Introduction
The company’s efficiency greatly depends on the management style. Traditionally, the majority of companies are still practicing hierarchical style of management. However, this management model has many drawbacks and limitations. Thus, the managers have to search new solutions. One of them is the Agile business model.
Selected organizational Context
KEO International Consultants (KEO) is an independent, multi-disciplinary practice that has been providing building and infrastructure project and construction management and design consultancy services since the firm was established in 1964. For over fifty years KEO has been delivering multi-faceted consultancy solutions to a wide array of public and private sector clients in 25 countries. Employing over 5,500 dedicated professionals within offices in 12 locations, KEO’s blend of design innovation, technical aptitude, sustainability principles and local knowledge has enabled the highest levels of client confidence and industry respect.
KEO’s reputation is established as one of the most respected and reliable consultants in the region. The idea of KEO was to uniquely be a total service provider to clients as a one-stop consultancy or stand-alone provider of a range of specialized consulting services. Whatever the specific need, the response to each project challenge with flexibility, ingenuity and integrity.
Description of the problem
However internally KEO was experiencing some difficulties. The traditional top down hierarchical organization and the lack of strong organizational culture was not doing any favors to the company. The company comprising of 5 divisions that were hardly talking to each other. As a result of that some services in portfolios were duplicated and potential and existing clients were confused about the points of contact in the company and responsibility matrix. The rivalry and conflicting of divisions leaders wasn’t benefiting public image and productivity of company at all.
The staffing in our Middle Eastern offices was quite diverse, however in ‘best traditions’ of the region the PayScale’s were based on nationality. That led to the formation of subcultures in the office, people were getting into groups based on their nationalities and groups were acting against each other. The situation among directors was also unhealthy as the message form the top management was ‘ we do not glorify anyone in our company, there are not irreplaceable people .I consider this a totally discredited tactics as people is one and only strategic asset of any consultancy business.
Analysis of our company’s efficiency has shown that, in order to improve the efficiency, it is necessary to transform the ordinary hierarchical company into the agile model according to the basic statements of motivation theory. The company was located at the Middle East. Thus, there was a precise pay scale for people of different ethnic and national background. According to the theory of motivation and other theories of management, this management technique has a negative influence on the employees’ motivation.
An operational decision
So at the time the structure of the company was quite a traditional pyramid, at the bottom of which people that are actually delivering services to the Clients. At the top was a small group of people that were in charge for the overall success . they were doing their job , thinking that the driver of success its them being in control, making tough decisions and reinforcing the policies. To manage all the work we needed to transform the traditional Middle-Eastern business model into innovational Western Agile business model. To do this, we had to reform the company’s activities in the following way according to the basic principles of Agile management:
-all the project participants are working together, including the client;
-management can be adjusted according to the employees; needs and wishes;
-the team, the manager and the client are constantly cooperating in order to avoid loss of the information and misunderstanding or the goals;
-the principle of transparency that helps to solve the problems immediately and to find efficient solutions;
The basic principles of Agile model contribute to the company’s sustainable development in spite of external negative impact of local social, political or economical situation. So, it was decided to practically implement these principles.
Solution of the problem
First, we leveled up all the pay scales. This policy had a positive impact on the motivation of all employees. In simple words, up to the end of this transformation, it didn’t even matter what kind of passport the employee had, a Philippine passport or an Indian one, because all the employees have the similar pay scale. There was an equal approach to all members of the staff.
Also, we decide to introduce a clear and just system of bonuses. For some initiatives in the work area, the staff received bonuses. According to the motivation theory, additional material stimulation has a huge positive impact on the staff’s willingness and readiness o work. Thus, motivation of the staff has increased a lot. Moreover, during the transformation all the levels of salary were adjusted because first we tried to satisfy the staff’s basic needs, according to the theory of Maslow. It had an immediate positive effect on the staff’s motivation to self-development and self-actualization.
We started to provide cost advice on all aspects of the project, including mechanical, electrical and specialist services and sustainability costs from the early feasibility stages of a project through to its completion.
