowtheytooarestrugglingwithadjustingtothenewstateofconstantchange.

Inatimecharacterizedbydiscontinuity,uncertainty,alackoftransparency,andunpredictability,com-paniesarefacinganewchallenge:Tobecomeagile–asapermanentrequirementforagileorganizationswithagilecultures,notasaone-off, temporaryproject.Agility isa fundamentalandnecessarycom-petenceforbusinessestryingtostaysuccessfulinuncertainandfast-changingenvironments.

Stabilityunderstoodcorrectlyorappropriateplanningandagilityarenotmutuallyexclusive.Butorgani-zational structures, processes, and management or leadership tools and systems are far different inenvironmentsthatdemandagilityfromthoseatcompanieswhocanrelyonstableorstaticenvironments,wheremarkets,customers,andcompetitorsbehaveintransparent,unchanging,andpredictableways.

Manymorecompaniesarenowfacingenvironmentsthat returningfrom“stable”, “static”,and“trans-parent” to “unstable”, “unpredictable”,and“opaque”. In response to this switch,Kienbaumhasaskedthemtowhatextenttheyconsideragilityanecessaryorganizationalcompetence.Atthesametime,thestudyexploreswhatenablescompaniestobeagile–andwhatdistinguishestheagilecompaniesfromtheirlessagilepeers.

Wehopethisstudywillofferyouasmanyinterestingnewinsightsandimpulsesasitgaveusandenableyou to make your organization, your management, and your leaders more agile – put more briefly:tomakeyoumoreagile!

WethankKaiTöpelforhisgreatsupportwithdesigning,conducting,andprocessingthestudy!

Yours,

Dr. Achim Mollbach Jens Bergstein

5Vorwort

6 ExecutiveSummary

Forthepurposesofthisstudy,aselectionoftier-1executives,executivesbelowthatlevel,andmanagersandemployeesincertain corporate functions (HR, controlling, IT etc.) weresurveyedaboutthestateofagilityintheirorganizations.

Initsfirstpart,thestudyinvestigatedwhatwasidentifiedas“agility drivers”andrevealedthatmostcompaniesarefaced,to different degrees, with environments and markets thatdemand agile behaviour. The majority of the participatingcompaniesisaffectedbyaconsiderablespikeintheintensity of competitionintheirmarkets.Atthesametime,theresultsshowthatcompaniesarenotregardedasagileastheyshouldbefromthepointofviewoftherespondents.Thetemptationto follow the old habits and formulaic responses from thepastseemstobetoostrong.Thereisageneralgapbetweentheneedforagilityattheparticipatingcompaniesandtheiractualagility.Manycompaniessimplylacktheabilitytore-cognizechangesinthemarketsormoregeneraltechnologicalorsocialshiftsandtorespondquicklyandflexiblytothesesignals.However,therearecleardifferencesintermsofhow

agilebusinessesare:Wecandistinguishwithsomecertaintybetweenmoreagileandlessagileorganizations.Onereasonforthisdistinctdifferenceintheiragilityliesinthedifferentcompetences,abilities,and infrastructuralmeanstheyhavetopromoteagility(enablers).Moreagilecompaniestendtoshow much more dominant “agility enablers”. By compa-rison, their less agile peers tend to look to the past whenmakingdecisionsortakingactioninthepresent.

Theresultsofthisstudyofferatellinginsightintohowcom-panies can be made more agile. However, this is not achallengeforanisolatedproject,asingleintervention,orahandpickedgroupofenablersalone.Whatisneededtopro-mote real agility is a permanent process covering andcapturingtheentireorganization,aprocessthateverybodycanandshouldcontributetoactively.Promotingagilitythere-forealsoneedsanewtypeofcooperationandcollaborationbetweendifferentfunctions,groups,andlevelsofhierarchyacrosstheorganization!

1. Executive Summary

7TheStudy

Pastorganizationaltheoryandmanagementconceptshaveoftenassumedthebusinessenvironmenttobeastableanddependable factor.Theseconcepts imply that future trendsand changes in the environment are easily predicted andanticipated in good time. For companies working in suchstableand transparentenvironments, the levers for successaretheplanningoftherighttargetsandactions,theproperregulationofactivitiesandresponsibilities,theestablishmentof standard processes and systems, and other operationalroutinesandhabits.Whentheenvironmentbecomesunstable

ordynamicandfuturetrendsandeventsbecomehardertopredict,theseleverslosemuchoftheirpracticalvalue.Infact,theymighthobbletheabilitiesoftheorganizationsrelyingonthem.Whatcompaniesinsuchenvironmentshavetodoistodevelopagilityasameta-competenceontopoftheirspecificskill sets and competences. With agility, they can staysuccessful in uncertain, unpredictable, and chaotic times.Organizational structures and leadership or managementsystemsneedtobescrutinizedtoseewhethertheypromoteorindeedpreventtheriseofagilityintheorganization.

2. The Study

WhatisAgility?

Illustration 1: The study explores the critical ability of organizations to recognize and adjust immediately to changes in their environments

Driver 1Intensecompetition

Driver 2Dynamicconditionsandenvironments

Driver 3Technologicalchange

Driver 4Changingcustomerpreferences

andhabits

External agility requirements affecting organizations (drivers)

Agility Enablers

Organizational Agility

Organization

Sensitivity Responsiveness

Byagility,werefertotheabilityofacompanyororganizati-ontoanticipatechangesandincidentsaroundthemquickly,without much notice, and with appropriate accuracy. Thissub-component of agility can be called sensitivity, and itisanecessarypreconditionforachievingtrueagility:Ifyoudo not notice anything or are too slow to do so, you can-notrespondappropriately.Thesecondfactorthatisneededtobecomeagile is responsiveness, i.e. theability tomoveandrespondquicklyandflexiblyinthemarketsinwhichthecompany or organization is operating. Not everybody whosees changes coming in due time is also able to respondquicklyenoughtothem.

