SMEs want agile culture - but holistic implementation is missing

Agility is one of the key prerequisites for successful change in the course of digital transformation, which challenges SMEs to renew proven structures and functions. With a value contribution of more than 15 percent to success, the participants in the study attribute a high degree of effectiveness to culture and leadership in this context.

First, the agile culture...

Against this background, the study questioned the "maturity level" of agility in the companies in various areas. While 49 percent of the participants describe their corporate culture as agile, only 11 and 12 percent, respectively, of the areas of leadership and human resources (HR) are classified as agile. This shows that there is no holistic approach that aims to anchor agility through the synergies of culture, leadership and HR. This would contribute significantly to a long-term agile mindset. The introduction of "holistic agility" requires an agile culture, followed by leadership development and the introduction of new HR approaches.

The development of an agile culture is the starting point and at the same time the supreme discipline for the transformation to an agile company. Consequently, the motto of the CEOs surveyed is "Culture First". Every second participant describes their corporate culture as "rather agile". Building on a culture of trust, these companies have a suitable learning and error culture, combined with pronounced self-organization and collaboration. Companies with a more agile culture also design their strategic management much more agilely and achieve significantly higher values for agile leadership, agile organization and agile HR. Culture is obviously the starting point for the other fields of action of holistic agility.

Agility is primarily a "mindset shift" 

There is agreement on this view, as well as on the fact that the necessary cultural change toward agility is primarily a "matter for the boss". Customer orientation, entrepreneurship, adaptability, innovation, willingness to learn and teamwork are named as important cultural values in this context.

The CEOs of companies with a more agile culture stated more frequently that they involve all (hierarchical) levels in the change process. Companies without an agile culture follow the traditional path of culture development, i.e., in collaboration with HR and largely without involving employees.

HR remains "outside the box

Although agility requires a change in behavior, HR, as the area responsible for providing and developing employees, is only involved to a limited extent. In particular, strategic HR and its potential as a "change agent" is not utilized in the transformation. Even among the companies classifying themselves as "rather agile," just under half (49%) are of the opinion that HR does not generate any added value for long-term corporate success.

On the one hand, the CEOs emphasize the importance of HR initiatives such as new working time models (43%) or employer branding (43%), but the focus is on activities that are easier to implement, such as personnel changes among managers (60%) and the introduction of innovation and culture initiatives (60% / 54%). Overall, the measures are not focused enough on mindset shift. "Painful interventions" such as demoting or dismissing executives without a digital mindset (21%) or adjusting KPIs and bonus system (33%) are still rather avoided.

Start-ups demonstrate agile culture

Among the measures implemented, the establishment of networks and cooperation with startups stands out positively at 58 percent. Apparently, both sides - Grown Up and Start Up SMEs - recognize the potential in the entrepreneurial and human intergenerational exchange. Promoting dialog between the generations of companies and entrepreneurs was also one of the intentions of this study, which was aimed at Grown Up and Start Up SMEs.

Holistic to Mindset Shift

As the study shows, the participating companies are aware of the high relevance of agility for success in the context of digital transformation. What is missing is a holistic approach for a sustainable shift to an agile mindset and an employee base that collaborates in self-organized, internally and externally networked teams and works together to achieve the company's goals. The following steps are recommended for this:

1. Culture development: embedding a culture based on trust, teamwork, development and learning so that everyone's strengths can be leveraged to best benefit the organization.
2. Leadership transformation: developing a leadership culture that inspires people, imparts meaning, develops competencies, and encourages teams to collaborate independently.
3. New HR approaches: Developing new HR approaches/programs such as introducing flexwork, holistic talent development, ensuring each employee is employable.

Source and further information: Futurum Management