In order to provide QS services, we used both pre-contract and post-contract, KEO CQS have employed professional QS’s at various levels, as required for various duties and to meet demands. Such staff was recruited worldwide from different nationalities and sources. The work structure of KEO-CQS was that senior QS’s manage the department in each country. All of our senior staff was chartered at MRICS. The managing Quantity Surveyor for each location reported to the Vice President of the CQS group.
In addition to that efficient structure we had the benefit of being part of a multidisciplinary consultancy. This provided KEO CQS with the advantage of being able to draw upon the knowledge of the various disciplines that form KEO, to provide more accurate estimates than other consultancies.
In order to stand out more out of our competition row and provide excellent services to our new and existing clients we have adopted a new program for Quality Assurance and Control. The QAQC program promotes a culture of quality in all phases of the process. The program is designed to promote the pursuit of quality by everyone on the project with the goal of ensuring a quality product to the client. The overall intention of the QAQC program is to be proactive by preventing negative issues instead of being reactive and correcting negative issues.
Thus, we tried to organize our work according to the theoretical background, and this theoretically-oriented approach helped the company to get rid of the most vital problems and to carry out optimization of all business activities.
Furthermore, we decided to improve the activity of our company from the technological point of view. In an era where budgets often drive project development, for the developer/owner to be able to monitor costs as the design progresses is crucial and allows for actions and decisions to be made accordingly.
CQS has been behind the push to use Building Information Modelling, with the massive merits of having quantities directly from a model rather than calculating. We moved to use Revit / BIM, especially in Qatar, therefore we have employed BIM candidates to assist the QS team. We have attended seminars, presentation and interviews with software provider, Causeway, who supply CATO software used by CQS and other big QS practices. With the push and involvement of CQS with BIM approach, there was continuous integration with Causeway representatives.
Causeway have used CQS as a reference when they demonstrated their software to Qatar Government.
Moreover, I personally too had some vital “lessons learnt” from this entire experience which have helped me grow as a leader. Foremost amongst these was the importance of keeping your team motivated through effective communication. Secondly, I learnt how important it is to be led by example. I was able to quickly gain the respect of my team members because I took on the initiative myself, and was leading it despite sceptic opinion of some members of our Corporate business Development team.
Operational costs and benefits to arrive at a decision
Implementation of the Agile model was surely connected with some operational costs. We needed to reform the company’s scheme of management, to change the system of salaries and to improve the system of additional financial motivation for the staff. Moreover, we needed to acquaint the staff with the benefits of Agile system. To o all this, human and financial resources are necessary.
However, while estimating operational costs, we came to the decision that restructuration of the company according to the Agile business model is worth doing, because implementation of the Agile model has the following benefits:
-the stress level of the staff is significantly decreasing;
-the staff’s motivation improves;
-relations between the staff and the managers become closer and more efficient.
So, in spite of all the operational costs, we decided to implement the Agile model in our company.
Part 2
Agile business model: brief reference
The Agile business model is the model of staff and project management that can be implemented in any company or enterprise. It has some differences from the traditional hierarchical pyramid that is still being used in the majority of companies. The benefits of Agile business model are based on the differences of Agile environment from lean environment. One can mention the following differences:
-Agile environment is connected with the higher level of personal and collective responsibility;
-the staff in agile environment are able to deviate from standard procedures to allow for customizable options;
-the staff are able to use skills and creativity to complete tasks to correct quality;
-there is an opportunity of quickly response to changes;
-Agile environment provides an opportunity for self-organization.
These are key differences of Agile environment from lean environment. Thus, Agile environment can contribute to efficient work of the staff.
