Agile working: mastering the chal­lenges of the digital world

Agile working is enjoying in­creas­ing pop­u­lar­i­ty in companies’ or­ga­ni­za­tion­al culture. Within just a few years, it has become a key issue in main­stream man­age­ment and is con­sid­ered the best method for companies to suc­cess­ful­ly face the chal­lenges of dig­i­tal­iza­tion. But what are the actual prin­ci­ples of agile working? Is every­thing as rosy as it seems, or do managers also need to factor in risks and dis­ad­van­tages? We provide an overview of how agile working emerged, how it works, and what prospects it offers companies.

The term “agility” comes from the Latin agilis, which can be trans­lat­ed as “dynamic, swift, and fervent.” In general lin­guis­tic use, agility now means the ability to adjust to changes flexibly, quickly, and proac­tive­ly.

Agility in a work context is defined less clearly. The term has been used by the sci­en­tif­ic community since the 1950s, but with various meanings. For instance, Talcott described the AGIL paradigm (adaptation, goal at­tain­ment, inte­gra­tion, latency) for social, self-pre­serv­ing systems.

According to the 2017 report by the SD Learning Con­sor­tium in New York, agility in a business context is based on four key char­ac­ter­is­tics: de­light­ing customers, descaling work, en­ter­prise-wide agility, and nurturing an agile culture.

The Agile Business Con­sor­tium offers a similar de­f­i­n­i­tion. Here, agility is the “ability of an or­ga­ni­za­tion to adapt quickly to market changes, in­ter­nal­ly and ex­ter­nal­ly; respond rapidly and flexibly to customer demands; adapt and lead change in a pro­duc­tive and cost-effective way without com­pro­mis­ing quality; [and] con­tin­u­ous­ly be at a com­pet­i­tive advantage.”

Agile working typically involves small in­ter­dis­ci­pli­nary teams, short feedback loops, an iterative approach, as well as in­cre­men­tal im­prove­ments and flat hi­er­ar­chies.

The Agile Manifesto rep­re­sent­ed a milestone in the spread of agile working. It comes from software de­vel­op­ment, however, the four prin­ci­ples presented can also be applied to agile working in other in­dus­tries:

1. In­di­vid­u­als and in­ter­ac­tions are more important than processes and tools
2. Func­tion­al software is more important than com­pre­hen­sive doc­u­men­ta­tion
3. Col­lab­o­ra­tion with the customer is more important that contract ne­go­ti­a­tions
4. Re­spond­ing to change is more important than following a plan

The agile approach first emerged in software de­vel­op­ment and IT project man­age­ment. Its earliest ap­pli­ca­tion can be traced back to the early 1990s. With the pub­li­ca­tion of the Agile Manifesto in 2001, the prin­ci­ples first became popular in IT de­part­ments and in project man­age­ment – areas in which frequent and quick changes have always been part of day-to-day business.

In the meantime, dig­i­tal­iza­tion has arrived in every industry and every business area: As a result of con­tin­u­ous change, agile methods and prin­ci­ples could be applied and adjusted every­where. Since the 2000s, agile working has es­tab­lished itself in­creas­ing­ly as a new standard in man­age­ment and or­ga­ni­za­tion­al culture.

Companies that wish to organize their work according to agile prin­ci­ples have a choice between various methods. The most well-known frame­works are Scrum and Kanban.

With Kanban, the focus is on vi­su­al­iz­ing the workflow. The aim is to create an even, free-flowing process to ef­fi­cient­ly bring projects to a suc­cess­ful con­clu­sion. Tasks are thereby limited and vi­su­al­ized on a board rep­re­sent­ing the project sequence. The method can be used by both teams and in­di­vid­u­als to structure projects of any size.

Scrum is a more com­pre­hen­sive method that works with defined roles and short work sprints. Rather than an even workflow, Scrum aims to deliver creative products in in­cre­ments and con­tin­u­ous­ly improve results.

In practice, the methods are often adjusted to the given cir­cum­stances, combined or sim­pli­fied to achieve the goals of agile working.

Agile working came about as an al­ter­na­tive concept to the tra­di­tion­al waterfall principle in which projects are handled phase by phase in a linear manner. This restricts flex­i­bil­i­ty, as every­thing is aimed towards a defined end result at the very outset. Errors only become obvious later and the return on in­vest­ment only ma­te­ri­al­izes after project com­ple­tion. The fast pace of dig­i­tal­iza­tion and the growing com­pet­i­tive pressure worldwide mean that this stiff and sluggish model is becoming less and less effective.

