The Relationship of Agile and Corporate Culture

It’s important to understand the relationship of Agile and corporate culture. Adapting an Agile development process to a corporate culture can be a very difficult thing to do because changing a well-established corporate culture is not easy. If you ignore this problem and implement an Agile development process without attempting to integrate it with the overall business environment that it is part of, it’s not likely to be totally effective. The predominant thinking seems to be that you have to force the whole company to be Agile in order to adapt it to an Agile development process; I don’t believe that is the best solution in many cases. A company’s culture should be designed and optimized around the business and markets that company operates in.

One of my favorite books on this subject is “The Discipline of Market Leaders” by Treacy and Wierzema. It identifies three primary “value disciplines”

  1. Operational Excellence – Companies who focus on operational excellence succeed or fail by offering products and services more efficiently than their competitors can offer them. McDonald’s and Walmart are examples of companies whose primary value discipline is operational excellence. They do the same thing repeatedly at a low cost; that is what “operational excellence” is and it is reflected in their culture.
  2. Product Leadership – Companies who focus on product leadership succeed or fail primarily by innovating products to meet market needs faster and better than their competitors. Apple and Samsung are examples of companies whose primary value discipline is product leadership. Constant innovation is very important to these companies and they might be dominated by engineers who wear jeans and sweatshirts to work.
  3. Customer Intimacy – Companies who focus on customer intimacy succeed or fail primarily by providing a high level of personalized service to their customers relative to other competitors. Ritz Carlton Hotels is an example of a company who is driven by a culture of customer intimacy – their employees are trained that customer needs and customer service always come first and their processes need to be flexible to adapt to customer needs.

The idea of value disciplines is that a company can’t be deficient in any of the three areas; however, no company can be all things to all people and the company needs to choose one value discipline as the primary area of focus to excel in. The value discipline that is chosen as the primary competitive differentiator tends to define the whole company and its culture and values.

How do these value disciplines align with an Agile development approach? Obviously, the Product Leadership discipline has a very strong alignment. Companies who are in a business that demands Product Leadership as a critical success factor will have little difficulty in adapting to an Agile development approach because there is a natural alignment with the primary success factors in their business. Operational Excellence is probably the one that is most difficult to align an Agile Development approach with. In these companies, there are several alternatives:

  1. Ignore the misalignment and just implement Agile as a development process without attempting to align it with the business. That’s not likely to deliver optimum results, in my opinion.
  2. Attempt to force the company to change its culture to be more Agile. That may not be successful either and also may not be the best solution for the company’s business
  3. Develop an “Adaptation Layer” between the Agile development approach and the company’s business environment. This approach is probably the most practical and most likely to be successful in many cases. It might consist of putting a thin plan-driven “wrapper” around an Agile development approach to integrate it with the company’s business.

My Agile Project Management Training provides more details on this approach and provides some case studies of companies who have taken different approaches for solving this problem.

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