Evaluating the implications of Part 1 decision using theory and empirical evidence
According to the Agile business model, the staff must have a strong feeling of belonging to the company because it has a positive influence on their work and motivation. Thus, we tried to make the staff feel that our company is lie a big friendly family that differs a lot from the others. To do this, we constantly promoted among the staff the difference of our company from other ones. Correctness of this policy can be confirmed by the theory of Social Identity (Taifel, 1978). According to this theory, the person is always trying to identify himself with a certain group and, also, to separate this group from the others because social identity is largely composed of self descriptions which derive from the characteristics that we believe define the social groups to which we belong.[1] In the context of Agile implementation, it is important that participation in contemporary corporate life frequently entails psychological changes in people’s concept of themselves and others. “Indeed, many contemporary approaches to management presume that people working together will come to identify with each other and their larger organization”[2].
Also, we based our work on the theory of psychological contracts[3]. According to this theory, the level of the staff’s efforts depends on the value of rewards and the degree of sureness that these efforts will be really followed by the award. Achieved results can cause internal rewards (satisfaction with the work done)and external rewards (bonuses and the manager’s praise). To do this, we reformed the system of bonuses and pay scale in order to make the staff feel that everybody gets an equal reward proportional to real efforts. According to this theory, it is really important to employ outstanding specialists and experts at work. Organizations hire professional employees to apply their expertise to problems that have fundamental uncertainty, especially when it is really difficult to formulate these problems. However, in this case the problem arises that can be solved by means of Agile methodology. The problem sounds the following way: “…decisions about quality and pace are ultimately under the control of professional and not the employer”[4]. The Agile methodology suggests equal participation of the manager and the staff, including experts, in the process of work, so Agile approach helps to eliminate this problem and to get maximal profit from the experts at work.
While elaborating the company’s new values, we paid great attention at the promotion of mutual trust between key participants of the work: the manager, the staff and the client. To do this, we had to make all our activities, transparent and easy to trace. It was possible due to the introduction of flexible control system. Also, we tried to develop the spirit of collectivism based on agreeable group thinking. It was possible by means of regular collective meetings in order to solve the conflicts and problems immediately, because ”Without trust, task conflict can be misinterpreted as relationship conflict[5]”.
The concept of justice towards all the staff members also has a crucial importance in Agile methodology, that’s why we had to introduce a new pay-scale and to reform the work of managers. In traditional companies, “managerial distancing is one strategy that managers employ as a way of psychologically and physically removing themselves from a social predicament”[6]. In Agile methodology, vice versa, the managers should be closely related with the environment at work and with the staff, in order to improve performance of the staff and to increase the level of clients’ satisfaction.
Moreover, we based our version of Agile business model of an actor-focused model of justice rule adherence and violation by Scott and Paddock. According to this model, managers adhere to and violate justice rules in an attempt to control their subordinates’ behaviors. More specifically, “both justice rule adherence and justice rule violation may be used instrumentally by managers to elicit desired levels of motivation and performance from their subordinates”[7]. If the managers adhere justice rules, the staff will also adhere them, thus we decided to pay great attention at the promotion of justice rules among the managers of all ranks.
We also tried to improve performance management that is, “a continuous process of identifying, measuring, and developing the performance of individuals and teams and aligning performance with the strategic goals of the organization”.[8] In order to improve performance management, we based all the company’s activities on the SMART concept, by establishing the following aims and goals:
-specific for the department and the staff member;
-measurable (thus, we elaborated new criteria of efficiency);
-achievable;
-relevant (they must correspond to the current situation and changeable according to the changes of the background);
-time-based (they must be established inside of precise time-frames and deadlines).
This concept makes work of the staff less stressful and more efficient.
Potential problems during the implementation of Agile model and possible solutions
The first problem is that, when a company works in Agile environment, it is impossible to predict every detail In advance. In order to solve this problem, instead of advanced planning the manager must launch the first wave of Agile teams and then analyze their work, in order to make the next step. It helps to estimate efficiency of the teams (considering financial expenses and the staff’s work results) and losses (financial investments and organizational problems).
Another important problem is connected with the fact that, in order to reform a classical hierarchical pyramid into Agile business model, global changes should be introduced. Thus, the staff must be completely devoted to the leaders; also, talented and experienced agile experts are needed. Moreover, one should be aware of possible risks and to have the plans of emergency actions.
