Career design in agile organizations


Master's Thesis, 2019

95 Pages, Grade: 1.0


Excerpt

Contents

List of figures

1 Introduction

2 Career theory
2.1 Historical development
2.2 Relevant career models
2.2.1 Specialist career
2.2.2 Boundaryless career
2.2.3 Protean career

3 Agile organizations9
3.1 Concept of agility
3.2 Cultural and structural characteristics
3.2.2 Cultural characteristics
3.2.2.1 Self-organized teams
3.2.2.2 Peer regulation
3.2.2.3 Incremental approach
3.2.2.4 Continuous learning
3.2.3 Structural characteristics
3.2.3.1 Co-existing layers
3.2.3.2 Interdisciplinary teams
3.2.3.3. Servant leadership
3.2.3.4 Dissolved staff functions
3.3 Different manifestations of agility
3.4 Scrum as an exemplatory agile method

4 Derivation of career factors - literary findings
4.1 Career appearance
4.2 Career management
4.3 Promotion frequency
4.4 Promotion criteria
4.5 Job title
4.6 Monetary incentivation
4.7 Career paths
4.8 Comprehensive overview

5 Research methodology
5.1 Qualitative study
5.2 Data collection
5.2.1 Interview design
5.2.2 Selection of interviewees
5.2.3 Interview execution
5.3 Data analysis and processing

6 Empirical findings
6.1 Urgency for action
6.2 Career appearance
6.3 Sections of the career process
6.3.1 Fragmented career process
6.3.2 Performance assessment
6.3.3 Promotion execution
6.3.3.1 Role change
6.3.3.2 Promotion frequency
6.3.3.3 Promotion criteria
6.3.3.4 Job title
6.3.3.5 Career paths
6.3.4 Monetary incentivation
6.3.5 Professional training
6.4 Works council
6.5 Agility and career

7 Discussion
7.1 Key findings
7.2 Decision-making bodies in the career process
7.3 Individual versus organizational career interpretation
7.4 Specialist, boundaryless and protean career elements

8 Conclusion

Bibliography

Appendix

List of figures

1 Derivation of cultural characteristics out of two

2 Kotter's (2013) dual operation system

3 Armutat's (2018) secondary organization

4 Leybourn's (2013) circular organization design

5 Characteristics of agile organizations

6 Distribution of personnel tasks in agile organization

7 Literary findings

8 Interview guideline

9 Coding template

10 Decreasing peer regulation throughout the career process

1 Introduction

In 1946, Einstein had already taught us that “a new type of thinking is essential if mankind is to survive and move towards higher levels“ (as cited in Leybourn, 2013).

In times when markets are highly competitive and shaken by ongoing disruptions, the environment hosts a flood of information and thus becomes more complex. Internally, employees exert pressure with their requests for New Work approaches. Therefore, organizations need to apply a new way of thinking, as Einstein labels it, in order to survive in the predominant VUCA-world. Many organizations see agility as a panacea and thus, the term is currently on everyone's lips in the business world.

New working conditions associated with agility, such as self-organization instead of managerial commands, constantly changing tasks instead of strictly imposed job descriptions and interdisciplinary networks instead of hierarchically structured job families, raise the question of how employees can pursue a career in such an organizational frame. Especially interesting in this context is the appearance of career steps as hierarchical levels increasingly disappear and employees have more decision-making power than their managers due to the new structures. Also the stakeholders regulating the career advancement of individual organizational members are of particular interest as agile organizations follow a servant leadership approach and contain only highly reduced Human Resouces (HR) functions.

This thesis aims to examine the research question of how career design is interpreted in agile organizations.

With regard to career research, new career models and attitudes appear in academic literature, such as the boundaryless and self-directed protean career, but so far no empirical studies have been carried out to show whether these are particularly prevalent in agile organizations. Only the authors Doege and Thode (2019), Laloux (2014) and Maximini (2018) have so far empirically examined the culture and HR processes in agile organizations, with career design always staying a peripheral issue. This thesis puts the topic center stage and aims to qualitatively examine and explore career design in agile organizations and to discuss it against the background of literary identified career design factors.

For this purpose 19 representatives of agile organizations as well as consultants were interviewed. The empirical study revealed interesting insights especially concerning the relevance of jobtitles, the subjective notion of career steps as well as the role of the works council in agile organizations. Also a pattern regarding the involvement of peer regulation in different sections of the career process could be derived.

The chapters „Career theory“ and „Agile organizations“ constitute the theoretical foundation of the thesis. While the former outlines the historical development of career-related concepts and ends with introducing three relevant career theories, the chapter „Agile organizations“ deals with the organizational framework, in which career design is taking place. Hereby, eight cultural and structural characteristics of agile organizations are elaborated with the aim to provide a comprehensive illustration of the agile hemisphere. This is crucial for understanding the interviewees‘ statements at a later stage.

Moreover, the literary depiction of agile organizations serves as a basis for deriving relevant career design factors in the consequent chapter. A comprehensive overview of the career design factors in agile organizations, found in academic literature, complements the theoretical part of this thesis.

The practical part focuses on the execution of a qualitative empirical study and starts with a justification of the selected research methodology. In the frame of a nested case study, employee and employer representatives of agile organizations as well as consultants were interviewed regarding their interpretation of career design in the particular study subjects. A flexible interview guideline in the shape of a mindmap as well as the abductive analysis technique of template analysis enabled explorative findings. The chapter „Empirical findings“ summarizes them comprehensively. From the broader scope and more subtle classification of the empirical in contrast to the literary findings one can already see that the conducted study contributes to an enriched understanding of the research topic.

