Strategy Development and Controlling in the Working World 4.0: Stay agile!

Friday, 25. May 2018

A guest article by Dominic Lindner

The working world today poses new demands for organizations – for example, customers’ demands have become much more complex within the last few years. Customers also expect them to be managed 24/7. In order to meet those demands, a great deal of organizations are creating agile working environments and allow their teams for more autonomous decisions.

For years and years managers were required to track the efficiency of projects and employees by means of KPIs and bulky excel sheets. So it happened that a huge amount of time was invested into creating reports and analyses for executives. However, this kind of controlling is to a large extend not conducive any more – as a consequence, managers as well as controllers need to rethink. But what recommendations are there for managers, who need to give their teams the needed freedom within agile working environments and simultaneously want to stay in charge?

Agile Management Based on Visions

agility grIn an agile working environment, managers are advised to work on the basis of visions in the first place. This means that they are to map an attractive vision as food for thought. An example: We want to coin the automotive industry with high-quality consulting or We want to create tomorrow’s IT landscape with passion. Vision number one could be the vision of a consulting company, while vision number two could be representing an IT service provider. Now it’s up to you as a manager to bring life to this vision by exemplifying it and thus to inspire employees to fill it with life. Of course you will have to listen to those who say that your vision isn’t very precise and some employees will not know what to do with it. It’s important that you hang in there and constantly supply employees with ideas and motivation so they will set practical goals in their daily work according to this vision.

Agile Controlling with OKRs

As a next step, you should also monitor and track this vision – this is, so to say, understand how it is implemented. How to capture a vision by means of figures and boards, however? One approach are Objective and Key Results (OKRs) – I believe that those OKRs are a modified version of Peter Drucker’s “Management by Objectives”. The idea behind this method is that you have to break down your vision to concrete goals in a first step and to allocate key events to them. In order to reach the required commitment within the teams, you should negotiate those goals individually. What is important is: You set a goal, which is quite unlikely to be reached, and just measure the degree to which it is reached actually. So there won’t be any penalty if the team doesn’t reach the goal. Instead you visualize what they have reached already.

Example of the Implementation in Autonomous Teams

How to implement OKRs has only been described in a quite abstract way and therefore isn’t feasible, yet – to make it more clear, I made up an imaginary consulting company in the following drawing. The company is focused on consulting in the automotive industry and has got a human resources team as well as a management consulting team and an IT consulting team. In this example, the general management decided to “coin” the automotive industry. Goals were negotiated with the three teams. For example, HR is to employ the best consultants. For this purpose, key events like contracting a senior consultant as well as developing present consultants are pursued.
graphics EN web

Sprinting towards Key Events

Schluessel grIt is important to know that key events don’t necessarily have to be reached. Instead, everyone should commit themselves to reach them the best possible way. This resembles sprints in scrum. Although goals don’t have to be reached, the team will get rewarded for what they reached and the estimation for the following year will be adjusted. OKRs are about visualizing target achievement. Thus, teams stay permanently motivated and you are able to establish a kind of controlling.

I hope that in this article, I was able to give you an impulse for agile strategy development including controlling. I’m sure you are already using some elements it contains and recommend regarding my article as a supplement for your next strategy development steps.

About the author

Dominic Lindner grMSc. Dominic Lindner is a post graduate at the Institute for IT Management (WI3) at the University of Erlangen-Nuremberg and also works as a agile coach for an IT company in the metropolitan area Nuremberg. His main subject of research is leadership and work in SMEs in the context of digitalization. He updates his blog regularly with summaries of his latest research results: