The design is fixed, programing is under way, and the master database has yet to be connected. A look at the backlog on the task board shows the team at a glance how far their joint project has progressed. Six colleagues are developing a customer portal and compare notes daily at precisely half past nine. What have I dealt with since the last meeting that takes us closer to the sprint target? Which obstacles do I see? What do I want to have done by tomorrow? Each team member answers these three questions at this daily stand-up, which is both casual and at the same time highly focused. The team spends exactly 15 minutes on it, with its scrum master as the moderator, and then they all go about their jobs – independently, without instructions, and free from hierarchy. And after each sprint, as the 14-day project phase is called, the team presents its results to the specialist department and the management and has to face the feedback.
Short cycles and flexible adjustment
Scrum master? Task board? Backlog? Daily stand-up? Sprint? What may sound like the latest round of short-lived fashionable terms are concepts used in and around Scrum, an agile working management method that many firms now use. Using Scrum, projects can be managed along agile lines – just like they can be by using related techniques such as Kanban or Design Thinking. They all have their origins in information technology and are essentially based on the same principle: that of achieving as specific results as possible in short intervals with a self-organizing, hierarchy-free, interdisciplinary team in close collaboration with the customer – and of only considering them to have been achieved once they have been tested successfully.
“In the age of digitization many companies must develop and manufacture products in ever shorter cycles,” says Tobias Kämpf, a sociologist at the Institute for Sociological Research (ISF) in Munich. “That is more or less impossible by means of bureaucratic structures, rigid processes, and closely-knit hierarchies. That is why the business world increasingly relies on agile approaches” (see interview for more).
Achieving success by means of agile working
The results of a recent survey of over 250 European CEOs by the management consulting company Goetzpartners reveal why. Flexibly organized companies are in terms of overall profitability nearly three times as successful as their less flexible competitors. Similar findings were reported in a study of 1,100 executives from ten industries in more than 40 countries by the management consulting company BCG. It found that over 40 percent of agile enterprises report above-average results and only 24 percent fare worse than the industry average. By comparison, over half of the respondents whose companies are run along more rigid lines reported below-average results and only 18 percent of these traditionally managed firms are more economically successful than the competition.
40 percent of all companies with agile structures record above-average results.
Agile working turns the principles of classical project management upside down. Using conventional project management, the classical waterfall model, the target is set irrevocably from the start and all measures and solutions required are planned in detail, but the budget and project completion date can only be estimated. Using agile project management, the cost and completion date are fixed, but the target can, if necessary, change over the course of the project. As a consequence, in classically organized projects the development phase can take up to two years – two years until the applications and processes developed during this period can be tested. The danger is that it is not clear until this late stage whether the results are heading in the desired direction. Projects managed along agile lines, in contrast, stay lean and can take customers’ wishes and market changes into account at any time – even in late project phases. They are largely spared unwelcome surprises.
A better working atmosphere
Take Mybestbrands, for example. With support from management consultants at Improuv, the Munich-based fashion portal founded in 2008 has used the agile method Kanban for more than two years and much has changed since then. Departmental borders have vanished, data and processes have become significantly more transparent, and the working atmosphere in the team has improved just as noticeably as the sharing of knowledge with colleagues.
Examples like this demonstrate that Scrum & Co are catching on in nearly all industries. “We are seeing agile methods increasingly put to successful use in areas other than IT software development,” says Ayelt Komus, Professor of Organization and Business Informatics at Koblenz University. He asked more than 1,000 international project participants whether and with what success they use agile methods. He found that 20 percent of corporate respondents were already using only agile methods in project implementation and planning and development processes, while 68 percent were using them at least partly or in combination with other methods. Only 12 percent of respondents dispensed with agile methods entirely; in a comparable 2012 study it was still 22 percent.
If Scrum & Co are to prevail, companies must also embed agile principles in their organization and leadership models, in resource planning or in performance management. As hierarchy plays no part in agile teams, closely coordinated, open and at the same time autonomous cooperation is of elementary importance. Self-organization is the keyword. All colleagues choose their own tasks, take them forward independently and stand for their results. Continuous, reciprocal feedback is obligatory.
If these conditions are fulfilled, the employees will also benefit from agile approaches leading to a continuous process of improvement that can be highly motivating for the individual.
Interview: Four questions to Tobias Kämpf, a sociologist at the ISF in Munich who is engaged in research on digitization and the future of work.
Mr. Kämpf, many companies see agile methods as the answer to change brought about by digitization. Is that justified?
Much is still uncertain about the digitization of the world of work. What is clear, however, is that agile methods have made triumphant progress in recent years, at least in software development. This strategic trend is changing work fundamentally. It makes the organization of work more flexible, with employees working more autonomously in self-organizing teams. But that only works if agile methods are more than just part of a strategy paper. They offer many opportunities but they do not work automatically and must be shaped sustainably.
Where do you see difficulties with implementing them?
In my experience companies are initially enthusiastic when they hear about all the methods and techniques. But many find it hard to get used to the idea that employees themselves are to determine how they develop and, above all, how much they get done in a specific period. Yet that is precisely what matters: to avoid the bottlenecks that are typical of hierarchical structures. The crucial issue is that self-determination must really be experienced and that companies must enable their employees to make genuine use of these new freedoms.
So which projects are not suitable for agile methods?
Scrum methods and other agile techniques have their origins in software development and were long restricted to this area. Over the course of our research, however, we have noticed that these methods are increasingly making headway in in the development departments of hardware and classical industries such as electrical and automotive. Every company must sound out the areas in which they can be put to meaningful use for itself.
Can companies still collaborate if one is organized according to classical and the other according to agile principles?
In practice, collaboration between departments that are already run along agile lines and departments that are still run along classical lines is often a tightrope walk within one company. The challenge is no less great when companies that still largely live in hierarchical structures come up against an agile environment or vice-versa. What is clear is that many corporate customers now expect their service providers to be proficient at agile working and are thus able to offer short delivery cycles instead of requirement specifications defined in advance.