The chapter „Discussion“ first represents the ten key findings of the thesis. Subsequently, the most significant empirical findings are picked out and discussed in detail with reference to academic literature. Hereby, especially issues like the decreasing involvement of peer regulation throughout the career process, disparities between the individual and organizational interpretation of career steps as well as the prevalence of a protean career attitude and psychological career boundlessness in agile organizations are highlighted.

2 Career theory

2.1 Historical development

Before an empirical research on career design in agile organizations can be conducted, the theoretical concepts of career and agility in organizations need to be set out first. The present chapter concentrates on the formerand provides input to the following questions: How is career defined? Which aspects have a forming influence on career? How did career theory develop over time?

Career can be seen from different perspectives: economists attribute the accrual of human capital to it (Becker, 1975), whereas from a political perspective career can be seen as an effort to obtain power (Kaufman, 2010). At this point a more neutral definition according to Arthur, Hall and Lawrence (1989) shall be recognized, which describes career as an “unfolding sequence of a person's work experiences over time“ (p.8). On the one hand this definition implies that career is a phenomenon applicable to all kinds of working people and on the other hand it emphasizes the temporal aspect of career developing over time (Hall, 1976). Bringing in the psychological construct of self-concept, one can argue that career evolves out of continuous enactment of the career holder driven by the pursuit of future career sucess (Weick, 1996). Thus, career is not a fixed state, but rather a continual and also perceptual phenomenon, on which individuals constantly construct meaning. Conscious of the constructivist aspect career entails, Nicholson and West (1989) propose to describe the sequence of work experiences with “the more neutral term ,work histories' [...] and reserve the term ,career' for the sense people make out of them“ (p.181). This sense making out of previous work experience and career success determines further career evolvement (Nicholson & West, 1989).

But career is not only dependent on the aspirations and endeavours of the individual to achieve job progress. This individualistic perspective is not wrong, but it is fragmentary because it neglects the second core element of career dynamics: the organization's features determining the work setting, where career takes place (Rosenbaum, 1989). Rather career dynamics can be described as a “dialectical interplay“ (p.467) between the two foci, individual and organization, as career happens at the interface between them (Derr & Laurent, 1989). Goffman (1959) summarizes the duality of career as follows: “One value of the concept of career is its two-sidedness. One side is linked to internal matters held dearly and closely, such as an imageof self or felt identity: the other side concerns official position, jural relations, and style of life, and is part of a publicly accessible institutional complex” (p.127).

Career conceptions have changed during the course of time: while until the 1980's career was characterized by hierarchical progression along with increasing responsibility and seniority, amongst other things the emergence of flatter hierarchies in organizations put this bureaucratic idea of career slightly into the background (Adamson, Doherty & Viney, 1998). Overall three main shifts in the employment context are recognizable, which led to a phenomenon, Nicholson and West (1989) label as blurred career paths.

The mentioned reduction of hierarchical levels implies that career advancement no longer means strict upward movement. Firstly, career conception has changed in the way that also lateral specialist development is considered as progression (Adamson et al., 1998). Secondly, the increasing requirement of individuals to improve their own employability and thus the desire to upgrade competencies gains more relevance. This implies, that career is no longer solely managed by the organization but the individual gets more active in terms of his own career design and career rather incorporates “a series of mutually beneficial transactions based on both organizational an individual needs“ (Adamson et al., 1998, p.256). Thirdly, the long-term relationship between employer and employee is replaced by short-term employee loyalty and career orientation. This implies, that employees do not necessarily plan their whole career happening within the boundaries of one organization, but across several organizations (Adamson et al., 1998; Arthur & Rosseau, 1996).

The above mentioned alterations do not imply that career is not present anymore, rather the previously underlying assumptions have changed so that career is perceived more extensively and dynamically (Adamson et al., 1998). The significant question in the further course of this thesis is: to what extent has the agile body of thought helped in shaping this development or is there a completely different idea of career in agile organizations?

2.2 Relevant career models

The three described changes in the conception of career have been postulated as separate career theories in academic literature namely the boundaryless career (Arthur & Rosseau, 1996), the specialist career (Domsch, 1994) and the protean career (Hall, 1976). Due to their relevance in the consideration of career in an agile work environment, they shall be introduced shortly in the following.

2.2.1 Specialist career

The specialist career's theory cannot be traced back to a certain author group. While the scientific dealing with this practical phenomenon started in the Anglo-American region around the 1950s, the first article in the German-speaking area was published in 1968 (Sauermann, 2011). Neuhaus (1968) pleads in this article for the necessity of a parallel hierarchy with lateral direction to offer development opportunities to qualified scientists. The occupation with increasingly administrative tasks in the frame of prevalent management career paths leads to their intellectual impoverishment and to potential brain drain. As the empirical study will be conducted in the German-speaking area also area-specific literature shall be cited, specifically the work of Domsch (1994) because he was the first to establish a theoretical concept regarding specialist careers. The author hereby distinguishes three different types: expert career, project career and committee career.

Comparing to the classical management career path, which means linear advancement with increasing employee and managerial responsibility, persons pursuing an expert career follow a horizontal career path, are promoted due to their specialist competence and hereby are given extended function-specific responsibility (Domsch, 1994). Although expert careers have the clear advantage, that expert competence stays within the team and is not lost due to occupation with mainly managerial obligations (Granados & Erhardt, 2012; Häusling & Gloger, 2011), they are also criticized. The fostering of specialization can be perceived to decrease the employee's interconnected thinking and his versatility to be employed also in other functions. Furthermore, due to its past stepmotherly treatment in practice, the expert career often has recognition problems (Ladwig & Domsch, 2011). Therefore, Hofmann (2006) pleads, that experts shall reach the same salary levels as managers, shall be included in decisions as consultants or technical project leaders and shall be offered the same development opportunities as employees pursuing a management career.

