How do organizational structures and working models support business agility

What comes first – agile mindset or the supporting organization?

On October 1, there were quite a few changes at Siemens – also by launching a new business segment “Digital Connectivity and Power” (DCP). The exciting story: The organization of this segment is consistently focussed on agile methods. I took the chance and spoke with Herbert Wegmann, General Manager of the new segment, and Johannes Waldhör, Head of Finance.

Agility is one thing – organizational topics seem to be the opposite. What is the aim of the reorganization?

Johannes: Agile cooperation is a key factor for the new segment, but also for the entire Siemens AG. We have to learn to communicate quickly, make decisions fast, focus 100% on the value stream all the way to our customers. That’s the goal: To provide the right answers to our customers’ requirements faster and better than anyone else. To do this, we especially need transparency at all levels as to what our common goals are and how each individual employee can contribute to achieving them.

But why a comprehensive reorganization? Well, we’ve already been working with agile projects in R&D for several years, but we realized that the transformation also has to come from the top, from management. Much in the organization today follows the principle that all we have to do is to plan carefully enough to achieve the desired success. This is, of course, a mistake, because the world around us is actually changing every day – and we have to keep up with it. It is therefore important to create the necessary freedom for the teams, also through organizational measures.

Frontrunners in corporate agility: Johannes Waldhör (left) and Herbert Wegmann (right)

Sounds good – but what does that mean in concrete terms?

Herbert: In concrete terms, it is a question of delegating real responsibility to the teams of experts. Just one example: If we are planning a product today, there are several milestones when the team has to get approvals from management, taking a lot of effort to pass successfully. Can we guarantee that the outcome is right for our customers by these checks? Hardly. Is it really value-adding? Probably even less. That’s why all these approvals will be much faster and easier in the future, because we are placing responsibility in small core teams of about 20-25 employees (called Business Line), who independently handle business development, customer projects and development plans – with short routes and close to the customer. And once this team of experts decide on a project or a change, then this is done – period.

But, on the other hand, doesn't that lead to more uncontrolled growth?

Herbert: Well, on the one hand, we have chosen our business lines in such a way that there is little overlapping. But, naturally there is still some overlapping, from a shared cyber security strategy to the introduction of new technologies like 5G. This is where our Synergy Lines such as Technology & Innovation (TI), Strategy (ST) or Research & Development (R&D) come into play – not in the sense of specifications, but as a support function for the Business Lines so that the wheel doesn’t have to be reinvented each time. And since the future agile leadership team (former Executive Board) is going to hold stand-up meetings twice a week, it is also ensured that information and feedback will be shared quickly.

Agile principles and methods help to drive the transformation

How could the employees prepare for this step?

Johannes: We set up training programs at all levels that address different aspects. This ranges from basic online training, which is really open to any employee, to the education of Agile Coaches, and all the way to measures for our managers. But much more important is communication and interaction with the employees. We introduced “Ask me Anything” sessions as a special communication format – one member of the leadership team is available for 30 minutes to answer all questions, without preparation, without an agenda, and without the employees having to submit anything in advance. And this at least once a month!

Herbert: I am interested in more than the methods and tools that can be learned through training. Above all, it is about an agile mindset, which is about self-organization and personal responsibility of teams and each individual employee. To be honest – this is something we have to practice every day, even in the leadership team.

But that also requires a new understanding of leadership – doesn't it?

Johannes: Yes, of course! In the future, we will talk much more about roles instead of permanently assigned functions. An employee can take on different roles at the same time, depending on what is currently on the agenda. The “Flight Level” model from Klaus Leopold helps us here, which defines the different roles depending on the flight altitude – either very detailed or with an eye on the big picture. And every role, every altitude is important for our success!

The agile managers of tomorrow will therefore above all have the task of designing social systems that enable the growth of teams and each individual employee as well as the growing into new roles. Assigning specific tasks to individual employees and monitoring the results will, on the other hand, be much less important than it is today – simply because we, as the management team, and I personally believe that the real experts know exactly how to solve a problem or a task.

In the future, we will perhaps be even more stringent than today in specifying the “what”, the goals we are pursuing – but we will consistently place the “how” in the hands of the teams. At the same time, there are new forms for management tasks, for example with so-called portfolio owners, who are really responsible for all operational tasks for a particular product family – far beyond today’s functions.

Does this reorganization now complete the agile transformation?

Herbert: On the contrary, this is only the beginning! We have granted ourselves a period of 18 months, starting on the first of October. This means that not every project has to switch to agile methods overnight. But it is also clear that agile transformation is not just a fad, but instead the decisive program for the future.

www.siemens.com/digital-connectivity