Possible solution is the re-organization of the company step by step, introducing several new Agile teams once in a month. Then, in spite of slow speed of changes, the results of Agile implementation will appear quite quickly (although, in order to get some financial results, it is necessary to wait some time).
Conclusion: practical recommendations for management the Agile business
Work with above-mentioned practical case and the study of theoretical literature related to the problem helped me to work out some recommendations how to use Agile business model and to adapt it according to the company’s specific features. Thus, the following advice can be given to the managers who are willing to use Agile business model:
First, the company’s employees needs a consistent treatment. The manager should be consistent and should organize the work according to the system and stable management principles that can not be changed often. It is interesting that “being treated consistently unfairly can be better for employees than being treated fairly sometimes and unfairly at other times (i.e. variably)”.[9]
Second, while estimating the results of Agile implementation, the manager must use some important criteria that are mentioned below. The implementation of Agile methodology is considered to be successful, if:
-the basic business opportunities are in the center of attention;
-the staff members are responsible for exact results;
-the staff are oriented on independent work, guided by certain rights for decision-making;
-the staff are provided with resources and multi-profile experts;
-the company is working according to methodology principles;
-the company is oriented at close partnership with the clients;
-the staff are able to quickly create prototypes and to give feedback;
-the staff are oriented at the support of senior managers that stimulate the company’s work.
According to above-mentioned check list, one can check if the company is really implementing Agile methodology.
Third, if the company is eager to develop according to Agile methodology, it is important to employ competent specialists and to encourage them. Moreover, it is important to promote the value of mutual trust and common responsibility for the results. To do this, it is necessary to reform the work of HR department first.
Fourth, while employing the staff member, the manager should estimate both his personal qualities and his desire and ability to work in the Agile team. In order to estimate staff members according to these criteria, one can use flexible systems that are changing every year and provide feedback. Also, coaching is useful in order to practice general skills and to consider the needs of every separate staff member. People that have vision of the concept and result of Agile teams can achieve a lot in the company.
Finally, we must say that, for traditional hierarchical companies, annual distribution of the budget is normal. However, if the company is using Agile methodology, such approach will not be efficient. Clients are often changing and financing of new projects can be necessary any moment. At the same time, inefficient projects can “burn out” all the budget and innovative ideas can be transferred to the next budget cycle. Thus, in Agile companies with a flexible system of management, financial experts state that the concept of many projects is changing during the development cycle.
Companies that have implemented Agile methodology successfully state that now their business is reacting quicker at the market changes, they are able to develop more adaptive solutions and better predict the clients’ needs. When the problems’ solution is not ready yet, ambitions and a global vision of the process will help the company to move forward.
[1] Saul McLeod. Social Identity Theory. https://www.simplypsychology.org/social-identity-theory.html Accessed on February 26, 2020.
[2] Denise M. Rousseau. Why workers still identify with organizations. Journa of organizational behavior, volume 19, 217 – 233 (1998).
[3] Coyle-Shapiro, Jacqueline A-M. and Parzefall, M. (2008) Psychological contracts. In: Cooper, Cary
- and Barling, Julian, (eds.) The SAGE handbook of organizational behavior. SAGE Publications,
London, UK, pp. 17-34.
[4] J. Stuart Bunderson. How work ideologies shape the psychological contrasts of professional employees: doctor’s responses to perceived breach. Journal of organizational behavior, 22, 717 – 741 (2001).
[5] Simons & Peterson, 2000
[6] Jacqueline A. – M. Coyle-Shapiro. Justice in the 21-st century organization.
[7] Brent A. Scott, Jason A. Colquitt. An actor-focused model of justice rule adherence and violation: the role of managerial motives and discretion. Singapore Management University. P. 759.
[8] Aquinis et al., 2009, p 2
[9] Dr. Rashi Dhensa-Kahlon. Managing the Agile business. Surrey Business School. University of Surrey.