Project career means the advancement and increasing responsibility in projects up to project leader level or advancement expressed by the increasing relevance of the project managed. Due to the temporary limitation of projects, hereby an additional career opportunity is created, which superimposes the actual management and specialist career path. Furthermore, from an organization's perspective the employee's potential can be spotted and developed during projects before she re-enters the non-project business again. Hereby problems may arise as there is often no adequate translation from project responsibility level to positions in management or expert career paths (Domsch, 1994).

Committees, to which the third type of specialist career refers, result out of decentralization, when the responsibility for certain topics is given to the organization. One can also see committees as circles where the participants meet for regular discussion rounds in order to elaborate solutions for certain issues. Analogously to projects, committee careers can be designed as movement from committee member to coordinator or as the participation in increasingly important committees (Domsch, 1994). As committees are organization-specific, this type of specialist career is not as prevailing in practice as the expert and project career.

Overall, the prevalent high relevance of specialist careers follow out of the fact that they provide an alternative to limited management positions, hereby increasing the flexibility of employees‘ professional development and can lead to higher employee motivation and loyality (Domsch, 1994).

2.2.2 Boundaryless career

To understand the boundlessness of career, one needs to take a deeper look at the meaning of boundaries within this context. Opposed to the conception of boundaries as clear separation between two fields, the originators Arthur and Rosseau (1996) consider them as something to be traversed in the context of career conduct. The former understanding of boundaries “confined people to linear career paths, a functional focus and a narrow specialization“ (p.371). A career conception, which deliberately crosses boundaries, means going beyond solely one employment relation and is inter alia characterized by experiences in various functions and continuous learning of new skills. The authors state, that they do not define a specific career path, rather they want to override the traditional employment presumptions by their idea of boundlessness. This kind of career conception suggests, that there is constant progression despite its dynamic and indefinite form (Arthur & Rosseau, 1996).

Overall the authors have elaborated six different meanings of the boundaryless career, the most popular of which is the movement across the boundaries of a single employer and thus inter-organizational mobility. The conception of the boundaryless career is usually reduced down to this feature (Briscoe & Hall, 2004; Gubler, Arnold & Coombs, 2014). Due to their potential relevance in the context of agility, three further selected meanings shall be introduced at this point as well. The transcending of boundaries can be found in networks outside the organization, which support and maintain the career of e.g. a real estate agent. Furthermore, boundlessness can also be expressed by the career holder's subjective interpretation of his / her career independent of institutionalized measured quantities like firm's or societal viewpoints. Ultimately, the dissolution of previously valid promotion rules and hierarchical reporting lines within an organization can also be considered as the opening towards boundaryless career opportunities (Arthur & Rosseau, 1996). All of the described versions of boundaryless career have the following in common: “Independence from, rather than dependence on, traditional organizational career arrangements“ (Arthur & Rosseau, 1996, p.6).

Ten years after its formation, Sullivan and Arthur (2006) extended the concept by the two dimensions, physical and psychological mobility. Physical mobility includes the previously mentioned inter-organization mobility as well as the actual move between jobs or industries. Psychological mobility can be found in persons “enjoy[ing] working on projects with people across many organizations and feel[ing] energized and enthusiastic about engaging in new experiences and situations outside of the organization“ (Volmer & Spurk, 2011, p.209). For instance, academics or consultants can be considered as persons with a high psychological and low physical mobility, as they enjoy high variability in their job content without the necessity of changing their employers. The search for personal development outside of the organization in the form of volunteering or learning a language can also be considered as psychological mobility (Sullivan & Arthur, 2006).

Although the boundaryless career conception is widely known (Gubler et al.), it has also been highly criticized. In the following, the main critique points of the authors Bocklehurst (2003) and Gunz, Evans and Jalland (2000) shall be quoted. The authors argue against the term boundaryless from two sides. As there is a lack of available data underpinning the dissolution of organizational boundaries, the concept stays merely a hypothesis. On the other hand they consider boundaries as crucial orientating oneself in an increasingly complex work environment, finding their position and making sense out of it. Therefore the authors argue, that career boundaries have not been dissolved but rather “have become considerably more complex and multifaceted in nature“ (Gunz et al., 2000, p.36). Furthermore, it is questionable to which extent the American concept of boundaryless careers and specifically physical mobility can be applied to the German labour market, which is legally more regulated by cancellation periods, collective agreements etc.

2.2.3 Protean career

The protean career concept was established by Hall in 1976. The term “protean“ goes back to the God Proteus in Greek mythology, who was able to transform himself at his discretion (Gubler et al., 2013), and therefore the term stands for adaptability, flexibility and changability (Volmer & Spurk, 2011). Hall (1976) defines the protean career as being “shaped more by the individual than by the organization and may be redirected from time to time to meet the needs of the person“ (p. 201). What then characterizes a protean career?

The protean career, which represents rather an attitude than a proper career path, is characterized by the person's drive for self-fulfillment and by the person's individual career choices (Hall, 1976). The protean career does not represent an upward development during the person's period of employment supported by formal trainings; rather career happens through lifelong transitions, new experiences and the acquisition of new skills. The development within the protean career is self-directed and managed by the individual. It can be triggered by work challenges and is characterized by various short learning cycles (Hall & Moss, 1998). Hall (2002) considers these learning cycles as repeating every few years, thus advancement in a protean conception means continuously learning. Success in a protean career conception is psychologically expressed as “the feeling of pride and personal accomplishment that comes from knowing that one has done one's personal best“ (Hall & Mirvis, 1996, p. 26). Consequently, indicators for success in a protean career conception are subjective like satisfaction or self-fulfillment. In contrast, objective success would be expressed by salary, status and decision making power (Hall, 2002).