Agility isnotjustthebasicabilityofcompaniestorecognizethe adverse forces and environmental risks they might be

facing and to respond quickly, flexibly, and effectively tothem. Rather, agility is needed in opaque or fast-changingenvironments when it comes to recognizing and seizingbusinessopportunities,potentialinthemarkets,orcompeti-tiveadvantages.

Wecanassumethatacompanyhastopossessmoreofthemeta-competence “agility” the more its relevant environ-mentischaracterizedbyinstabilityorfast-pacedandabruptchanges, that is, uncertainty and lasting unpredictability. Anot negligible number of companies, however, base theirorganizational models and management or leadership con-cepts and systems on the “old days” of stable and trans-parentbusinessenvironments.Inotherwords:Inatimewhentheorganizationalenvironmentisbecomingmoreandmore

8 DieStudie

dynamicanduncertain,manycompaniesrespondbyaddingmore planning, more regulation, more hierarchy, and moreandmorecomplexreportingandcontrollingprocesses.Thesecompanieswill face theagilitygap that can threaten theirveryexistence!

The key influences and environmental forces that causeaneed for companies todevelopmentand instil themeta-competence “agility” can be called the drivers of agility.Wecannamefourprimarydrivers:

»Highly intensive competition in the industry or relevantmarket.

» Extensive and fast-paced technological change in theindustryorrelevantmarket.

» Frequent and abrupt changes in customers’ preferences andhabitsintherelevantmarket.

» Constant and fast-paced changes to the environment and operating conditions of the business (e.g.suddenandunexpectedlegislativechangewithamajorimpactonthedevelopmentofthebusiness).

Agility as a meta-competence is the product of many dif-ferentfactorsorcompetencesinorganizations.Suchagility-inducing factors can be called enablers, that is, aspects,infrastructure, or specific abilities / organizational com-petencesofacompanyoritspeoplethatenabletheirorga-nizationtobeagile,that is,sensitiveandresponsivetothedynamic and often hazy world and markets around it. Thefollowingenablershavebeenidentifiedincurrentliteratureon the subject and were used as the basis for the surveyconductedbyus.

9TheStudy

Illustration 2: Enablers

Enablers

Top management and executives as the engines of change

»Ourtopexecutivesarerole-modelsforchangeventuresandgetthecommitmentoftheentireleadershipteam.

»Ourexecutivesshapethenecessarychangesproactivelyandwithpurpose.

Culture of learning and innovation »Ouremployeeshavethecapacities(timeandresources)forcontinuouslearningandtheimprovementoftheircompetencesandabilities.

»Timeandresourcesareinvestedintothedevelopmentofnewideas,eveniftheiraddedvalueisnotcertainattheoutset.

»Welearnfrommistakesandfailures.

Problem-solving and decision-making processes designed for flexibility, speed, and practical implementation

»Ourtopexecutivestakedecisionsimmediately.»Multiplesolutionsarepreparedbeforeproblemsarise(what-ifscenarios).»Decisionsareexecutedimmediatelyoncetheyaretaken.

Market and customer awareness in the overall organization and constant development of core competences

»Allareasofourorganizationarealignedwiththeneedsofourcustomers.»Strategydesignandmonitoringareimportantandpermanentprocesses.»Ourcorecompetencesarefosteredanddevelopedonaconstantbasis.»Weputalotofemphasisoncontinuousbranddevelopment.

Employee’s involvement in strategy and product development

»Theskillsandexpertiseoftheentireworkforceisusedtodevelopnovelandcompetitiveproductsandservices.

»Employeeswithdirectexperienceofthemarketsandcustomersareactivelyincludedinthestrategicdiscourse.

Culture of trust and empowerment »Thereisastrongcultureoftrust,withlotsoffreedomforautonomouspracticeandfreedecisions.

»Ourrulesandregulationsgiveemployeesandexecutivesenoughspacetorespondflexiblyandquicklytothespecificrequirementsintheirareas(empowerment).

»Ourexecutivesencourageouremployeestotakedecisionsandactautonomously.

Openness for change and innovation in the workforce

»Ouremployeesactivelysupportchanges.»Ouremployeesarereceptivefornewmethodsandideas.

Management structures and processes designed for flexibility and speed

»Ourmanagementsystems,processes,andrulesaredesignedtoenableandsupporttheimplementationofsudden,emergentchanges.

»Weputalotofemphasisonanopenhierarchyandshortchannelsofcommunicationandchainsofcommand.

Systematic and coherent HR processes

»WeuseHRprocessestosource,develop,assess,andrecompenseemployeesappropriately.

New technologies for internal and external communication and collaboration

»Newtechnologiesforcommunication(suchassocialmedia).»Newtechnologiesforcooperation(suchascloudcomputingandgroupware).

On top of these potential enablers of agility, literatureoften mentions certain key “non-enablers” or, out morebluntly, “agility preventers”. Individual people as well asgroupsandentireorganizationsoften tend to look topastsuccessesorexperiences toguide their currentactionsanddecisions.Theyactonabasisofhabitandroutine.Inmanage-

ment science, this phenomenon has been described as“path dependence”: Companies are caught on a path theycannot leave.Pathdependenceandroutineor thehabit tofollowpastexperienceandoldachievementsarevirtualanti-dotestoagility!