With agile methods, a direction or pre­lim­i­nary goal is defined rather than a strict end goal. After all, it’s vital that companies can respond quickly to changes. What’s more, for companies to be suc­cess­ful in a glob­al­ized economy, they need to follow trends and develop in­no­va­tion – instead of playing catch-up with com­peti­tors. Agile methods make it possible to an­tic­i­pate changes and thereby secure a com­pet­i­tive edge.

Besides these external factors that have pushed many companies to reexamine their es­tab­lished operating models, changes from within have also helped push companies towards agile working. More specif­i­cal­ly, the pref­er­ences of employees have changed: De­mo­graph­ic shifts and the as­so­ci­at­ed shortage of spe­cial­ist staff, among other factors, have forced company ex­ec­u­tives to rethink business success.

Employees no longer wish to work in rigid hi­er­ar­chies; they want more freedom in their work and to col­lab­o­rate as equals. Plus, projects are gaining in com­plex­i­ty with an in­creas­ing­ly complex en­vi­ron­ment. Con­ven­tion­al struc­tures are no longer suitable for effective work.

Agile prin­ci­ples have touched a nerve – among employees as well as business man­age­ment. They not only improve results, but also take into account staff pref­er­ences towards a more re­spect­ful company culture and a better work-life balance thanks to the agile mindset.

Benefits at a glance:

• Faster responses to market changes are possible
• Higher com­pet­i­tive­ness
• Better ef­fi­cien­cy
• Con­tin­u­ous product im­prove­ments
• Higher customer sat­is­fac­tion
• In­no­va­tion
• At­trac­tive­ness as an employer (for skilled staff)
• High employee sat­is­fac­tion

Agile working is probably the best me­thod­i­cal approach currently for many projects and companies. But it’s not a magical solution. Besides the many ad­van­tages, agile working also involves risks and dis­ad­van­tages that are important to bear in mind when opting for this method.

The fact that the approach foregoes setting a defined goal is one of its biggest dis­ad­van­tages. There is also the sig­nif­i­cant danger that teams may lose track of their ob­jec­tives in recurring work sprints and constant im­prove­ment processes, meaning projects quickly get out of hand. Work in iterative cycles makes it difficult to measure project progress.

If no clear time frames are defined, this can result in soaring costs for customer orders. In­ter­nal­ly, the flex­i­bil­i­ty of the approach also makes it difficult to conduct realistic resource planning, since no clear work results exist.

Compared to the con­ven­tion­al model, much more time needs to be planned for com­mu­ni­ca­tion – both for com­mu­ni­ca­tion with the employer as well as within the team(s).

If new employees join the team during an ongoing workflow, on­board­ing becomes far more chal­leng­ing in agile systems. After all, less attention is dedicated towards extensive doc­u­men­ta­tion. Instead, the focus is on practical progress.

Risks of agile working at a glance:

• Risk of never-ending op­ti­miza­tions
• Progress is difficult to measure
• Dif­fi­cul­ty of realistic resource planning
• More com­mu­ni­ca­tion is necessary
• Minimal doc­u­men­ta­tion makes on­board­ing more chal­leng­ing
• High social skills are required

Agile working has been hailed by some managers as a cure-all and guarantee of business success in the digital age. It often seems that agile working could solve all the problems of digital trans­for­ma­tion.

As such, agile working has become the subject of intense debate, es­pe­cial­ly its early phase. Here, the pro­po­nents of the old waterfall model and the sup­port­ers of the new agile approach have faced each other ir­rec­on­cil­ably, each claiming to represent the truth.

In many cases, agile working may be the best answer to chal­lenges sur­round­ing corporate culture or­ga­ni­za­tion. But the term ob­fus­cates the fact that there is not just one way to take the agile approach. There are actually a range of agile methods that differ from each other sig­nif­i­cant­ly. For companies, this means it is important to obtain all the necessary in­for­ma­tion and find the right agile approach for them by ex­per­i­ment­ing.

The decision need not be limited to adopting or rejecting agile working. A number of hybrid models have been developed in practice, where companies combine tra­di­tion­al and agile methods and create in­di­vid­ual solutions to meet their re­quire­ments.

Click here for important legal dis­claimers.