As the above description mainly incorporates the individual's attitude in a protean career, two short examples shall be given as to his attitude can manifest itself in observable behaviour. Protean career oriented people “tend to engage in an interminable series of experiments and explorations“ (Weick & Berlinger, 1989, p. 321) or might aim high and put more effort towards their target achievement as they feel in charge of their own career and development (Volmer & Spurk, 2011). To make protean career orientation measurable, Briscoe and Hall (2006) define the two dimensions of “values-driven“ and “self-directed“ as decisive. The former expresses the guidance in career decisions by intrinsic values rather than by external factors like salary or promotion opportunities. The latter refers to the career holder‘s independence and the self-control about career also including opportunities for adaptation (Briscoe & Hall, 2006).

The protean career conception comes across with critique, whereby the two main critique points shall be set out in the following. One limitation stems from the imprecise definition of the concept's key terms. It is argued that the meaning of the term protean is solely vague and that values, which play a key role in this career conception, have not been clarified further (cited in Gubler et al., 2013). The second critique point refers to Hall's (2004) intention, that being protean is necessarily positive and that individuals shall be made protean. Gubler et al. (2013) argue, that “‘making‘ someone protean would contradict the very core of the concept that portrays an individual as being values-driven and self-directed“ (p. 18). As the boundaryless and the protean career concept have intersections, it shall be highlighted on this occasion, that the boundaryless career concept relates to various types of mobility, whereas the protean career conception focuses on the individual's agency (Gubler et al., 2013).

3 Agile organizations

The present chapter focuses on the delineation of agile organizations. As agility is basically understood as the adaptation toa frequently changing environment, the term organization shall consequently be defined from the perspective of contingency theory1. Hereby, it is assumed that the highest level of effectiveness can be reached when the organization's structures fit its environment (Lawrence, 1993). Hereby, organizations are considered as “adaptive organisms existing by process of exchange with the environment“ (Smircich, 1983, p.342).

Due to its extensive impact on organizational thinking and acting, the term agility needs a more in-depth clarification. After the emergence, meaning and relevance of the concept have been outlined, a description of agile organizations‘ characteristics follows, concerning culture and structure. Subsequently, different manifestations of agility in organizations shall be illuminated. The chapter concludes with a short introduction to Scrum, a specific agile management framework, which is prevalent in the study subjects.

3.1 Concept of agility

The rate of change in the business world is not going to slow down anytime soon. If anything, competition in most industries will probably speed up over the next few decades. Enterprises everywhere will be presented with even more terrible hazards and wonderful opportunities, driven by the globalization of the economy along with related technological and social trends. (Kotter, 2012, p.130)

By this quote, Kotter describes the increasing speed of change in the environment of organizations and pleads for the fundamental change of organizational thinking patterns in order to survive in the dynamic 21st century. Likewise, Häusling and Kahl (2018) describe how technological transition and digitalization are producing vast amounts of available information, which in turn gives customers a better understanding of the market and thus, enormously intensifies competition among companies. This ultimately leads to an increase in the dynamic and fast pace of entire markets.

In academic literature this kind of environment is labelled as VUCA, an acronym which describes the surroundings of organizations as a complex system, in which volatility and ambiguity are predominant. This leads to uncertainty of organizations in decision making (Mack & Khare, 2016). Traditionally-structured organizations with their bureauratic elements, such as hierarchy-based responsibilities, approval processes and extensive control loops, hereby reach their limits (Häusling & Kahl, 2018) and see a transition towards more agility as the solution to survive in the VUCA-world. Moreover, organizations see themselves increasingly confronted with employee desires for more communication at eye level and self­realization at work, among other things, which intensifies the urge for agility and an associated learning culture (Weber, Fischer & Eireiner, 2018). Trost (2018) argues, that interconnected markets also require interconnected players and thereby refers to the interdisciplinary team composition prevailing in agile organizations, whereas Rigby, Sutherland and Takeuchi (2016) describe incremental and short-term processing as crucial when encountering uncertainty. Apart from the above mentioned, agility in organizations has further characteristics which will be discussed in chapter 2.2 in detail. At this point it shall be focussed on the emergence of agility and its meaning.

The term agile, which means - according to his Latin origin - easily movable, flexible and versatile, was formulated in the business context first in 1950 by Parson and was picked up by the further development waves of the learning organization and agile manufacturing (Armutat, 2018). In 2001, the Manifesto for Agile Software Development, which comprises principles of collaboration for software development determined by 17 software developers, made agile approaches internationally known (Fischer, 2016). In academic literature there is no shared understanding and thus no common definition of agility in organizations. Foerster and Wendler (2012) found overall 24 different definitions published from different authors in the time period between 1982 and 2011. As mainly agile organizations with a software development background are interviewed in the empirical part of this thesis, the fundamentals of the agile manifesto shall serve as the basis for further considerations.

The agile manifesto (Beck et al., 2001a) describes the following four central values of collaboration: “Individuals and interactions over processes and tools, working software over comprehensive documentation, customer collaboration over contract negotiation [and] responding to change over following a plan“ (p.1). Thereby, the importance of the human element is emphasized as well as of the actual outcome instead of its documentation. The customer is considered as the central communication partner and the changeability of goals is accepted as the working condition.