Thefirstpurposeofthisstudywastoexploretheextenttowhichcompaniesandorganizationshaveestablishedthem-selvesinagileenvironmentsandhaveformedthenecessaryDRIVERS in theirenvironments, followingstatementsmadebyrepresentativesofthesecompanies.

Asecondaimofthestudywastoascertainwhether–againfromthepointofviewoftheparticipants–companieshavelearnttoanticipatetherelevantdrivers(sensitivity)andhowfast and flexible they are in response to them (responsive-ness).While this concerns the “as-is” stateof agility at theparticipatingenterprises,anextstepwouldinquireintotheirtarget “to-be” state.A comparisonof these two states canoffer meaningful insights into the current gaps and dis-crepanciesandtellusmoreaboutthethreatsandrisksthat

companiesarefacinginthisarea.Thisisrelevantwhenevertheparticipantsconsidertheirtargetagilitytobemuchhigh-erthantheas-isstatetheircompanieshaveachievedtodate.Sucharesultwouldindicatethatthecompaniesinquestionarenotabletorecognizethechangesandunexpectedeventsaround them and within them or, at least, do so too late(sensitivity)anddonotrespondatalloragaintooslowlytothem(responsiveness).Thiswouldimplythatcompaniesaretakenbysurprisebyrisksoradverseeventsandopportunitiesalikeor that theymiss theirpresenceentirely.At the sametime,itwouldsuggestthattheyarenotfastorflexibleenoughtorespondappropriatelytosuchrisks,events,opportunities,or success potential around them – continuing with theirlong-established routines, standard programmes, or planslongovertakenbyreality.

Objectives

11Ergebnisse

Athirdpurposeofthesurveywastoinquireintotheenablersof the meta-competence “agility”. Current research hasproposedanumberofdifferentsetsofenablers,fromwhichaselectionofpossibleenablerswaschosenforuseinthestudy.Therespondentswereaskedtoassesswhethertheseenablersofagilityarepresentintheirorganizations(as-is)andtostatewhethertheyconsideritimportanttoestablishtheseorotherenablers (to-be). Again, the results allow an interestinginsightintodiscrepanciesbetweenthecurrentstateandthetarget,revealingpotentialthreatsforcompaniesworkinginagility-requiringenvironments.

Fourth, the study wanted to explore how agile companiesdifferfromtheir“not-agile”orlessagilecounterpartsintermsof these enablers. This difference could tell which possible

enablers indeed have an effect as “real” enablers, givingcompaniesinvaluableinsightsintotheenablerstheyshouldbeconcentratingoninordertodeveloptheagilitytheyneed.

12

Thesampleforthestudyincluded(1)executivesonthefirstmanagement tier, (2) executives and employees below thefirstmanagementtier,and(3)executivesandemployees insupportorcorporatefunctions.

Theparticipantsweregivenaquestionnairewith set itemsinanonlinesurveyandasked to rateeach itemona four-pointscale(1=doesnotapplyatall;2=tendstonotapply;3=tendstoapply;4=appliesinfull)intermsofhowwellthestatementappliestothesituationattheirorganization.

Theonlinesurveywasconductedinthefirstquarterof2014.*

A total of 204 executives and employees from companiesbasedintheGerman-speakingcountries(D-A-CH)tookpartinthesurvey.25%oftheparticipantsheldtopmanagementfunctions,whileanother40%heldexecutivefunctionsbelowthe first management tier. 35% of the participants wereexecutivesoremployeesincorporateorsupportfunctions.

MethodsandSample

TheStudy

Illustration 3: Participants by their functions

The respondents were recruited from companies of manydifferent sizes, ranging from multinational corporations tosmall and medium-sized enterprises. At 51%, participants

from SMEs represented the largest group. The respondentsalsorepresentawiderangeofindustries.

35%

25%

40%

Tier-1management

Managementotherthantier-1

Corporatefunctions

Illustration 4: Distribution of companies by headcount

Lessthan1,000employees

1,001to5,000employees

5,001to10,000employees

Morethan10,000employees

51%

19%

9%

21%

13TheStudy

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Illustration 6: Participating companies by sectors of industry

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Mechanicalengineering/Electricalengineering 7%

Energy/Utilities 7%

Pharmaceutical/LifeSciences/Chemical 6%

Retail 5%

Healthcare/Hospital/MedicalServices 5%

Transport/Logistics 4%

Media 4%

Consumergoods 3%

Automotive/Suppliers 2%

High-tech/IT/Software/Telecommunication 9%

Publicadministration 9%

Banks/Financialservices/Insurance 14%

Services 23%

Others 2%

Theresultsofthesurveyareintroducedinthischapter.Thefirstpartwill explore theextent towhich theparticipatingcompanies are based in environments or markets thatdemandagility(agilitydrivers).Thesecondpartwillconsiderhow the participants see themselves in terms of the dualtraitsofagility–sensitivityandresponsiveness(as-isstatus).Thiswillthenbecontrastedwiththeparticipants’responses

concernedtheto-bestatetheyareaimingfor.Inafinalstep,the results for the enablers of agility will be outlined andexploredwithaviewtohowmoreagileandlessagilecom-paniesdifferintermsoftheirenablers.

3. The Findings

15Ergebnisse

16 TheFindings

Thefirstpartofthesurveyaskedtheparticipantsabouttheextent towhich theirorganizationsareworking inenviron-ments thatdemandagility. Is theirenvironmentmarkedbyhighlyintensivecompetition,fast-pacedtechnologicalchange,unpredictable changes in general conditions, or quick andabruptchangesincustomers’preferences?

