MSc Thesis
Hard and Soft Aspects of Change:
Implications of Different Narratives among Organizational Groups During Implementation of an Organization-wide Change
Lieke (L.A.) Meewisse (S2560186)
MSc Business Administration – Change Management Faculty of Economics and Business
University of Groningen Groningen, July 2018
Supervisor: Dr. C. Reezigt Co-assessor: Dr. M.L. Hage
Word count: 13.852
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ABSTRACT
The importance of soft working methodologies in organizations is increasingly emphasized in recent literature. However, many change initiatives of organizations towards a more soft approach fail. This paper studied the implementation of an organization-wide change towards a soft methodology, an agile way of working, at a large financial institution. To uncover narratives among organizational members, 36 interviews were carried out. This resulted in a rich dataset, which was analysed using software program ATLAS.ti. Subsequently, composite narratives of various organizational groups were constructed. Differences between those composite narratives were described, based on the concepts of hard and soft. Concluding, organizational groups socially construct reality in different ways. Besides, implications of these different narratives were analysed using the change grid concept, value alignment, and sensemaking cycle. These implications led to valuable insights regarding change readiness, change acceptance, and the process of sensegiving and sensemaking. Most strikingly, the organization does not seem to recognize the existence of multiple socially constructed realities, leading to hindrance of the transition process.
Keywords: Organization-wide Change, Hard Aspects of Change, Soft Aspects of Change, Agile Way of Working, Narratives, Sensemaking, Change Grid, Value Alignment.
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TABLE OF CONTENT
INTRODUCTION ... 4
LITERATURE REVIEW ... 5
The transition to an agile way of working ... 6
The concept of narratives in organizational research ... 7
METHODOLOGY ... 8
Case site selection ... 8
Research approach ... 9
Data collection ... 9
Data analysis... 10
RESULTS ... 13
Group classification ... 13
View on change ... 14
Organizational culture and atmosphere ... 19
Way of working ... 22
Management role ... 25
Composite narratives ... 28
DISCUSSION ... 31
Readiness for change ... 31
Value alignment ... 33
Sensemaking ... 35
Managerial Implications ... 35
Theoretical Implications ... 36
Limitations and Future Research ... 37
CONCLUSION ... 37
REFERENCES ... 39
APPENDIX B: INTERVIEW PROTOCOL ... 43
APPENDIX C: CODEBOOK ... 44
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INTRODUCTION
The so-called hard and soft aspects in project and program management are widely discussed in today’s literature (Crawford and Pollack, 2004; Karrbom Gustavsson and Hallin, 2014; Pollack, 2007).
Back in the 1980s, Peters and Waterman (1982) made an important statement about the well-known McKinsey 7S framework, which they also partly developed. They pointed out that the four soft S’s (staff, style, shared values, and skills), opposed to the three hard S’s (strategy, structure, and systems), were essential for business success. Later on, many researchers emphasized the importance of soft aspects to successfully carry out change across different industries (Ali and Kidd, 2014; Jafaari, 2001;
Wateridge, 1999; Williams and Hillson, 2001). Hard and soft are broad terms which have been applied to all kinds of projects, systems, approaches, and models. According to Crawford and Pollack (2004), objective scientific approaches can be seen as hard, whereas subjective social approaches can be seen as soft. Liu, Chen, Chen, and Sheu (2011) link the soft aspect to the ‘human-side’ of project management. Söderlund and Maylor (2012) seem to agree with this by stating that soft skills are needed to handle human factors. Besides, they relate ‘management’ to the hard aspect and ‘leadership’ to the soft aspect. Moreover, Daniel (1990) identifies simple projects with unitary objectives as hard, and complex projects with plural objectives as soft. All these associations with hard and soft may cause the understanding of the two terms to be inconsistent and ambiguous. Therefore, it is important to note that there (indeed) does not exist a clear boundary between hard and soft, and that they are two opposites on a continuum (Crawford and Pollack, 2007; Karrbom Gustavsson and Hallin, 2014). According to Pollack (2007, p.267), hard and soft can be referred to as “two distinct paradigms, each of which involves particular values, ways of viewing the world and approaches to practice”. The hard paradigm emphasizes positivist and realist theories, and is practically focused on problem solving. On the other hand, the soft paradigm emphasizes interpretivist theories and is practically focused on problem structuring (Pollack, 2007).
Even though the importance of soft aspects is clear, organizations still experience trouble with successfully implementing change. Burnes and Jackson (2011, p.158) argue that “a lack of alignment between the value system of the change intervention and of those members of an organization undergoing the change” may play a significant role in this case. Therefore, they state that organizations should ensure alignment between values of employees, objective of change, and the change approach (Burnes and Jackson, 2011).
A recent trend in organizations is the agile way of working. Agile finds its roots in the software industry, but is popular among all kinds of organizations nowadays (Karrbom Gustavsson and Hallin, 2014). In 2001, the Agile Manifesto was written by seventeen independent-minded software practitioners. They found consensus in four central values: “(1) individuals and interactions over processes and tools, (2) working software over comprehensive documentation, (3) customer collaboration over contract negotiation, and (4) responding to change over following a plan” (Agile
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Alliance, 2001, p.1). This does not imply agile does not value the right parts of the statements, it only values the left (bold) parts more (Agile Alliance, 2001). With involvement of people, collaboration, and high adaptability to changes at any point during the process (Dingsøyr, Nerur, Balijepally, and Moe, 2012), agile methods are in line with the soft paradigm (Karrbom Gustavsson and Hallin, 2014).