These values are underpinned by twelve principles (Beck et al., 2001b). The most relevant of them can be summarized as follows: Software developing teams comprise humans of different disciplines and work in a self-organized way. Their team members are trusted to be able to accomplish the job. The team orientates itself towards the needs of the customer and adjusts its course of action frequently to changeable customer requirements and environmental conditions. The aim is to deliver functional outcome on a continual basis and to self-reflect in order to make one‘ own behaviour more effective.

The above statements got summarized to an agile mindset and are no longer only relevant for software development, but also for project management and organizational development in general (Fischer, 2016).

3.2 Cultural and structural characteristics

“The understanding of leadership and organization manifests itself in the cultural and structural parameters within an enterprise or a subdivision“2 (Trost, 2018, p.65). This citation sets the frame for the further structuring of this thesis. It is assumed that agility in organizations postulates itself in cultural and structural aspects.

The allocation of the diverse aspects of agility to the two categories is done according to a distinction proposed by Janicijevic (2013): structural factors influence the members of the organization exogenously by providing an external frame through e.g. composition of units, allocation of labor etc. In contrast, cultural factors affect individuals from the inside by guiding their behavior through organizationally shared assumptions and values. Despite the awareness of the existence of subcultures within an organization, for simplification purposes an integrative perspective shall be taken which assumes an organization-wide homogeneous culture (Martin, 2001).As culture often manifests itself in visible artefacts like the organization's structure (Schein, 2009), and therefore may provide a better understanding of the latter, the cultural characteristics arenamed first.

3.2.2 Cultural characteristics

As previously stated, the agile manifesto serves as the basis for the thesis‘ understanding of agility. Specifically two of its values are highly relevant for further considerations. Out of the statement “individuals and interactions over processes and tools“ (Beck et al., 2001a, p.1), the high value of individuals as well as of collaboration can be derived, which manifests itself in the two cultural aspects self-organized teams and peer regulation. The value “responding to change over following a plan“ (Beck et al., 2001a, p.1) expresses the readiness to adapt and can be found again in the cultural aspects incremental approach and continuous learning. Figure 1gives an overview.

Abbildung in dieser Leseprobe nicht enthalten

3.2.2.1 Self-organized teams

The human image prevalent in agile organizations is the one of an engaged and autonomous employee. It is assumed that individuals are not lazy, rather they see physical or mental activity as natural as rest. Humans wish to get involved, want to act self-directed towards meaningful goals and strive to take responsibility. The employees‘ primary motivator is understood to be the work itself and therefore is intrinsic. Furthermore, employees always strive to perform as well as possible. This human image is equivalent to McGregor's Theory Y (Kasch, 2013; Maximini, 2018; Trost, 2018). McGregor (1960) states that organizations, living the Theory Y, distribute responsibility decentrally at employee level and have leaders solely acting as coaches instead of bosses. The assumption of responsibility by the employees in turn reinforces their engaged behaviour.

Consequently, the culture in agile organizations is characterized by trust. The employees are trusted to be able to solve the particular problem and are provided with the necessary resources and decision making power. Laloux (2014) expresses the control mechanisms in such a culture as follows: “When trust is extended, it breeds responsibility in return“ (p.81). In agile organizations all employees work in teams which are self-organized. This means that the the team manages the work on its own and that the team members decide collectively how they want to handle specific situations in future (Moran, 2015). Due to trust and authority given to the teams, the accountability for the work delivered also lies with them and not with the team leaders. Laloux (2014) sees the advantage of self-organized teams in the “collective intelligence of the system“ (p.85) and compares the constellation with the free market economy, which works through self-regulation much better than a centrally planned economy. An important precondition, so that teams can make decisions, is transparency and therefore not only a culture of trust, but also of openness. The agile organization gives their employees access to financials and other relevant figures and explains relevant relationships, so that the self-organized team has a sufficient data base for decision making (Seibert as cited in Kasch, 2013) .

3.2.2.2 Peer regulation

What isthe consequence of decision making authority located in self-organized teams? On the one hand the team is committed to its work product (Leybourn, 2013) and on the other hand it experiences the consequences of its own actions such as the customer expressing praise or critique directly towards the team. This is the reason why the team members actively engage themselves and also emotionally invest in decisions by voicing disagreement or confronting each other. Often, self-organized teams only come to decisions after heated disussions (Trost, 2018).

A factor, which strengthens the employees‘ feeling of responsibility for the organization overall, is that they do not take a temporary fixed position, but engage in changing roles. The explanation for the existence of roles instead of positions will be given in the next subchapter; at this point solely the consequence of it shall be pointed out. Changing roles effect that no employee permanently occupies a specific territory within the organization. Rather, employees take responsibility for different product parts in different teams from time to time and therefore also adress issues, they sense as relevant, outside their present area of accountability (Laloux,

2014) . An example, which utilizes the self-experience of own decisions‘ consequences and the collective sense of ownership, is dealing with travel costs: in agile organizations the topic is handled either by letting the employee pay for 5% of the travel costs from his salary or by making an individual employee's travel costs transparent to all in an internal portal (Trost, 2018).

While “in the past, the hierarchy was the mechanism that held people to account“ (Leybourn, 2013, p.96), in agile organizations the team members hold themselves mutually to account. They feel committed to their colleagues and to adjacent teams and consequently, peers take the boss‘ place in agile organizations (Trost, 2018). Laloux (2014) aptly captures the peer pressure regulating agile systems:

Every role people take is a commitment they make to their peers. They are not accountable to one boss; every one of their peers is a boss in respect of the commitments they made. [...] [A]nybody can put on the hat of ,the boss' to bring about important decisions, launch new initiatives, hold underperforming colleagues to account, help resolve conflicts, or take over leadership if results are bad and action is needed. (pp. 92-93)

The decision making authority within the team and the absence of a leader in a hierarchical sense (Kasch, 2013), does not necessarily imply that all team members are equal. In fact individual team members take leadership in specific questions based on their functional experience and willingness to contribute. Therefore one can speak of a situational-useful and fluid hierarchy which emerges out of an individual's ability and interest as well as of the appreciation of her performance (Gloger & Häusling, 2011; Laloux, 2014).