Theresultsindicatethatallcompaniestendtofaceenviron-ments that requireacertainamountofagility.The respon-dentsprimarily speakofhighly intensive competition:59%statethatahighlyintensiveindustryormarketappliesfullyintheircase,withanother25%statingthatthistendstoapply.Only16%wouldnotsaythatthisappliestosomedegreeoratall.Sinceintensecompetitionisoneoftheforcesbehinddynamicandunpredictablemarkets,wecanassumethatthisintensityisanimportantdriverforthedevelopmentofagilityatmostoftheparticipatingcompanies.

Socialandpolitical conditionsalso seem tobe in constantandfast-pacedfluxfortheparticipatingcompanies.40%oftheparticipantsansweredthatthisappliesinfulland43%thatittendstoapply.Only17%considertheirenvironmentstoberatherstaticoronlysubjecttoslowandlimitedchange.

Currenteconomictheoryandpopularmanagementpublica-tions frequentlyspeakof rapid technologicalevolution,butthistrenddoesnotseemtofigureasstronglyfortherespon-dents:Althoughmorethanhalfoftheparticipatingcompa-niesarefullyorpartiallysubjecttosuchchanges,afull39%oftheparticipantsstatethattheirindustryisnotatalloronlyhardly subject to extensive or fast-paced technologicalchange.Thissurprisingresultshould,however,beconsideredwithaneyeonthesectorsof industrytherespondentshailfrom:Manyparticipantscomefromservicecompaniesinthebanking/financeorinsuranceindustryorfrompublicinstitu-tions. When one compares the mean scores by sectors ofindustry,thehigh-tech/IT/software/telecommunicationsindustryshowsamuchhigherpresenceofthisdriver(at3.59)than thebanking/finance/ insurance industry (at2.66).This example shows that the drivers have a substantiallydifferenteffectdependingontheindustryinquestion,whichappliesinparticulartotheimpactoftechnologicalchange.

3.1 TheOrganizationalEnvironment–DriversofAgility

17TheFindings

Illustration 7: Aspects of the organizational environment (presence of agility drivers)

The results for the driver “frequent and abrupt changes incustomers’preferencesandhabits”arestriking:only17%oftheparticipantsstatethatthisappliesinfullintheircases.For 37%, it “tends to apply”. No fewer than 41% of theparticipantsstatethatthisdrivertendstonotapplyattheircompanies.Comparingthemeanresponsesforthedifferentindustriesalsoshowsonlylittlevariation.

Wecanthereforestate thatmostof theparticipatingcom-paniesare,onthewhole,affectedbyallofthedriversofthemeta-competence“agility”.However,weneedtodistinguish

bythedifferentdrivers.Aclearmajorityoftheparticipatingcompaniesareworkinginmarketscharacterizedbyintensivecompetition.Constantandfast-pacedchangeintheirsocialandpoliticalenvironmentsisalsothenormforamajorityoftherespondents.Bycontrast,onlyabouthalfofallcompaniessee themselves exposed to strong technological change orfrequent and abrupt changes in customers’ preferences.Despitethis,wecanassumethatmostcompaniesareforcedbytheirenvironmentstodevelopandestablishagilityintheirorganizations.

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18 TheFindings

Hopes and Realities: The Agility Gap

Companiescanhaveafinelytunedsensethatcapturestheminute currents of change in their environment. This com-ponentofagilityisreferredtoastheirsensitivity,anditre-presentsapreconditionforthesecondcomponentofagility,i.e. responsiveness.Anorganization thatneeds too long torecognize changes or only picks up on the big and loudsignals (or indeed an organization that closes its eyes andearscompletelytochange)cannothopetorespondquicklyorflexiblytoit.Atthesametime,sensitivitytochanges,trends,andtheeventstheybringaboutdoesnotautomaticallyimplythe ability to respond to these. Despite all sensitivity, thechainsofcommandmightbetoolongoroperatetooslowly,or events are responded towith old andunfitting routinesandcustoms.Companiesmightalsoseetheeventsgoingon,butdecideto“sitthemout”.Allofthismakesresponsivenessasecond,independentelementofagility.

Inafirst step, the studyasked theparticipants to rate theas-is stateof theirorganizations in termsof sensitivityandresponsiveness,followedbyanassessmentofwhattheto-bestateshouldbewhenitcomestorecognizingorrespondingtothevariousdrivers.Theresultsshowsimilaras-isscoresforbothsensitivityandresponsiveness.Itisevidentthatthepar-ticipantsdonotseetheircompaniesasbeingassensitiveandresponsiveastheyshouldbeinviewofthedriversofagility.

3.2 Agiltiy:SensitivityandResponsiveness

Illustration 8: How sensitive is your company today when the following four drivers are concerned, and how sensitive should it be (in percent)?

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Illustration 9: How responsive is your company today when the following four drivers are concerned, and how responsive should it be (in percent)?

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19TheFindings

Thisappliesinparticularforthedriver“frequentandabruptchanges in customers’ preferences and habits”. The cleardiscrepancies relate less to a low as-is score for the otherdrivers,butrathertothespecificexpectationsexpressedbytherespondentsthattheircompaniesshouldbesensitivetothesuddenchangesinthecustomers’habitsandpreferencesby e.g. taking themonboardas soonaspossible. Further-more,thisrelatestothestronglyexpressedexpectationthatthecompaniesshouldbequickandflexibleintheirresponsestothedevelopmentsandchangesincustomers’preferencesandhabits.Theseresultsarestrikinginsofarastheresponsesof the participants had shown that their companies areactuallylessaffectedbythisdriverthanbye.g.theintensityofthecompetition.Thiscanbeexplainedbythesimplefactthatthecustomerrepresentsthecentralengineofsuccessforanycompany.However,this“primacyofthecustomer”isnotyet reflected in the actions of companies, as seen by therespondents,as there remainsaclearas-is/ to-begap for

boththeirsensitivityandtheirresponsivenesstocustomers’preferencesandhabits.Companiesthereforetendtofacethechallengeofhavingtoreinforcetheiragilityfor“frequentandabrupt changes in customers’ preferencesandhabits”byaconsiderabledegree.

Theotherdriversalsoshowbasicneedforimprovement.Oneinfourrespondentsstatethattheircompaniesarenotatalloronlyhardlysensitivetochangesintheirsocialorpoliticalsurroundings, and 30% believe that they do not respondquickly or flexibly enough to these trends. This createssubstantialrisksforthecompanies.

Wecanstate thatmostcompanieswillhave todevelopor,indeed, acquire the meta-competence “agility” in the firstplace.Thatmeans:theyhavetolearntorecognizetrendsandchanges much sooner and much more accurately and re-spondmuchmoreflexiblytothemthantheyaredoingtoday.

20 TheFindings

Reality and ExpectationsForacompanytobecomeagile,itneedstopossesscertainpersonal and organizational competences, infrastructuralcapabilities, or traits that enable agility. The respondentswerethereforeaskedtoratethepresenceoftheseenablersofagility intheircompanies.Theas-is rankingshowsthatthemeanscoreforallenablersliesbelow3,whichisalsoduetoasubstantialvarianceinthescoresawardedforeachenablerin the different participating companies. Seen wacross allcompanies,themeanas-isscoresfortheenablersrangefrom2.7(“Weputalotofemphasisoncontinuousbranddevelop-ment”) to 2.09 (“We have multiple solutions for problems(what-if scenarios)”). A marked gap to the most strongly

developedenablersarealsofoundfor“Newtechnologiesforcooperation(“groupware”)”(M=2.20)and“Theexpertiseoftheworkforceisusedtodevelopnovelproducts”(M=2.36).The bottom third of the ranking also includes the items“Our top executives are role-models for change ventures”(M = 2.42) and “Management structures and processesdesignedforflexibilityandspeed”(M=2.43).

3.3 WhatEnablesAgilityinBusiness(Enablers)

Ouremployeeshavethecapacitiesforcontinuouslearningandimprovement

Timeandresourcesareinvestedintothedevelopmentofnewideas

Openhierarchy

SystematicandcoherentHRprocesses

0 0.5 1 1.5 2 2.5 3 3.5 4

Strategydesignandmonitoringareimportantandpermanentprocesses

Thereisastrongcultureoftrust,withlotsoffreedom

Ourtopexecutivestakedecisionsimmediately

Ourrulesandregulationsgiveemployeesandexecutivesenoughspacetorespondflexibly

Allareasofourorganizationarealignedwiththeneedsofourcustomers

Ourcorecompetencesarefosteredanddevelopedonaconstantbasis

Ourexecutivesencourageouremployeestotakedecisionsandactautonomously

Ouremployeesarereceptivefornewmethodsandideas

Weputalotofemphasisoncontinuousbranddevelopment

Ourexecutivesshapethenecessarychangesproactivelyandwithpurpose

Employeeswithexperienceofthemarketsareincludedinthestrategicdiscourse

Ouremployeesactivelysupportchanges

Decisionsareexecutedimmediately

Wedrawlastinglessonsfrompastmistakes

Managementstructuresandprocessesdesignedforflexibilityandspeed

Newtechnologiesforcommunication(socialmedia)

Ourtopexecutivesarerole-modelsforchangeventures

Theexpertiseoftheworkforceisusedtodevelopnovelproducts

Newtechnologiesforcooperation(“groupware”)

Wehavemultiplesolutionsforproblems(what-ifscenarios)

Illustration 10: As-is state of the enablers at the participating organizations

As-Is

To-Be

21TheFindings

Evenquitelowas-isscoresdonotimmediatelyimplyanythingaboutnecessarychanges.Thesecanonlybeidentifiedinacomparisonwiththetargetto-bestate.Forthisreason,therespondentswereaskedtoratetheenablersthatshouldbeimplemented at their organizations. The results (ranking ofmeananswers)aretruetoexpectationinshowinggenerallymuchhigherscoresthantheas-issurvey.Thisimpliesthattherespondentscanseeabasicdiscrepancyforeveryenablerinquestion.However,theparticipantsalsodonotallotsimilarimportance to all to-be targets, even though the score areverynear toeachother in the top two thirdsof the items.

Thehighestmeanscoreisawardedtotheenabler“Wedrawlastinglessonsfrompastmistakes”(M=3.66), followedby“Allareasofourorganizationarealignedwiththeneedsofour customers” (M = 3.58). The lowest mean scores in theto-be ranking canbe found for the enablers “New techno-logies for communication (social media)” (M = 3.05) and“Newtechnologiesforcooperation(“groupware”)”(M=2.97).