This study investigates how an organization currently implements a change from hard to soft methods, specifically an agile way of working. Thereby, it is assumed that organizations undergoing such a change also shift in their general way of thinking, from a hard to a soft paradigm. This research will include both aspects of change, those associated with the hard paradigm, as well as those associated with the soft paradigm. To understand the unfolding of a complex organizational change process, narratives have appeared to be remarkably useful (Buchanan and Dawson, 2007). Individual narratives are stories in minds of individuals that explain their thoughts, emotions and behaviour regarding to certain events (Bruner, 1991). These individual narratives can influence the organization as a social system, and vice versa. Therefore, organizational narratives are defined as “temporal, discursive constructions that provide a means for individual, social, and organizational sensemaking and sensegiving” (Vaara, Sonenshein, and Boje, 2016, p.496). Because of the subjective nature of narratives (Vaara et al., 2016), grounded theory research (an exploratory research approach) is carried out to uncover narratives among organizational members during change. This leads to the following research question: “How do narratives of various organizational groups during implementation of an organization-wide change differ, and how do these narratives impact the change process?”. This paper contributes to existing literature by providing insights in how people in an organization experience an organizational shift to a more soft paradigm. Furthermore, it addresses some practical implications in undergoing such a shift which helps change agents to effectively implement this kind of change in the future.
The next section further elaborates on existing literature about the transition to an agile way of working. Besides, it provides an introduction to the concept of the function of narratives in academic research. Subsequently, the methodology section discusses the case site selection, research approach, data collection, and the data analysis procedure. This is followed by an elaborate description of the results, structured according to various change related topics. The results section ends with an overview of composite narratives per organizational group. The discussion section provides a discussion of the narratives, linked to existing literature. Besides, managerial implications, theoretical implications, limitations, and suggestions for future research are presented. Finally, this paper ends with a conclusion of the research.
LITERATURE REVIEW
Conducting a literature review up-front in a grounded theory study is not common. This is because Glaser (1978) warned exploratory researchers about the adverse effects of writing a literature review
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about the subject during the early stages of research process. However, one should have an understanding of concepts in the research area. Therefore, a short literature review is carried out. This literature review dives into the characteristics of an agile way of working and the concepts of narratives in research. In the discussion section of this paper, an elaborate discussion of the results related to the existing literature is provided.
The transition to an agile way of working
The previous section already introduced the agile way of working as part of the soft paradigm.
To gain a clearer view on what agile methods are, this will be discussed below. As mentioned before,
‘agile’ is developed in 2001, when the Agile Manifesto was written. Agile methods are characterized by iterative processes, collaboration, customer involvement, self-organizing teams, and adaptability to changes (Agile Alliance, 2001; Dingsøyr et al., 2012; Karrbom Gustavsson and Hallin, 2014). The Agile Manifesto does not provide a formal definition of agility, rather the principles should be interpreted as guidelines for working in an agile way (Dingsøyr et al., 2012). According to Rola, Kuchtaa, and Kopczyk (2016, p.49) “Agile methods became in fact a weapon allowing the opening of new markets and helping to maintain relationships with current customers”.
Agile methods are often seen as a reaction to traditional ‘stage-gate models’ (Karrbom Gustavsson and Hallin, 2014). “Whereas stage-gate models focus on regulated governance and control, agile methods of working in and managing projects focus on dynamics and flexibility” (Karrbom Gustavsson and Hallin, 2014, p.571). Thus, there seems to be quite a shift from perspective: traditional stage-gate models can be interpreted as hard, and agile methods can be seen as soft. Therefore, it is not surprising that project managers who are used to work with traditional stage-gate models may experience a sort of culture shock when trying to implement agile methods (Karlström and Runeson, 2005).
According to Nerur, Mahapatra, and Mangalaraj (2005), adoption of agile methodologies will likely pose several challenges for more traditional organizations. Indeed, Gandomani and Nafchi (2016) stated that problems with the transition to an agile way of working arise because the implementation process is more difficult than expected. To overcome this expectation gap, Gandomani and Nafchi (2016) provided a list of seven prerequisites for undertaking the agile transition. The authors used a grounded theory approach, and conducted interviews with several agile experts from across the world. The subjects of the seven prerequisites are as follows: (1) having convincing reasons for change, (2) defining business goals, (3) people buy-in, (4) initial training, (5) pilot project selection, (6) pre-startup assessment, and (7) team set up. Living up to these seven prerequisites, an organization is more likely to succeed the agile transition process (Gandomani and Nafchi, 2016). However, this study was limited to agile transition processes in the software industry, and it is therefore questionable if these prerequisites are required for every kind of organization.
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Concluding, prior literature provides essential elements for undergoing the transition to an agile way of working. Hence, organizations should realize that the process of implementation is crucial to successfully carry out this transition.
The concept of narratives in organizational research
“Narrative research is a rapidly expanding literature in organization studies” (Vaara et al., 2016, p.497). Solouki (2017) also highlights the importance and functions of narratives as an essential component of organizational change. But what exactly are narratives and how are these used to create a source of empirical evidence?
