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Agile Organizations

Agile: From Buzzword to Reality

  • Wiebke Gronemeyer
  • Thomas Schnelle
  • Thursday, 6. October 2022
Agile: From Buzzword to Reality
© porcorex

In a mature organization, a truly agile approach requires a realignment of decision-making structures that goes far beyond employee empowerment.

Within an agile approach lies the promise of acceleration

It is a word that seems to be on the tip of every pharmaceutical professional’s tongue: Agile. Organizations everywhere are turning to a so-called agile approach in the hopes of developing their products faster and speeding those products’ arrival into the marketplace. This has been especially true in drug-development organizations, where leaders hope the new approach might make the industry’s highly standardized and regulated processes more flexible. For these leaders, the consensus is clear: “Within an agile approach lies the promise of acceleration.”

When a mature organization proclaims agility to be the new North Star, mid-level managers throughout the company often interpret this as a mandate for a profound reorientation at every level: Processes must be changed so initiatives can fail fast; employees must exchange a functional mindset for an entrepreneurial interdisciplinary spirit; technology must shift from supporting processes to providing an operating system of its own. But without deep structural changes, this mandate must inevitably run into roadblocks, overwhelming the organization on many levels. Amid normal company operations, such interventions often prove impossible or unfeasible. So, if we don’t want agile initiatives to wind up as nothing but fodder for glossy company brochures, we must ask: “How can we create incremental changes that slowly spread true flexibility, resilience and speed throughout the organization?”

To this end, we would suggest adopting a new definition of agility: the ability to find suitable solutions through decision-making structures that can react spontaneously and flexibly to changing parameters.

Empowerment ≠ Agility

All too often, companies believe the varied challenges of creating more flexibility can be universally met by employee empowerment.

In these cases, employees are asked to act on their own initiative and coordinate independently. They’re told they should trust each other and trust in themselves. This approach hinges on employees’ personal capabilities; it assumes that the employees of the past were marionettes of their structures, and that they were awaiting a newly found freedom that could only be gained through belief in themselves — rather than a belief in their organizations.

With this mistaken focus on empowerment, leaders overlook the potential for change embedded in an organization’s structures. Decision-making processes, as well as the impact they have on employee behaviors and the speed of product development, go untouched.

Teams Need Power to Take Responsibility

In traditional drug development projects, team members can prepare and propose decisions, but the power to approve any plan lies with managers further up in the company hierarchy. Under this system, every team member is oriented toward the higher levels of that hierarchy, knowing that the true power rests there.

For these employees, empowerment messaging will have little impact if the true power remains out of reach. How can team members act on their own initiative if they cannot make the decision for or against a change in the development plan on their own? If supervisors cannot or will not relinquish their prerogatives, what do employees stand to gain from an empowerment campaign? Employees’ attitudes will not change without an adjustment of the organizational structures that define how decisions are made.

It is only without the safety net of the hierarchy that employees on cross-functional teams can act autonomously and on their own initiative. With this freedom, decisions can be made by the working teams, dispensing with the need to coordinate decision proposals with the hierarchy. But beware: any structural change triggers consequential problems.

Implement new communication processes for x-functional coordination

The decision-making power of hierarchical leaders was not useless. It has ensured the cross-functional coordination necessary for successful development projects. For any organization seeking to dismantle its hierarchy, new communication processes and frameworks need to be established to take the place of those being left behind.

Where hierarchy is abandoned, more leadership becomes necessary

The empowerment of agile project groups tempts individuals to take action and move forward with projects that have been waiting to be launched for some time. However, these are mostly projects from the isolated functional point of view of the individual. Leadership needs to make sure that those projects create value from a cross-functional perspective. But who ought to take the lead? The one with the most expertise? The one who has been around the longest?  Expertise and knowledge of organizational processes can be beneficial to leadership but can also get in the way of new ways of working. Rather, one should look for those personalities who can see a career opportunity in providing leadership impulses for cross-functional value creation.

Create Agility with evolving coordination models.

A non-hierarchical approach does not require that teams operate single-handedly or without plans. Instead, organizations working to reduce or eliminate their hierarchy must adopt extensive and detailed process rules. Organizations with pioneering agility initiatives find new, smart ways to coordinate their newly decentralized decision-making, through initiatives such as daily scrum meetings. For example, instead of delaying the approval of data readouts based on a fixed governance cycle, agile project teams can work with evolving coordination models that support real-time decision-making that can be based on interim data readouts.

Real-time decision-making can be further enhanced with a transparent, multi-project resource management system that informs about proposed resource allocation and simultaneously allows for reallocation decisions that take into account the whole development portfolio. This sort of change represents a particularly significant shift for pharmaceutical development teams. In recent years, even before the COVID-19 crisis, many in this corner of the industry have lamented the inflexible and often slow coordination processes that have become common. In just one example, the decision of whether a milestone has been reached and the next development stage can begin can only be made through complex coordination processes including several hierarchical levels.

Focus on Cross-Functional Coordination First

Accelerating projects is not merely a matter of changing mindsets. Decisions are not made in less time through confidence-building measures, but because coordination processes have been altered to benefit decision-making on the team level. Development plans are executed faster not because employees have more confidence in their performance, but because they are given more freedom in the detailed planning of work.

Trust is not a prerequisite for the acceleration of development projects, but rather a consequence of well-adjusted cross-functional coordination processes in which it is not the hierarchy but the ability to enter into discourse with one another that is decisive.

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Wiebke Gronemeyer

Dr. Wiebke Gronemeyer

is a Senior Consultant at Metaplan. She is passionate about shaping strategies in complex environments through discourse.

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Thomas Schnelle

Dr. Thomas Schnelle

is a Partner at Metaplan. He helps teams understand diverging stakeholder interests to enable concerted action.

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