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Case study of family businesses and the unique 'implementation' of agile working

At Jester Strategy, we deal daily with the rapid changes of the external context in which we find ourselves. In our recent publications we just argue for it uncertainty to embrace. Something that again appears inevitable in the COVID-19 pandemic in which we still find ourselves. Fixed structures and patterns suddenly seem to be in jeopardy and successful companies are suddenly on the drip from the government. But even well before the pandemic, uncertainty in the external environment increased sharply. Managing this has received much more attention, especially at the beginning of this century. The rise of digitization in particular has made us collectively aware that matters that previously seemed to be a certainty can be seen in a completely different light as a result of (digital) innovations in a relatively short period of time.

The need for a flexible management model

The increasing uncertainty in the world has taught us that managing and managing organizations must be done differently. The environment in which organizations operate is dynamic, changes quickly and requires constant adjustment of strategies and the way in which these strategies are implemented. Flexibility and agility in the organization are crucial in order to be able to cope with this rapidly changing environment. At the beginning of the 21st century, it was the software companies that needed a dynamic management model in contrast to the more traditional methods of long-term management based on visions and ambitions. The ideas about an adaptive management method and flexible organizational structure were successfully implemented at leading companies in this relatively new sector. As early as 2001, the ideas about the management and the allocation of responsibilities were brought together and summarized in 12 elements known as the Agile Manifesto. These principles have become the guiding principles for almost all project management models devised in subsequent years. In a complex business environment where constant change and transformation is important for survival, applying these principles has proven to be the key to success. It offers a strategic advantage in the market in which the organization operates.

The organizational culture as a determining factor for agile working

Where an agile working method originated with software developers, because of the unusually rapid changes in a business sector at that time, other sectors in the business world have also embraced the principles of agile working. Agile working has penetrated the past few years not only within the business community, but also within the (local) government. Based on the agile philosophy, all kinds of methods have been designed to give practicality to agile working. Think of work processes that are organized LEAN or the SCRUM sessions that are organized at almost every organization. In recent years, much has been written and researched in the scientific literature into this 'new' way of working. Many organizational experts and scientists agree that the degree to which an organization is agile is not directly related to the application of agile methods such as SCRUM, LEAN or XP, but to the organizational culture of the organization in question. The fact that an agile organization (culture) does not directly have anything to do with the practical applications of the agile philosophy is shown by the fact that people know the principles of SCRUM better than the principles of agile itself. An interesting question that remains is how an agile organization (culture) can be recognized if it appears that the application of methods based on the agile philosophy is not a good indicator. For decades, research has been conducted into organizational cultures and, in recent years, also into agile organizational culture. From an analysis of the similarities between an agile organizational culture on the one hand and the 12 principles from the agile manifesto on the other, 8 characteristics or constructs have been defined that describe a successful agile organization (culture):

  1. Fast team-level decision-making processes
  2. Being open to continuous learning and improvement
  3. Autonomy and empowerment of employees
  4. A supportive and collective-oriented management
  5. A team-oriented approach
  6. Intensive, informal and personal way of communicating
  7. Open attitude to sharing and viewing information
  8. Being comfortable with and used to change and uncertainty

Recognition within the organizational culture of family businesses

In the autumn of 2020, Statistics Netherlands announced that family businesses account for a quarter of the turnover of all non-financial companies. The share of family businesses in the Dutch economy is therefore significant. They are also organizations that have existed on average longer than non-family businesses, and in addition, recent research shows that half of the most innovative organizations in Europe are family businesses. At Jester Strategy we have served several larger family businesses for years. Some time ago I conducted research at three family businesses in different sectors into the organizational culture and how it relates to the aforementioned characteristics of an agile organizational culture. It is striking that agile working in itself does not directly appeal to many family businesses. They will also not easily characterize themselves as an agile organization. However, when looking at the principles of agile thinking, this immediately evokes recognition as a logical and intuitive way of managing the organization. This is because there are great similarities between the unique organizational culture of family businesses and that of an agile organizational culture. The results of this research show that many of the aforementioned characteristics of an agile organizational culture are recognized in family businesses, but sometimes with a unique twist. For example, fast decision-making processes are very recognizable within these companies, but they do not take place at team but at management level. Working at team level is an important element in the organizational structure of the family businesses. However, empowerment and autonomy at team and team member level is very limited or completely missed. "We don't have democracy in this company" or "the guy makes the tent" are reactions when talking about shifting decision-making powers or responsibilities among teams or individuals in corporate layers under management. On the other hand, many of the characteristics mentioned are directly and very clearly reflected in the working methods and manifestations of family businesses. For example, these organizations are visibly open to change, continuous learning and improving processes. I have seen many great examples of how new laws and regulations or the implementation of new technologies are dealt with. In all these examples, entrepreneurship and practical insight are central and in many cases the immediate availability of financial resources makes a quick change of course possible. The involvement with each other is great in these organizations. This also applies to management, which has a feeling for what happens in the workplace based on an intrinsic motivation and is committed to taking employees and the company further. One of the most important observations is that there is an informal working atmosphere within these companies at all organizational levels.

What can we learn from this?

The case study on the organizational culture of family businesses confirms that an organizational culture contributes more to strategic flexibility in the organization than the implementation of methods that are (partly) based on the principles of agile thinking. Strategic flexibility is extremely important to be resilient in this rapidly changing and uncertain world. To the question of how you achieve this as an organization, the most important answer is not to immediately start implementing an (agile) method, but to first consider what prevents your organization from strategic flexibility. And don't forget: embrace uncertainty! Continuously focus your organization on the opportunities and threats that a rapidly changing business context offers. This gives the opportunity to distinguish yourself as a (family) company or organization in the market.

Questions about this article? Please contact Ben Kok (b.kok@jester.nl, 06 15 66 48 39)

Ready for the future

Every year, Jester Strategy supports dozens of organizations, including family businesses, in developing a new strategy. Based on our experience, we have developed our own unique method for strategy formation: the Strategy CUBE. Strategy is complex, the Strategy CUBE makes complexity manageable and offers good tools for arriving at a supported strategy for the organization. In January 2021 our book will be Ready for the future! came out, in which we describe the method of the Strategy CUBE step by step. Our book is for sale at Managementboek.nl