A narrative is a story, true or fictitious, about series of events, experiences, or something alike, which is used as a way to explain or understand certain events (Cambridge Dictionary, 2018). Vaara et al. (2016, p.496) define organizational narratives as “temporal, discursive constructions that provide a means for individual, social, and organizational sensemaking and sensegiving”. Sensemaking, in turn, is a process in which individuals socially construct the existence of an event, based on cues of the environment (Maitlis, 2005; Weick, 1995). These cues are about the interplay of actions in a social system, i.e. the organization (Weick and Sutcliffe, 2005). Sensemaking starts with chaos, and by the process of labelling and categorizing, a stabilized experience of the situation will be created (Weick and Sutcliffe, 2005). Therefore, in uncertain and ambiguous circumstances, sensemaking can help people to create an understanding of the situation and to deal with uncertainty (Maitlis, 2005). Hence, in times of change, when uncertainty increases, organizational members use sensemaking to cope with the situation.
The process of sensemaking can be linked to Weick’s ESR cycle (enactment, selection, retention), where action precedes interpretation, and interpretations set up a context for action (Kudesia, 2017; Weick, 1995). Enactment explains that people do not merely react on their environment, but also shape the environment according to their interpretation. Selection refers to the interpretation of meanings, and it describes how processing of information is influenced by interpretations. The social process of retention consists of interpretations becoming part of the group’s identity, interwoven into its narrative of the environment, and explains how those current interpretations influence subsequent actions (Weick, 1979). Thus, organizational members’ view on their environment is dependent on all kind of other actors in the social system.
The ‘narrative turn’ is a term that presents the shift toward legitimizing stories of people as meaningful sources of empirical knowledge (Hyvärinen, 2010). The temporal aspect of narratives makes them useful for understanding issues such as stability and change in organizations (Vaara et al., 2016).
Vaara et al. (2016) state that organizational narratives help researchers to understand the development of organizations and the role of actors within the organization. Moreover, Czarniawska (1998) argues that storytelling is an important aspect of pulling the research puzzle together. She emphasizes that stories, i.e. narratives, contain metaphors, which help researchers to understand and interpret meanings underneath the story. According to Buchanan and Dawson (2007), narratives also shape the future path
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of change. In other words, narratives are not merely descriptive, they offer an explanation for causality between antecedents, actions and consequences (Buchanan and Dawson, 2007), which makes them relevant for studying organizational change.
Vaara et al. (2016) provide three perspectives on organizational narratives: (1) the realist approach, (2) the interpretative approach, and (3) the poststructuralist approach. The first one, realist approach, states that narratives are a way to study things that exist independently of the narratives themselves. The second one, interpretative approach, focuses on people’s constructions of organizational phenomena. These narratives can be divided into individual narratives and composite narratives, where the latter is the most common design of the interpretative approach. This paper adopts the interpretative approach. The third one, poststructuralist approach, aims at exposing complexity, fragmentation and fluidity of narrative representation (Vaara et al., 2016).
Narratives have been used in management and organizational research in different ways.
Especially in areas of change, when there is high ambiguity, narratives are able to provide important knowledge about organizational events (Vaara et al., 2016). For example, Fronda and Moriceau (2008) used narrative research to analyse different views to make sense of change and thereby identify resistance to change. Whereas Fronda and Moriceau adopted a poststructuralist approach, Sonenshein (2009) took an interpretative perspective to explore ethical issues during a strategic change implementation. Thereby, Sonenshein (2009) constructed a theory to explain the evolvement of these issues. Thus, different approaches of narrative research are used in the area of organizational change.
This research will adopt the interpretative approach. This approach is most suitable since this study focuses on the constructions in people’s minds regarding to an organizational phenomenon, i.e.
the change towards a more soft approach. In this study, composite narratives of various organizational groups are constructed.
METHODOLOGY
Case site selection
The context for conducting this research was a Dutch financial company, operating in 40 countries. The organization offers wholesale and retail banking services; this research was carried out at the headquarters of their wholesale branch. The organization was undergoing the implementation of a major change, from working according to hard methods to a more soft, specifically agile, approach. Therefore, this organization was an interesting case for investigating the influence of organizational narratives on the process of an organizational change transition from hard to soft.
This study was part of a larger research project between the University of Groningen and the financial organization which started in 2017. Two periods of research were conducted earlier. The first period of research constructed a composite organizational narrative before the change process started, and found an ambiguous and equivocal adoption of both hard and soft aspects of change (de Boer, 2017).
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The second period of research investigated how narratives of groups with various levels of involvement differ in an organization-wide change (Poortstra, 2018). During the third period (this research), first steps of implementation of the change had been made, i.e. a reorganization of the so-called ‘-2’
management level was carried out at the start of this period. This study focused on narratives regarding hard and soft aspects of organizational change, constructed as a result of the change process.
Research approach
Since limited knowledge is available about organizational change from hard to soft methodologies, grounded theory research was used. This type of research tries to build theory based on the collected data, whereby the data directs the study, rather than the researcher (Glaser, 1992). Qualitative data provides rich data and is therefore well suited for exposing the meaning that people place on events, processes, and structures, as well as their connection with their social environment (Miles and Huberman, 1994). As mentioned before, the research question (“How do narratives of various organizational groups during implementation of an organization-wide change differ, and how do these narratives impact the change process?”) was answered by uncovering narratives of organizational members. To carry out this research, the researcher was physically present in the organization for four days a week, during a period of eight weeks. Employees were interviewed at their workplace, which makes this research a field study (Blumberg, Cooper, and Schindler, 2014). An interpretive approach was adopted to uncover narratives, which implies these narratives and reality are seen as being socially constructed.