Openhierarchy

SystematicandcoherentHRprocesses


0 0.5 1 1.5 2 2.5 3 3.5 4










Strategydesignandmonitoringareimportantandpermanentprocesses

Theexpertiseoftheworkforceisusedtodevelopnovelproducts


EmployeeswithexperienceofthemarketsareincludedinthestrategicdiscourseOurrulesandregulationsgiveemployeesandexecutives

enoughspacetorespondflexiblyManagementstructuresandprocessesdesignedforflexibilityandspeed

Wehavemultiplesolutionsforproblems(what-ifscenarios)

Weputalotofemphasisoncontinuousbranddevelopment

Timeandresourcesareinvestedintothedevelopmentofnewideas


Newtechnologiesforcooperation(“groupware”)

Illustration 11: To-be state of the enablers at the participating companies

As-Is

To-Be

22 TheFindings

Relating the enablers’ as-is scores with the responses con-cerningtheintendedorwishedfortargetstates,werecognizeclear discrepancies between the as-is and to-be states forcertainenablers.Theseinclude“Wedrawlastinglessonsfrompast mistakes”, “We have multiple solutions for problems(what-if scenarios)”, “Our topexecutivesare role-models forchangeventures”,and“Theexpertiseoftheworkforceisusedto develop novel products”. For these enablers with stronggapsbetweentheas-isandto-bestates,wecanseedefiniteroom for improvement at the participating companies. Theresponses suggest e.g. that companies should learn morefrommistakesthantheyareusedtodoingatthispoint.

Ifoneconsidersonlythegapsfortheelevenhighest-rankedenablers(to-be),thatis,onlytheenablersappreciatedmostby the respondents (mean scores from 3.66 to 3.50), thepicture is similar. The participants find it particularly im-portantthattheircompanieslearnfrompastmistakes,thattheirtopexecutivesactasrole-modelsforchange,andthatdecisionsareexecutedimmediately.Itisjusttheseenablersthatpresentthemostobviousgapbetweenthecurrentstateandtheexpectationsoftheparticipants.

Fromaperspectiveofagility, thefindings for the“negativeenabler” areparticularly alarming: It becomesobvious thattheparticipantsseetheircompaniesasbasicallymorerelianton past examples for their decisions than they should be.

Thisimpliesthatcompaniesneedtodetachthemselvesfromtheiringrainedroutinesandoldpathsinordertoachieverealagility.Aparticularly interestingfeature:Theas-isscoreforthisnegativeenablerishigherthantheto-bescore.

Illustration 12: As-Is / To-Be gap for the 11 enablers with the highest to-be scores (ranking from scores of 3.66 to 3.50)

0 0.2 0.4 0.6 0.81.01.2 1.4


Openhierarchy










Illustration 13: The Negative Enabler – “Decisions tend to follow past examples”

-1 -0.5 0 0.5 11.52 2.5 3 3.5

Gap

As-Is

To-Be

23TheFindings

The Leadership and Management Enablers Ranked by the Respondents’ Functions

Whenoneconsiderstheas-isstateoftheenablersrelatingtoaspects of management and leadership in terms of thefunctionsheldbytherespondents(topexecutives,executivesandemployeesbelowthetopmanagementlevel,employeesin support or corporate functions),we can see somemajordifferencesintheresponses.Lookingatthedifferencesintheresponses from top executives and non-top-executives, thediscrepancies are eye-catching in the cases of “Our topexecutives take decisions immediately”, “Decisions are exe-

cutedimmediately”,and“Ourtopexecutivesarerole-modelsfor change ventures” as well as “Open hierarchy”. The topexecutivesratetheirperformanceintermsoftheseenablersmuchmorepositively than the respondents from theothertwogroups.Thisdoesnotcomeasasurprise:TheKienbaumChangeStudyof2011/2012alreadyrevealedthattopexe-cutives tend to have a generally more “positive” imageof their roleand theirbehaviour thanothergroups in theirorganizations.

Differences between More Agile and Less Agile Companies

Do more agile and less agile organization differ in thecurrentpresenceoftheseenablers?Adifferencewouldoffermeaningful proof which enablers actually help make com-panies agile in their environments. With this in mind, theparticipatingcompaniesweregroupedas“lessagile”or“moreagile”organizationsdependingon their agility scores (as-isvalues:DriverxSensitivity/Responsiveness).

Comparingthemeanscoresfortheenablersinbothgroups,one can see marked differences that are significant for allenablers. We can generally say that more agile companiesindeedshowmuchmorepronouncedenablersthantheirlessagilecounterparts.

1,5

1,7

1.9

2.1

2.3

2.5

2.7

2.9

3.1

3.3

Ourtop

exec

utive

stak

e

decis

ionsi

mmediat

ely

Decisi

onsa

reex

ecute

d

immed

iately

Ourtop

exec

utive

sare

role-

models

forc

hang

even

tures

Openh

ierarc

hy

Ourex

ecuti

vess

hape

the

nece

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chan

gesp

ro-

activ

elyan

dwith

purpo

se

Illustration 14: Enablers that concern leadership quality are rated significantly differently by different respondent groups

Tier-1management

Managementotherthantier-1

Corporatefunctions

24 TheFindings

Thescalepresentsthedifferenceintheas-isscorebetweenmoreagileandlessagileorganizations.Thehigherthescore,themoredevelopedtheenablerisinamoreagileorganiza-tionthanalessagileorganization.

Themostobviousdiscrepancycanbefoundintheenablers“New technologies for communication (socialmedia)“, “Ourtop executives take decisions immediately”, “Managementstructuresandprocessesdesignedforflexibilityandspeed”,“Ourtopexecutivesarerole-modelsforchangeventures“,and“Decisions are executed immediately”. Interestingly, the

differencesbetweenmoreagileandlessagilecompaniesforthe enablers “Strategy design and monitoring”, “Capacitiesforlearningandimprovement”,and“Ourexecutivesencourageouremployeestotakedecisionsandactautonomously”arealso significant, butnot as stronglypronouncedas the en-ablersnamedabove.

A clear difference can be identified when considering the“negativeenabler”.Itsuggeststhatlessagilecompaniestendto lookmuchmore to thepast for inspirationwhen takingdecisionsthantheirmoreagilepeersdo.

Illustration 15: Agile companies among the participants benefit from a markedly stronger presence of selected enablers

-0.5 -0.4 -0.3 -0.2 -0.100.1 0.2 0.3 0.40.50.6 0.7 0.8 0.9

Decisionstendtofollowpastexamples*



Managementstructuresandprocessesdesignedforflexibilityandspeed



Openhierarchy





*Negativeenabler(decreasingagility)

0.83

0.77

0.6

0.59

0.59

0.58

0.58

0.57

0.55

0.54

-0.47

25TheFindings

The study’sfindingsmake it clear thatagilityhasattainedmajor importance as a meta-competence of crucial signi-ficanceforthesuccessoftheparticipatingcompanies.Therearesignificantgapsbetweenthecurrentpresenceoftherele-vantdriversandenablersandthestatethattherespondentsaspire to. At the same time, the study delivers invaluableideasforimprovingthestateofagility.Comparingagileandlessagilecompaniesshowswhichenablersofferarealreturninthepursuitofmoreagility.Theseenablersshouldbeestab-lishedanddevelopedintheactivemanagementandopera-tionalroutines.

Wehopethatthisstudyhascontributedtomakingtheques-tion of agility more tangible with a set of clearly defined

3.4 Conclusions

enablersandthuscreatedakindoflanguagethathelpscom-paniesspeakaboutagility.Foratrulyeffectiveimprovementof companies’ change agility needs two things more thananything else: New concepts that allow the companies toperceive the reality around them in new ways, and a suf-ficientlyconcreteandpragmaticwaytointroducenewpracticesinthoughts,actions,anddecisions.

Forus,itremainstobesaidthattheentiretopicofagilitywillonly gain in importance for the foreseeable future. Thismakesitevenmoreimportantforcompanieseverywheretoslowly intensify their awareness and involvement with theissueandtoestablishasharednotionofagilityasthecom-mongroundonwhichtogettowork.

TheresultsoftheKienbaumChangeStudy2014/2015havepinpointed a number of aspects that are of crucial impor-tanceformanagerialpracticeinitspursuitofagilityintheirorganizations.Wecangenerallystatethatitisnotenoughtoimplementoneortwoenablersinisolationandexpecttheseto increase organizational agility. Allocating responsibilityforselectedenablersoractionstoindividualdepartmentsorareaswillalsohavenomeaningfuleffectonoverallagility.Instead,companiesneedanentiresetofenablers,rolledoutacrosstheirentireorganizations.Increasingagilityisnoiso-lated,specialistjobofHRprofessionals,marketing,orsales,but a general organizational commitment that involves allrelevantfunctionsandareasoftheorganization.Promotingagilitywillthereforenotbe“doneanddusted”withaone-offintervention,asingleworkshop,oranisolatedproject.Itisapermanentchallengeformanagersandemployeesalike:Thedangerofgettingtrappedagaininoldroutines,habits,andpath dependencies is too great for everybody. And that

includes top managers who are often only too quick todemand agility and change from others and not see thecontributionstheythemselveshavetomake!

The following table outlines a selection of ways in whichcompany’smanagerscanpromote thegrowthofagility forthe various levers identified here. As said above: The realchallengeisnottherealizationoftheindividualenablers,buttheinitiationofacomprehensiveevolutionarychangeintheorganization and the activation of the key levers for thepurpose.

4. Implications for Managerial Practice

27ImplicationsforManagerialPractice

Identified targets for action

Pragmatic suggestions

Significant discrepancies betweenexpectationsandrealityforallenablers

» Strengthenagilityandtheabilitytochangewithadedicatedorganizationalunit,e.g.CoEChangeorOrganizationalEffectivenessinHRorinOrganizationalDevelopment

»Developasharednotionoftherelevantagilityleversforthecompanyandaholisticagilityconceptforallfunctionsandareasofthebusiness

»Establishachangetoolboxalignedwiththeconceptofagilitytoapplyagilityintoolsandagileprojectmethods

»Permanentreviewoftheimplementationoftheagilityconcept

Strengthening the outside-in perspective

»Monitortrendssystematicallyandpermanentlytoanalyseandassesschangesinthemarketsandgeneralenvironment,withthecontributionofallareas,butprimarilytheareasworkinginclosestproximitytothemarket

»Regularinformationformanagersandemployeesaboutdevelopmentsandrelevantincidentsinthemarketsandbusinessenvironment

»Regulardialoguewithcustomersandknowledgeholdersinthebusinessenvironment,trendscoutsetc.,e.g.intheformofathinktank

»Establishstrategydevelopmentandmonitoringasapermanentcorporateprocess:Usetheexpertiseandexperienceofareasandemployeesworkingincloseproximitytothemarkets

IT for communication (social media)

»Usesocialmediapurposefullywithrelevanttools/apps,manageitsintroductionanduseeffectively

»Harmonizetheformalorganization(structure,processes,controllingsystems)withtheprinciplesofsocialmedia(networked,lateralcooperation)

»Ensuretrulyrelevantvirtualinteractionswithproperfacilitation,follow-ups,andthevisibleuseoftheresultsfortheintendedandannouncedpurpose(experienceshows:Usingsocialmediaisnotanendinitself)

Top management taking immediate decisions

» Introduceefficientandeffectivegovernancestructureswithmeaningfuloperation,information,anddecision-makingroutines

»Distinguishbetweencommitteesworkingonconceptualquestionsandcommitteesforstrategicdebatesordecisions

»Limittopmanagementdecisionstoaspectsthatcouldnotbehandledbyotherareasorfunctions

»Topmanagersshouldtrusttheexpertiseandcompetencefordecisionsonthelowerlevelsoftheorganization

Systems and processes aimed not at promoting stability, but encouraging agility

»Checkallleadershipandcontrollingsystemsintheorganization(performanceandresourceplanningandcontrolling,remunerationetc.)fortheirimpactoneitherpathdependency/rigidityoragility

»Establishafeed-forwardsystemtoaddtofeedback-drivencontrolling»Alignthetargetsandremunerationsystemwiththeaimofagility;e.g.establishmore

relativeandabstractthanabsoluteorconcretetargets;allowplanstobechanged;nolinkofvariableremunerationwithabsolute,concrete,orrigidtargets

»Definetargetsingroupstoinvolvemultiplelevelsandareas,insteadofcascadingdownindividualtargetsandagreements

»Checktheintensityofregulationattheorganization:daretobea“newbroom”

28 ImplicationsforManagerialPractice

Identified targets for action

Pragmatic suggestions

Top management acting as role-models for change ventures

»Definetherolesandresponsibilitiesofallmanagementlevelsbeforethechangeprocess»Topmanagementshouldactassponsorsofchangefortheentirechangeprocess»Topmanagersshouldreviewtheirownpatternsofbehaviour,routines,andhabitsand

introducetheirownlearningprocesses

Decisions being executed immediately

»Defineclearresponsibilitiesandsufficientresources(timeandpersonnel)»Regularandmandatoryactivitymonitoringandcontrolling»Regularreviewworkshopswiththemanagers/usersforfeedback,improvements,

andlessonslearned»Penalizemistakesandomissions

Open hierarchies »Delegateresponsibility“downwards”;asmuchauthorityforactionsanddecisionstobeplacedintheoperationalunitsaspossible

»Establishatwo-waycultureofcommunicationtoreplacepuretop-downcommunication»Promotehorizontalcoordinationbetweentheareas

Employees actively supporting change

»Clearlydefinetheinvolvementofemployeesinchangeefforts»Empoweremployeesforchanges(e.g.withHRdevelopment)

Employees being receptive for new ideas and methods

»Createtrustinchangeandtransformationprojectsbymakingtheprocesstransparent,followinguponannouncements,andallowingthepromisedparticipation

»Conductworkshopsthatencourageemployeestodevelopandshareideas»Createacultureoflearningandexperimenting»Allowjobrotationand“temporary”jobstatus

Core competences being fostered and developed on a constant basis

» Systematicskillsmanagementshouldbeintroducedtogettransparencyaboutthecompetencesavailableintheorganization(acrossthehierarchy)

»Corecompetencesforstrategyimplementationshouldbedefinedregularlyandincludedinstrategiccompetencemanagement(workforceplanning,HRdevelopment,recruiting)

»Aninfrastructureshouldbeintroducedthatpromotesthecorecompetences

Decisions following past examples

» Theroutines,habits,andunquestionedbeliefsshouldbechallengedregularlyonalllevels(includingtopmanagement!)

»Introducea“debatingculture”,evenacrosshierarchicalboundaries»Oppositionandcriticismshouldbepraised,notpenalized»Moreattentionshouldgotothediscontinuities,notthecontinuitiesintheenvironment.»Externalactorsand“unbiasedoutsiders”(fromwithinoroutsideoftheorganization)should

offercriticismandencouragenewperspectivesinexecutiveworkshops(devil’sadvocates)»Regular“creativefutureworkshops”»Paradoxandambiguitymanagementshouldbeincludedinexecutivedevelopment

29RecommendedLiterature

Birkinshaw,J.&Gibson,C.(2004).BuildingAmbidexterityIntoanOrganization.In:MITSLOANMANAGEMENTREVIEW(summer2004),47–55.

Grant,RobertM.(2003).Strategicplanninginaturbulentenvironment.In:StrategicManagementJournal,24:491–517.

Hassan,Zaid(2014).TheSocialLabsRevolution:ANewApproachtoSolvingOurMostComplexChallenges.SanFrancisco:Berrett-Koehler.

Jafarnejad,A.&Shahaie,B.(2008).EvauatingandImprovingOrganizationalAgility.In:DelhiBusinessReview,9(1),1–18.

Raisch,S.&Birkinshaw,J.(2008).OrganizationalAmbidexterity:Antecedents,OutcomesandModerators.In:JournalofManagement,34(3),375–409.

Reichwald,R.;Siebert,J.&Möslein,K.(2004).LeadershipExcellence:FührungssystemeaufdemPrüfstand.In:Personalführung,3/2004,50–56.

Schreyögg,G.(2013).InderSackgasse.OrganisationalePfadabhängigkeitundihreFolgen.In:Organisationsentwicklung,Nr.1,21–28.

Syett,M.&Devine,M.(2012).ManagingUncertainty.Strategiesforsurvivingandthrivinginturbulenttimes.TheEconomist/ProfileBooks.

Yaghoubi,N.&Dahmardeh,M.(2010).Analyticalapproachtoeffectivefactorsonorganizationalagility.In:JournalofBasicandAppliedResearch,1(1),76–87.

» Recommended Literature

30 Contact

Kienbaum Management Consultants GmbHHafenspitzeSpeditionstraße2140221DusseldorfGermany

» Contact

Dr. Achim MollbachPrincipalKienbaumManagementConsultants,DusseldorfPhone:+492119659-257Fax: [email protected]

Jens BergsteinPrincipalKienbaumManagementConsultants,BerlinPhone:+4930880198-71Fax: [email protected]

www.kienbaum.de

32 Thema

Kienbaum Management Consultants