3.2.2.3 Incremental approach

To understand the reasonableness of an incremental approach, a deeper insight into the type of tasks handled by agile organizations is necessary. As previously mentioned, agile organizations find themselves in a VUCA environment. The problems to be solved are ambiguous and complex, which means that teams need to work on them over a period of time. Furthermore, due to the continuous environmental change, there is a solely vague target vision, but no precise or predefined product conception. This leads to a process reliability (Trost, 2018). To deal with this high degree of uncertainty, agile teams apply a muddling through technique by which they proceed stepwise and think and act in short-term cycles. Through splitting the target conception up into various separate work steps, complexity can be reduced and the task becomes more approachable. In the frame of this incremental approach, teams can apply learnings out of previous cycles and adjust their action accordingly (Schwaber, 2007). With every cycle accomplished the target vision becomes more precise.

The waterfall model represents the opposite to an agile incremental approach. While teams in the concept of waterfall strictly work according to a plan made at the outset of the project and pass on the product increment from department to department along the value chain (Gloger & Häusling, 2011; Trost, 2018), agile teams with an incremental approach can react to inconsistencies and arising customer requirements during the project flow as they plan their work gradually (Trost, 2018). This way of short-cycle thinking manifests itself in e.g. “GEMO- decisions [...]: if the interim result is ,good enough to move on‘, it is inefficient to further optimize it“3 (Armutat, 2018, p.130). This is because the timely delivery to the customer is put to the foreground and it is assumed that there will be changes in the future anyway.

What are the consequences of an incremental approach to the task distribution within the team? Due to the change of tasks in every iteration, it does not make sense to label them as fixed. In agile organizations, positions are replaced by roles which team members temporarily take over (Gloger & Häusling, 2011). Laloux (2014) specifies roles as “evolv[ing] organically, all the time, to adapt to changes in the environment“ (p.120) and exemplifies an employee in a French industrial enterprise, who convinced his peers of the necessity of an idea scout role for more innovativeness in future. After the peers‘ agreement he visited companies across the world and reported his findings in regular sessions to his colleagues. When fewer and fewer peers participated in his reporting sessions, his role was dissolved again. This example shows the fluidity of roles and the importance of the above stated peer commitment. Analogously to roles also the team composition may change. If the team realizes during iteration planning, that it needs new competencies or resources to solve the upcoming task, it will staff itself in a different manner and consequently, change itself organically (Leybourn, 2013).

3.2.2.4 Continuous learning

The characteristic of a learning organization can be derived from the incremental approach as well as role fluidity, covered in the prior subchapter. When approaching complex tasks incrementally, teams continuously self-reflect on their past course and direct their next actions respectively. This reflection and the group learning therof can either happen in small learning loops like daily planning meetings or in big learning loops such as institutionalized feedback sessions after every project cycle (Gloger & Häusling, 2011; Moran, 2015). For the emergence of a positive learning attitude, Armutat (2018) sees a culture of constructive criticism as decisive, where mistakes are considered as opportunities to learn. This is why agile organizations often establish team rules concerning freedom from sanction, neutrality of reviews or fast address of failures (Armutat, 2018).

Moreover, the prevalent role change in agile organizations lay the second foundation for the necessity of continuous learning. As new roles often call for new competencies, the individual team members seek to acquire these in order to fulfill their role (Weick & Berlinger, 1989). This drive for learning and exploration stems out of the employee's sense of ownership and the commitment towards peers. Schein (1971) describes this individual learning as follows: “As he faces new roles which bring new demands, it is from his repertoire of attributes and skills that he constructs and reconstructs himself to meet these demands" (p.267). The former explanations make clear, that learning in agile organizations happens at group as well as individual level. The prerequisite for this to happen is the individual's willingness to learn (Weick & Berlinger, 1989), which is generally assumed at this point and justified by the prevalent human image of an engaged and autonomous employee.

3.2.3 Structural characteristics

Due to the already mentioned fact, that culture often manifests itself in visible artefacts like the organization's structure (Schein, 2009), a rough deduction of structural characteristics out of cultural aspects can be taken at this point. Out of agile organizations‘ incremental approach the existence of co-existing structural layers and an interdisciplinary team composition can be derived. Decision making authority located directly in the self-organized teams and the predominant peer regulation facilitate a servant leadership conception and the dissolution of staff functions.

3.2.3.1 Co-existing layers

“There is no singular ,agile organization design'. Each organization must design itself to be appropriately agile in response to a unique set of external and internal forces.“ (Ambrose & Morello, 2004, p.6). This quote implies, that the homogeneity of organization structures is by definition excluded, because agility basically means the adaption to a constantly changing environment. Nevertheless, different authors in academic literature see similar structures as suitable for agile organizations. A common feature is the co-existence of two layers. In the following, two different thought streams shall be introduced, by which the duality inherent in agile organizations is demonstrated.

The first thought stream goes back to Kotter (2013), who claims that organizations, for being agile, need to go back in their development until the point where the organization was a “dual operation system“ (Kotter, 2012b, p.26). Hereby, it consists on the one side of a hierarchy with processes and on the other side of dynamic molecules of entrepreneurs. Armutat (2018) picks up this body of thought and labels these entrepreneurial units as secondary organization. This overlaps and complements the primary hierarchical organization situationally for the purpose of conducting projects or establishing networks and thereby allows for more flexibility. As positions and job titles determined in employment contracts belong to the still existent primary organization, the secondary organization can easily be adapted to changed environmental conditions without time-consuming contract changes (Armutat, 2018). This represents especially in the Germany-speaking area with its distinct labor law legislation a decisive advantage to employers. Figure 2 and 3 show the interpretation of agile structures by Kotter (2013) and Armutat (2018).

Figure 2: Kotter's (2013) dual operation system

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Figure 3: Armutat's (2018) secondary organization

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What does the co-existence of informal structures in addition to a line organization (Moran, 2015) mean for the employees? Cummings (2010) answers this question as follows: “In addition to the conventional management chain, individuals will be engaged in projects, task forces, or other initiatives that cut across traditional organizational boundaries, and they will have a leader and associated management chain appropriate to the particular initiative.“ (p.205).

Characterizing for the second thought stream is the inclusion of the two layers in a circular organization model. Leybourn (2013) postulates a simple form, where “the heart of [the] agile organization is the many small, cross-functional, empowered, and in some cases, self-organising teams. Each team should contain all the key skills required to deliver on their customers' requirements“ (p.82). While the inner circle can be seen as the machine room, the outer two circles support the delivery teams in their work and externally represent the organization and eventually protect it from its environment.

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Figure 4: Leybourn's (2013) circular organization design

Gloger and Häusling (2011) refine this perspective of a circular organization design by refering to all circles surrounding the self-organized development teams as “meta-organization“ (p.31). This meta-organization incorporates the existent job families and the management and therefore can be seen as resource pan. From there, the particular experts are assigned to the development teams in the middle of the organization. Hereby, they lose their hierarchical job title and simply become developer or team member. The managers of the meta-organization remain the individual's disciplinary leaders. Maximini (2018) labels the meta-organization as the “bench“ (p.12) where an employee is located, when his/her competencies are of no more use in the prior team, and from where he/she is recruited for new projects.

Independently of the first or second thought stream's perspective, one can recognize the existence of an additional structural layer, which arises and changes according to customer requirements. In this layer, employees can take up new or additional roles and can connect with individuals from other teams easily. Agile organizations, and especially the inner development teams, have an organic and cellular structure (Kasch, 2013). As this does not represent an organigram in a classical sense, Trost (2018) underlines the importance of transparency as to who is responsible for what e.g. through intranet, modifyable team walls, etc.

3.2.3.2 Interdisciplinary teams

The prior chapter made clear, that the teams are staffed from the primary organization and the meta-organization, respectively. The present chapter shall clarify in which way the teams are staffed and composed.

The team set-up is oriented towards the particular customer the team is working for. In order to meet the customer's product requirements and to solve the iteration task, all necessary competencies need to be represented within the development team (Doege & Thode, 2019). This implies, that the team consists of experts from various disciplines whose skills complement each other. Consequently, one can speak of an interdisciplinary or cross­functional team composition. According to their expertise, the team members take different roles within the team (Leybourn, 2013). While in hierarchical structures individuals with the same skills and the same profession represent one team and the different departments only meet at the top, in an agile setting “the lines converge at the lowest level, within teams“ (Laloux, 2014, p.77). The interdisciplinary team members work simultaneously on the product, which differentiates the functioning of agile teams again from the already mentioned waterfall model, where one part of the value chain is covered exclusively by one discipline (Gloger & Häusling, 2011). In the context of self-organization, the experiencing of one's own decision's consequences has been mentioned as one effect. The interdisciplinary team composition reinforces this “perceived self-efficacy“4 (Trost, 2018, p.92) as e.g. the marketing expert directly finds out how effective her campaign proposal can be used in the sales channels or the production specialists give feedback to their engineering team colleague during the planning process as to how workable his proposals are (Trost, 2018).

The necessity for interdisciplinary teams brings up the challenge of how the skill holders can be allocated appropriately within the organization. Hereby Leybourn (2013) introduces two methods. For one a central and transparent skill register, listing the professional qualifications of all organizational members, enables a self-organized team staffing. However this often is a very complex issue, therefore a resource management office can support the assignment of functional experts to development teams. In this context, the limited availability of resources may not be neglected. This leads to situations, in which teams are understaffed and therefore not capable of meeting all customer requirements or iteration tasks need to be postponed as specialists cannot dedicate the necessary time to the team at the moment (Leybourn, 2013).

3.2.3.3 Servant leadership

Leadership in agile organizations is splitted into disciplinary and professional leadership. While the disciplinary leadership role is located in the meta-organization and is responsible for individuals distributed among several development teams (Gloger & Häusling, 2011), the professional leadership role is located in the development team itself (Cummings, 2010). Furthermore, the meaning of leadership has changed: as self-organized teams are empowered with decision making authority, take responsibility for their work delivered and are controlled by their own peers (Moran, 2015), leadership in agile organizations cannot mean command and control. In contrast, leaders serve their teams whilst establishing and maintaining appropriate conditions for the team (Gloger & Häusling, 2011). The person in the servant leadership role ensures that not his own, but the team's needs are fulfilled (Greenleaf, 1977). “Hence, leaders in agile organizations are catalysts, who enable their team members by process competency, to apply their functional competency in an optimal way.“5 (Gloger & Häusling, 2011, p.25). Out of this citation, again the distribution of skills and roles within a team is recognizable.