Data collection
According to Blumberg et al. (2014), it is important to protect reliability, validity, and controllability in an exploratory study. Therefore, there was a strong focus on these topics during data collection and analysis.
During the same period, two other researchers also studied the change. Therefore, interviews were carried out together and data was shared among the three researchers. The researchers worked closely together in order to achieve intersubjective agreement (van Aken, Berends, and van der Bij, 2012). In total, 36 interviews (audio recording of 29h40m59s) were anonymously conducted with a variety of employees from different hierarchical levels, departments, backgrounds, and social positions in the organization, enhancing respondent reliability (van Aken et al., 2012). An overview of the interviewees, including their hierarchical position and role in the organization, can be found in Appendix A. By sharing data with two other researchers, and thus increasing the number of respondents, reliability was strengthened as well (van Aken et al., 2012). Every interview was recorded to provide data for the analysis.
Several sampling methods were used to select participants. The researcher started with getting an understanding of the hierarchical relationships and social structures within the current organization
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(before the change) and the future organization (after the change). Based on this understanding, participants from two different management layers across all different departments were selected and approached by the researcher. These management layers, for the first round of interviews, were chosen based on recommendation of the second period researchers, and on interest of the financial organization.
This convenience sampling method (Marshall, 1996) resulted in fifteen participants. Also, the contact person at the case site recommended four potential participants. Besides, snowball sampling was used by asking interviewees for recommendations (Blumberg et al., 2014), which resulted in nine participants. Finally, judgmental sampling was applied by using researcher’s own network to select eight additional participants (Marshall, 1996).
In order to uncover narratives, the researcher must understand underlying thoughts of employees. Therefore, data was collected by conducting unstructured interviews. Only one introductory question was prepared in advance: “What is [name organization] according to you, and what is your role in it?”. Answers on this introductory question provided a rich starting point to continue the interview.
After this question, the researcher only asked non-steering, clarifying questions in order to bring underlying narratives of participants to light. By asking probing questions, their thoughts, emotions, and behaviour could be uncovered. Only in situations in which respondents addressed totally irrelevant topics, the researchers were allowed to ask a steering question. This exception was a means to protect construct validity (van Aken et al., 2012). The interview protocol is presented in Appendix B.
Because researchers were part of the research setting, they may have influenced respondents and outcomes of interviews, leading to researcher bias. To limit this bias, the researcher was guided by an experienced researcher in the same field, currently working at the University of Groningen.
Moreover, after each interview, the three researchers discussed together issues that arose in order to control researcher’s bias. Besides, evaluative discussions between the researchers protected reliability and construct validity. To address circumstantial bias, all interviews were held in respondents’
workplace environment, in a meeting room where they could speak freely.
Besides interviews, additional data was collected by analysing organizational documents such as presentations, meetings and information documents.
To enhance controllability, the researcher kept track of a logbook during the data collection process. Besides, to trace back the researcher’s line of thought and to make the study replicable, several versions of the codebook were saved.
Data analysis
As a characteristic of grounded theory, data collection and data analysis were carried out simultaneously, shaping researchers’ data collection procedures. This shaping provided the researcher the possibility to collect more data about emerging topics (Charmaz, 1996). However, the risk of processing data too early had to be avoided, because this can lead to premature and even inaccurate interpretations (Eisenhardt, 1989). Therefore, the researcher did not start interpreting findings before all transcripts were analysed.
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Recordings of the interviews were transcribed, providing raw data for analysis. Subsequently, these transcripts were coded, as “codes are efficient data-labelling and data-retrieval devices” (Miles and Huberman, 1994, p.65). This coding process was done using ATLAS.ti, allowing researchers to systematically code the data, thereby enhancing researchers reliability (van Aken et al., 2012).
Transcripts were examined sentence by sentence to reach an elaborative analysis. Because of the explorative character of this research, inductive coding was used. This means that the ‘knowledge generating’ process starts with raw data, and from there on the researcher starts to theorize, rather than applying up-front theories (Bruce et al., 2016). The process of coding was done according to Glaser and Strauss (1967).
Open coding was carried out during the first round of coding. First order codes consisted of one word or small phrases to describe quotations in the transcript. Examples of used codes are: agile mind- set, empowerment of people, and uncertainty. After the first round of interviews, the three researchers coded the same five interviews separately and discussed their results together. This discussion led to a joint codebook. After this process, researchers divided the other transcripts to analyse separately in order to increase efficiency. Every time a researcher wanted to add a new code in the codebook, it was discussed among the three researchers. This resulted into new codes in the codebook, but also revisions of existing codes. By coding the first transcripts together, and making agreements on the codebook, inter-rater reliability was enhanced (McAlister, Lee, Kajfez, Faber, and Kennedy, 2017). Sometimes, simultaneous coding was applied when the researcher interpreted both apparent and underlying meanings in the same data segment (Saldaña, 2013).
Second, after collection of all data, axial coding was used to refine categories and subcategories.
