Agile Organizational Structures

00:08 The agile organizational structure is an excellent example of a new organizational structure developed in response to the world's constant change.

00:17 What exactly is agility, and why is it different? That is what we shall discuss in the next minutes.

00:24 I'd want to start with how decisions are made.

00:27 The hierarchy is absolutely rational; you're certainly aware of it.

00:31 The CEO is at the top, followed by managers and so on, department managers, executives, and decisions are taken as far up as feasible.

00:41 Employees are the ones who have the expertise and abilities and are in direct contact with the customer.

00:47 However, decisions are not made there.

00:50 This is not the case with an agile organization.

00:53 Individual teams exist here; the firm management imposes values, a direction, a vision, and a mission, while the individual teams are close to the consumer and can make decisions. That is, ability meets decision.

01:07 That is the main difference.

01:09 However, it is only the beginning.

01:12 Agility involves far more.

01:15 The agile manifesto serves as the framework for this evolution.

01:19 The agile manifesto was presented in Utah, United States, in 2001.

01:25 Originally intended for software development, it went on to rule the world, and its four guiding principles remain relevant today.

01:34 Individuals and interactions always take precedence over processes and instruments, according to principle number one.

01:41 Second, functional goods take precedence over lengthy documentation.

01:48 The third principle states that cooperation with the client takes precedence over contract discussions, while the fourth principle states that adjusting to changes takes precedence over precisely adhering to a plan.

02:02 That is why there are cultural differences between hierarchical and agile organizational types. There are huge cultural contrasts between hierarchy and agility.

02:13 Hierarchy is about power, position, strength, and hero worship; you value the accomplishments of others.

02:20 It is all about structure, order, and procedures.

02:23 This is very different from agility.

02:27 It's about trying new things and approaching them.

02:30 The emphasis is on the customer; the outcome is important.

02:34 There is some self-determination, and everyone is cooperating.

02:38 The fairness principle is applied, and as you can see, those are two worlds.

02:43 That would be a good comparison if one party believes in religion and the other does not.

02:47 I believe that combining both will fail - what do you think? I hope you have a chance to consider my final question.

02:55 Perhaps you have an answer in black and white.

02:59 However, we can all agree that the world is sometimes gray, and when we look at the markets, we can see that if we have dynamic, constantly changing markets, then agility is the obvious choice.

03:10 In locally saturated marketplaces, however, you can very well continue with hierarchy.

03:15 There are also companies in Germany that perform both, such as the Deutsche Bahn, a railway business.

03:22 A railway infrastructure is handled in a hierarchical manner - an IT business that develops products for the parent corporation is entirely agile.

03:31 And you can see here that the world can be this way or that way, or it might be grey.