What tasks does the leadership role incoporate in agile organizations when leaders solely accompany the interdisciplinary and self-organized teams as coaches, but have no decision making authority (Laloux, 2014)? Leadership tasks include removing obstacles like communication barriers, ensuring the transparency of information, observing the external environment for the need of adaptation and fostering collaboration and compliance to agile principles within the team. Furthermore, persons in an agile leadership role mentor team members whenever necessary, motivate them and ensure a facilitating team dynamic and culture (Armutat, 2018; Leybourn, 2016; Maximini, 2019; Moran, 2013). Schwaber (2007) denotes the role of management in agile organizations as parenting “to grow their people so that they are mature and self-managing“ (p.7).

When agile leaders have been working in a hierarchical setting before, the new understanding of their leadership role often comes across with a feeling of status loss and not everyone succeeds in retreating oneself from a power position and facilitating the team's self-regulation instead (Nowotny, 2018). Trost (2018) compares the structure of an agile organization with an inverted pyramid, where not the Chief executive Officer (CEO) is the star of the organization but its employees and where the complete set-up of the organization is aligned towards the support of the team's performance. The leadership role can either be taken by an employee recruited for this purpose and assigned to the particular team or by a member of the team itself. If more team members successively or simultaneously take over parts of the leadership role, one speaks of a shared leader approach (Tretter, 2015). Therefore, the Orpheus Chamber Orchestra represents a good example as here no conductor, but individual employees take the leadership role depending on the situation and hence the role rotation leads to more democracy within the orchestra (Heller, 2005).

3.2.3.4 Dissolved staff functions

In a hierarchical sense, line functions instantly contribute to the organization's value creation, while staff functions support them to reach their objectives. What happens to the staff functions when the organization now works according to the above stated premises? Especially the assumption of an autonomous employee is opposed to the instructions often imposed by staff functions. In academic literature, there are several different conceptions about the role staff functions play in an agile setting. In the following, the diverse perspectives shall be introduced. Due to the nature of the research question, the explanations focus mainly on the staff function of Human Resources (HR).

Leybourn (2013) takes the view that poor performance of HR represents a high risk for the team and sees the team as dependent on HR's support. The authors Doege and Thode (2019) as well as Kasch (2013) assume a lower degree of dependency and argue, that in agile organizations staff functions solely act as advisor. Based on the teams‘ needs, HR provides services so that it can work more efficiently, but does not make any provisions.

Armutat (2018) argues, that in the frame of an additional secondary network, engaged and creative employees shall be given the possibility to co-design personnel topics. Trost (2018) goes one step further by debating that in an agile understanding the specialist teams undertake personnel-relevant tasks on their own to the greatest possible extent. This implies that personnel tasks are split between the HR function and the development teams, with the result that HR is partly dissolved and in the end solely consists of an HR factory responsible for administrative topics and HR experts assisting in functional-complex affairs. The most radical perspective in this discussion about the role staff functions play in agile organizations is represented by Laloux (2014). He advocates that agile organizations [...] keep staff functions to an absolute bare minimum. They understand that the economies of scale and skill resulting from staff functions are often outweighted by the diseconomies of motivation produced. As a result, there are very, very few people working in staff functions in [agile] organizations. (p.71)

Through, for example rules of 80-20, where the team members spend 80% of the time acting in their primary role and spending the remaining 20% in task forces, covering former staff function's tasks, the team can handle these secondary obligations. Especially with HR-tasks, the team directly experiences the consequences of its own actions. This is why the team makes significant emotional investments in the recruitment of the best possible new colleagues. (Laloux, 2014). Analogously to prior hierarchical leaders, also representatives of former staff functions do not want to relinquish their position and power relating thereto. To satisfy their need of still making a valuable contribution, Maximini (2018) proposes, that they should enter the development teams as regular members.

As seen above, in academic literature there is no clear conception about the extent to which teams take over HR or staff tasks in general. One can argue that this can be derived back to different degrees of team maturity as well as to different manifestations of agility, the particular authors assume (Doege & Thode, 2019).

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Figure 5 provides an overview of the previously elaborated characteristics of agile organizations.

[...]


1 Critique on contingency theory: From a constructivist perspective it can be argued that organizations donot always act in such a reactive manner like contingency theory implies. As the members of an organization socially construct their reality, they also construct the organization's internal and external context factors on which they base their decisions. This implies that the organization's members are not dependent from non- influenceable factors but rather independently make decisions.

2 Original German citation: “Ein Führungs- und Organisationsverständnis manifestiert sich in den kulturellen und Strukturellen Rahmenbedingungen innerhalb eines Unternehmens oder eines Teilbereichs.“

3 Original German citation: „GEMO-Entscheidung [...]: Ist ein Handlungsergebnis ,good enough to move on‘, dann ist es ineffizient, an einer weiteren Optimierung zu arbeiten.“

4 Original German citation: „wahrgenommene Selbstwirksamkeit“.

5 Original Geran citation: „In diesem Sinne sind Führungskräfte in agilen Organisationen Katalysatoren, die es durch ihre Prozesskompetenz den Teammitgliedern ermöglichen, ihre Fachkompetenz optimal einzusetzen.“

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Details

Title
Career design in agile organizations
College
University of Innsbruck
Grade
1.0
Author
Year
2019
Pages
95
Catalog Number
V538500
ISBN (eBook)
9783346147639
ISBN (Book)
9783346147646
Language
English
Tags
agile organizations, HR, career design, explorative study, self-organization, qualitative interviews, boundaryless career, protean career, specialist career, organizational culture, organizational structure
Quote paper
Nadine Butzhammer (Author), 2019, Career design in agile organizations, Munich, GRIN Verlag, https://www.grin.com/document/538500

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