The researcher reviewed the transcripts again to find similarities among codes, and in search for patterns.
During this analysis, the researcher examined how first order codes are linked together (Miles and Huberman, 1994). Grouping the codes into categories was an iterative process, which ended when the researcher achieved satisfaction with a clear overview. This process resulted in the grouping of first order codes into more abstract concepts, i.e. second order codes.
Third, selective coding was practiced to identify core categories and relationships. This type of coding resulted in themes overarching the concepts of second order codes. The coding process was iterative and it continued until theoretical saturation was reached, i.e. when no new insights emerged (Glaser and Strauss, 1967). The results of first, second, and third order coding process were merged into a codebook. For an overview of the data grouping, see figure 1 at the end of this section. The entire codebook, including definitions and examples can be found in Appendix C.
Organizational documents were analysed by scanning them on usage of hard and soft aspects.
This was facilitated by making notes of attended presentations and meetings with several key figures in the organizational change. Documents such as informative documents and posters were also scanned on usage of hard and soft aspects. This process resulted in side-information, and was relevant for the
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researcher to get an elaborate understanding of the change in the organization. For an overview of the additional sources, see Appendix D.
Figure 1. Data structure.
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RESULTS
This chapter presents findings of the research. Narratives of different groups are described regarding to following change related topics: view on change; organizational culture and atmosphere, way of working; and management role. For the sake of anonymity, every respondent is referred to as ‘he’.
Group classification
A rich amount of data was provided by participants. Since the interviews were unstructured, a lot of different topics were covered. By analysing the data, a pattern was found across perspectives of different groups in the organization.
To discuss the results, a classification of groups was made. In the former research phase, groups were created based on level of involvement (Poortstra, 2018). During analysis of this study, the third phase, a pattern was found between narratives of hierarchical layers within the organization. Therefore, it was decided to base the classification on hierarchical layer. These are divided as follows: top management, middle management, and employees. Top management include managers who are one or two layers below the Management Board. The middle management group consists of all managers below top management. A manager here is defined as someone who is responsible for a certain team of employees in the organization. The third group, employees, contains all organizational members who are not supervising others.
Besides, different from the former research phase, this study also interviewed respondents at the IT department. Since the agile way of working was already introduced at the IT side a couple of years ago, they are more experienced. This resulted in a pattern between narratives of the business side and the IT side of the organization. Therefore, distinction between business and IT was made. The IT side contains everyone working at the IT department of the organization. The biggest change for them will be the cooperation with the business side, meaning that business people will be added to the squads and tribes. Squads and tribes are part of the agile way of working at the organization: it is a certain way to structure the organization in teams. The business side of the organization consists of all service, operations, delivery, and support departments, with exception of IT. Some respondents in the organization were already involved in a pilot on the agile way of working, therefore distinction between
‘unexperienced’ and ‘pilot’ is sometimes made in discussing the results. ‘Unexperienced’ here means that the respondent did not have any experience with working agile within the organization. ‘Pilot’
respondents are those that were involved in a pilot regarding the agile way of working.
Together, this resulted into a classification of six groups: business top management, business middle management, business employees, IT top management, IT middle management, and IT employees. For a clear overview of this classification, see figure 2.
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Business side (unexperienced or pilot) IT side (experienced)
Top management Top management
Middle management Middle management
Employees Employees
Figure 2. Classification respondent groups.
View on change
This section outlines perceptions of participants on the following four topics: need for change, readiness for change, goal of change, and future expectations.
Need for change. Across all groups, hierarchical and departmental, everyone seemed to agree on the need for change. Several respondents viewed the organization as a front runner executing this change, while most others perceived it more as a need to keep up with competitors. Middle manager L01 explained that his way of working needs to be changed in order to make the organization more competitive:
“Because I’m still making that letter in Word, right? [laughs]. But that is the real point, if I’m there in five years, and the volumes have been tripled, you simply cannot do that anymore. You’re not competitive enough in terms of cost/income ratio, and you’re not competitive enough in terms of volumes, size. And that matters in a couple of years, so I would say: yes, we need innovation, less systems, become scalable and stay cheap”.
Also, urgency to make the change was addressed by a lot respondents, for example middle manager O15 mentioned: “All these new opportunities in the market, everything is opening up. If you don’t act, the company is not going to survive. And for [name organization] I think it is really clear that it will never survive the way it is now”. Middle manager IT06 addressed the feeling of urgency among employees: “They do feel that the agile transition is key to keep up with our competitors”.
Among business respondents, a view on ‘new competitors’ was found. For instance, middle manager O11 mentioned: “We really need to make a change. If you look at our competitors, our new competitors, that are fully new, and do not have any legacy, you have to make a change rather quickly.
And to me, it goes a bit slow”. Remarkably, whereas IT respondents did mention that the change is key to keep up with competitors, they did not view those competitors to be ‘new’ small tech companies like business viewed the competitors.
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Need for change Business IT
Top management Perceived need for change, focus on ‘new competitors’.
Perceived need for change, key to keep up with competitors.
Middle management Perceived need for change, focus on ‘new competitors’.
Perceived need for change, key to keep up with competitors.
Employees Perceived need for change, focus on ‘new competitors’.
Perceived need for change, key to keep up with competitors.
Figure 3. Narratives on the need for change.
Readiness for change. During interviews, awareness of the upcoming change was discussed.
