The 10 critical success factors for digital change in large companies

Digitisation is shaking up companies strongly. They have to make their processes, for example in product development, more flexible and pick up more speed; often the whole organization is put to the test. Especially large and hierarchically structured organizations, which are currently still successful, have problems with this. 

Many companies want to use agile methods for digital change. The introduction of Scrum on a large scale requires disruptive changes and has an immense impact on the work culture. Many companies and employees are not prepared for this, because there is no universal blueprint for such a change. Especially middle management is challenged, because many ways of thinking that were valid for a long time are suddenly questioned. Employees and managers also notice that digitization has really arrived in companies and is not a short-lived trend that they can ride out. The Corona crisis has once again accelerated this development. 

New providers are appearing on the market who can solve problems for the benefit of the customer and who are launching new products or new functions at much shorter intervals. Globalization has created more relevant players, and the pace of change is increasing dramatically. In the automotive industry, for example, the established companies are not afraid of competition from the established manufacturers, it is the newcomers such as Tesla, Google and Apple who are turning the market around with new products and ideas. Many established companies have great difficulty in responding to this dramatic change with their previous ways of working. 

Holistic approaches and transparency are essential 

There are more and more departments, teams and individual projects in which agile methods like Scrum are used. But this is not the end of the story, these are partly just local optimizations that can even endanger the entire system. Our business world is still based on Taylor‘s principle of division of labor. This creates organizational complexity with many interfaces and time-consuming handover procedures. In complex systems this is then almost impossible to master. Therefore, a digital transformation first needs an agile transformation.

We need a holistic approach, and that‘s where most companies are still in the early stages.

Creating an agile work culture first requires a change in the thinking of the employees in the company - this alone can take years. Although many companies are already working with agile methods like Scrum, the waterfall model still often dominates the overall process - for example, component teams that generate an over-head of coordination, through e.g. quarterly planning and release cycles in product development. This makes it difficult to react quickly to market changes. Moreover, in hierarchically managed companies the principle "knowledge is power‘‘ still prevails. In many cases, management structures have established themselves that pass on just enough information to their employees to enable them to find their way around in their specific context. With today‘s market dynamics and growing complexity, companies are dependent on fast and decentralized decision-making processes. Employees ?on site“ should make the right decisions, quickly and efficiently.

Self organization and self-managed teams are the key to success.

But employees can only do this successfully if they have the right information at their disposal. Management often enjoys the new transparency through agile methods, but is less interested in acting transparently itself. The fear of losing power and control is often still very strong here. Often managers do not pass on important information - and in the past they did not have to. This increases the probability that wrong decisions are made at the operational level because important foundations for decision-making are missing.

Ten success factors for digital change

01

Change processes are doomed to fail if employees who are affected by the change do not identify with the change. It must therefore be clear why changes are necessary and where the optimization goals lie. Management must create an awareness that flexible and agile approaches are the necessary prerequisites for these changes. The more employees are involved in the decisions and can shape the change themselves, the more they identify with the new way of working. We call this ?Transform by doing“. 

02

Structures must be created in which employees can network regularly in order to bundle and make use of all the knowledge in the company. This is all about breaking down old silos. 

03

In order for employees to find the right solutions for the company and its customers, they need a corresponding value system and optimization goals. Values are determined and established through continuous exchange and consulting processes with all employees. Optimization goals provide long-term orientation. 

04

The management must be able to do both: Leading and networking. Networking always means a certain loss of control over information flows. 

05

It is important that agile transformation is not limited to the IT department; specialist departments must be integrated into the transformation process. This requires additional investments in IT structures and employee training. 

06

It is about bringing the agile culture into the entire organization. This requires consistency, discipline and staying power, because this transformation can take years and decades. LeSS (Large Scale Scrum) offers the necessary structures and mechanisms to stimulate such a cultural change. 

07

Digital transformation needs agile transformation. Agile transformation needs a culture of willingness to change. Culture building cannot be managed, it can only emerge gradually. It is therefore a matter of excellence in dealing with open processes. Employees must be introduced to these changes, have a say in these changes and be taken seriously with their fears. 

08

The entire product development must be reorganized with all processes. Since this can take a long time, companies should start all the earlier. 

09

It is important to start at all and take the first steps. A so-called Agile Inception is suitable for the start, for example, which first of all outlines which goal (optimization goals) is to be achieved or which vision is to be pursued with priority. 

10

Acquisitions of start-ups can make sense as a first step in order to bring new impulses into a rather classically positioned company. In the medium and long term, however, it is important to bring the start-up idea into your own organization. 

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