Among IT groups, awareness was no relevant aspect since they already work agile. However, among the business groups, there were some interesting perceptions on change awareness. Top management perceived every group as aware of the agile way of working. In contrast, middle management and employees perceived some lack of awareness among employees. One of the employees even mentioned he had no idea what agile was, and how to pronounce it before the interview (L04). He emphasized this by stating: “I’ve read things about agile. I had this meeting with you guys, about agile, so I took a look on the website to see what’s there about agile, and how it works, or who should have experience with agile”.
Most respondents were aware of the change, and expressed excitement about the content of the change. This excitement was found at both business side, as well as IT side, especially in the top management and middle management layers. Middle manager O09 mentioned the agile way of working
“a very nice instrument to achieve success”. However, respondents at the business side sometimes described a lack of interest at employee level due to high work pressure. When employee L03 was asked how he learned about agile for himself he responded the following:
“By doing, and in my example by having the investigation last year. My thesis research. So that’s how I learn. And I did enrol in e-learning trainings but I did not complete them. - Researcher: Why not? - Time, lack of time”.
Another topic that emerged among respondents is change fatigue. The organization implemented a lot of change projects during the last decade, people are getting tired of this. This change fatigue became visible in middle management and employee groups at both business and IT side. Middle management experienced change fatigue by themselves, and recognized it by employees. Employee respondents spoke of tiredness of change among themselves and peers. One middle manager, O03, described it as follows:
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“People get a bit disappointed or tired … we’re a bit under attack from outside, we have lot of regulations, we had the crisis. So people get a bit tired of change. Every two years they have to go again and apply for their job etcetera. Sometime enough is enough”.
Remarkably, every time the topic ‘readiness for change’ arose during an interview, participants only talked about a lack of other individuals’ readiness, while emphasizing to be ready for the change themselves. Among middle management and employees at the business side there were some doubts about readiness for change of management. Middle manager TS01 talked about a new management style and a different way of working with teams, when the interviewer asked him if managers are ready, he responded as follows: “Partly yes I believe, but I think not everyone knows what it really means, they have to experience it” (TS01).
Readiness for change Business IT
Top management Perceived as ready, excited for the change.
Perceived as ready, excited for the change.
Middle management Doubts about readiness, excited for the change, but also change fatigue.
Perceived as ready, excited for the change, but also change fatigue.
Employees Perceived as not fully ready, lack of awareness, and change fatigue.
Perceived as ready, but also change fatigue.
Figure 4. Narratives on the readiness for change.
Goal of change. As mentioned before, most respondents expressed excitement about the content of the change. They valued intended outcomes such as faster delivery and improved client experience.
Respondent FM01 (top management) described importance of these goals:
“The time you once a week got a paper statement via the mail, compared to every five minutes people are touching, watching on the phone, society has changed. We want things now, fast. Fine, if you don’t have it, he has it. Then I go there. That is how simply it goes. Yes, it is critical to gain more speed”.
While most participants recognized intended goals, a few of them were wondering whether the upcoming agile change will be a real change or just another reorganization. Middle management acknowledged this view on the change among employees. For example, middle manager IT01 believed that “perhaps the team members are underestimating, or underestimating might not be the right word, but are not realizing what our intention is, or what our purpose is, and how strongly management or product owners stand behind this, because it is taking quite long”.
Currently, a new headquarters building is being constructed and it is planned to move into it in 2019. As already came to the fore in the former research phase, this building might be a source of the
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impression that the change is only a reorganization to reduce the workforce (Poortstra, 2018). Based on scale models of the current building and the new building, the new building is perceived to be half the size smaller. Again, during this research phase, the researcher noticed from observations and informal conversations, that the new building leads to rumours and speculations about reducing the workforce.
This smaller building sends signals to employees that the workforce will be reduced, even though it is not communicated explicitly. This new building and the potential reasoning behind it was not spoken about by top- and middle management.
Goal of change Business IT
Top management Stand behind the goal. Stand behind the goal.
Middle management
Stand behind the goal and
acknowledge this might not be the case for employees.
Stand behind the goal and acknowledge this might not be the case for
employees.
Employees Most of them recognize intended goals, some of them see it as ‘just another reorganization’.
Most of them recognize intended goals, some of them see it as ‘just another reorganization’.
Figure 5. Narratives on the goal of change.
Future expectations. As described in the previous section, the perceived goal of the change among most organizational members is to improve performance. Top management, on both business and IT side, is also really expecting this improved performance. For example, top manager O12 stated the following:
“Well, my expectations are, let’s be positive, my expectations are that indeed we’re going to be creating teams that are a lot more interdependent from each other, that can deliver with higher productivity and higher positive outcome what they’re working on”.
However, other respondents (mostly middle management and employees) expect a short term slow-down in work performance after implementation of the new structure. This slow-down is perceived to result from time needed to get used to the new structure and team compositions. Employee O14 experienced this during the pilot implementation:
“And I think, from the start, that there were a lot of meetings. Lot of recurrent meetings. So you have a sprint MI, you have a refinement session, you have a review. The first week we were all like: do we have another meeting? And once you pick up the recurrence, then you know why it is. But before, you are like: ‘are we only chatting or are we also working?’. So that is my experience for the first weeks and now I see that we are really delivering”.
Besides, respondents emphasized that management should be aware that working in a squad is not delivering output the first day. When O14 was asked if managers are aware of this, he answered:
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“No, I really don’t, I don’t think so, no. The organization will be like down for three to six months”.
Remarkably, the same participant (O14) was first talking about slow-down in the first weeks, where later he mentioned that the organization will be down for three to six months.
Next to the expected slow-down in work performance, scepticism was expressed among respondents. One type of scepticism expressed among employees was due to the nature of the banking industry, employee FM02 mentioned:
“I think it is a good way of working and especially for organizations that really make a product or deliver a service. Then I can really see it work. But for [name organization] I don’t really know. In the last two years we have been really busy with all this regulatory work, risk work. I think agile is really a good way to start new products and be innovative. And that's good that [name organization] has that aspiration, but over the last period of time we see that the effort has to be spent somewhere else and then I don’t know if agile really is the best way”.
Middle management acknowledged this type of scepticism among employees, and they perceived it to be difficult to implement the change within the organization. Top management also elaborated on this scepticism. However, they perceived it more as a challenge which can be overcome.
Moreover, scepticism regarding the design structure was identified among middle management.
The design structure refers to the design of new teams, layers, and roles. Different kinds of reasoning were mentioned. First, scope of senior management was perceived to be too big to manage. Second, it was mentioned that the organization would not have the right human resources to fit the new roles.
Third, respondents expressed scepticism that the organization will stay too hierarchical and that teams will not really work in an end-to-end fashion.
Future expectations Business IT
19 Top management Increased performance, it is
going to work out, some challenges to overcome.
Expect slow-down in daily work based on experience, increased performance, it is going to work out, some challenges to overcome.
Middle management Expect slow-down in daily work (top management perceived as not aware), going to be complex, scepticism in design structure.
Expect slow-down in daily work based on experience, going to be complex, scepticism in design structure.
Employees Expect slow-down in daily work (top management perceived as not aware), scepticism because of banking industry, curiosity.
Expect slow-down in daily work based on experience, scepticism because of banking industry.
Figure 6. Narratives on future expectations.
Organizational culture and atmosphere
This section describes respondents’ perceived current culture, desired culture, and atmosphere during the change.
Current culture. Participants described the organizational culture in different ways. No significant differences were found between respondents from IT versus business side. Collaboration and relationships with people are perceived to be an important cultural aspect among top- and middle management groups. Top manager O08 described: “Yet, I think the personal relationships and the things you create based on that, are very much [name organization] culture”.
Middle management and employees also emphasized the open, flexible culture with a lot of possibilities and opportunities. However, the organization is perceived as output driven and you have to take the chances yourself. Middle manager O01 described the organizational culture as following:
“We have a very open culture, you can talk to anybody. People are, well most people I think, are initially inclined to try to help you and are open for other thoughts. I think, well I obviously don’t have that much comparison, but while there’s hierarchy, it’s not really…, it’s not a dictatorship. So you have your own views. So if you can share your own ideas, then these also get noticed. And then you get opportunities.
You have to do it yourself though, no one is going to hold your hand”.
Besides, a lack of recognition and appreciation was perceived by both middle management and employees. Respondents explained this subsequently lead to demotivation to carry out work. Middle manager O10 explained:
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“[Name organization] became now, in my opinion, a totally cold organization where loyalty is actually not appreciated. Then you arrive rather quickly at words like ‘nepotism’. So everything has to be transparent, and you actually have to apply for your own function every two year, that is not seen as an element of appreciation. – Researcher: what are the consequences of that? – Demotivation, so a lack of engagement, a decrease in engagement”.
Current culture Business IT
Top management Relationships as important aspect.
Relationships as important aspect.
Middle management Relationships as important aspect. Open and flexible culture, but you have to do it yourself. Lack of recognition and appreciation.
Relationships as important aspect. Open and flexible culture, but you have to do it yourself. Lack of recognition and appreciation.
Employees Open and flexible culture, but you have to do it yourself. Lack of recognition and appreciation.
Open and flexible culture, but you have to do it yourself. Lack of recognition and appreciation.
Figure 7. Narratives on the current culture.
Desired culture. Although collaboration was perceived as present in the current culture, respondents among all hierarchical levels still indicated room for improvement. Top manager O04 emphasized importance of collaboration: “I think what we need to have in mind is the fact that we work against competition, we don’t work against each other, not between the tribes and centres of expertise, we are all one [name organization]”.
Middle management and employees also talked about how they would like to see the organization’s culture in the future. As these respondents experienced a lack of motivation, they emphasized necessity to improve this. Business employee O07 argued the following: “So I’m also looking at where do I need to get my motivation? I really like my job, and that’s motivating me, so that’s why I’m going happy to my office every day. But yeah, it’s difficult. It’s difficult. I’m looking for it as well”.
A few participants from the IT side (middle management and employees) emphasized that they would like to see moments to celebrate success. The agile way of working could be helpful facilitating this. Respondent IT01 (middle manager) made a comparison with the retail branch of the organization:
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“If you finish a sprint and you immediately continue on the next sprint which is urgent, and then on the next which is urgent, and on the next which is urgent, then when is the moment to celebrate and be happy? And I think also if I look at what is achieved at other areas in [name organization], who already went through the BizDevOps reorganization, I think they have that kind of pride more built into their process and their organization. And in Wholesale Banking we might have it left or right, certain teams have their demos or ceremonies et cetera, but it is not built into the organization or the process as strongly as in Domestic Banking”.
Desired culture Business IT
Top management Importance of collaboration. Importance of collaboration.
Middle management Importance of collaboration, motivating staff.
Importance of collaboration, motivating staff, celebration of success.
Employees Importance of collaboration, motivating staff.
Importance of collaboration, motivating staff, celebration of success.
Figure 8. Narratives on the desired culture.
Atmosphere during change. Top management has undergone a reorganization process a couple of weeks before interviews took place. Respondents talked about concerns, fear, informal talks, tension, and politics related to this process. According to their perspectives, the atmosphere was leading to a slow-down in the daily work performance. Currently, this is perceived by top management to also hold for middle managers and employees. As top manager L05 explains:
“I know when I was going through the selection process I was talking to other people: what does your pitch look like, who do you have your meetings with, how did your meeting go, what do you think, who will go for what position, well, that was half of my workday, right. Why should it be different with the people going through the selection process now?”.
This narrative is recognized by middle management and employees: they currently experience an uncertain environment which they perceive to be leading to less motivated people and decreased productivity. At the IT side, most people expect job security for engineers since they have been through a lot of reorganizations recently, however respondents mentioned this is never confirmed. Although they expected to be out of reorganization scope, middle managers and employees at the IT side expressed curiosity regarding the new design and composition of teams.
Some middle management respondents at the business side observed resistance among other middle managers and employees. This resistant behaviour ranged on a scale from “making sarcastic
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comments” (TS01) to “complain constantly” (O15) to “sabotage the transition” (O15). However, most respondents did not mention any form of observed resistance.
Atmosphere during change Business IT
Top management Atmosphere leading to slow-down in daily work.
Expectation of job security.
Middle management Atmosphere leading to slow-down in daily work. Observed resistance ranging from passive to active.
Expectation of job security, but curious how design of the teams is going to look like.
Employees Atmosphere leading to slow-down in daily work.
Expectation of job security, but curious how design of the teams is going to look like.
Figure 9. Narratives on the atmosphere of change.
Way of working
This section elaborates on the current way of working at both business and IT side, and how respondents expect this to differ after the change.
Current way of working. Currently, the organization is perceived as a silo structured top-down organization. Top manager IT02 mentioned: “If you have the management board, and they say: these targets have to be met, it is really top-down. Within [name organization], you don’t have a real flat organization”.
Respondents from IT side and pilots are already working agile. Overall, they talked about positive results regarding the change, they even think nobody wants to go back to the old way of working. Middle manager O11 (business pilot) mentioned that “people are very happy because they feel empowered, they have more power to arrange specific teams for themselves, and within boundaries, they don’t need a manager to take care of their work”. However, some respondents experienced uneven work distribution and side-steering by management.
In the current organization, respondents from the business, as well as the IT side perceive misalignment between the two departments. This perceived misalignment was found among respondents across all hierarchical groups. Business employee O07 explained the misalignment as follows:
“I still think they should involve us more. It’s already better the last couple of years, but they should listen to us more. Because we are the ones, the first people who are facing things to implement. And it’s also often that it has been developed and it’s ready, but they forgot the way of implementation. So okay, fine, but train us, tell us, write your work instructions properly so we can work with it, do a training,
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and that is often forgotten. And sales has been involved already, but the people who have to finally implement it will be forgotten in the meantime. And then you’ve missed a very important part”.
IT middle manager IT01 described the misalignment in the following way:
“I fully believe that the cooperation between business and IT can be better, or the understanding of each other. Because I do hear signals left and right where there are big concerns with respect to the ability or the engagement of the IT teams to deliver what is needed for the business”.
Current way of working Business IT
Top management Silo-structured, hierarchical.
Perceived misalignments between IT and business.
Silo-structured, hierarchical. Perceived misalignments between IT and business.
Happy with results.
Middle management Silo-structured, hierarchical.
Perceived misalignments between IT and business.
Silo-structured, hierarchical. Perceived misalignments between IT and business.
Happy with results, but also uneven work distribution and side-steering.
Employees Silo-structured, hierarchical.
Perceived misalignments between IT and business.
Silo-structured, hierarchical. Perceived misalignments between IT and business.
Happy with results, but also uneven work distribution and side-steering.
Figure 10. Narratives on the current way of working.
Expected way of working. At the business side, there are differences between hierarchical groups regarding the way of working they expect after implementation. Employees expect more collaboration and autonomy for the teams, with end-to-end responsibility. They expect an environment empowering them to carry out their job. Employee O05 mentioned: “For me agile is autonomy to the team”. This perceived autonomy and empowerment of teams, however, also led to scepticism among several respondents. Middle manager O13 mentioned: “it really needs ownership to be taken by people as an individual but also as a team. And people won’t take ownership from one day to another”.
Regarding the middle management group, there is slightly more emphasis on power of management to make decisions. Middle manager O16 explains the agile way of working as following:
“I think the agile way of working is that you let the team decide how much time or how much story points a certain story or task costs. In the meantime, management makes decisions. And makes promises to regulators, without consulting teams”. Among top management, empowering teams is emphasized as well, but it is argued that agile is a highly disciplined way of working, as top manager TS02 explains:
