mckinsey ing agile case study

• SUGGESTED TOPICS
• The Magazine
• Newsletters
• Managing Yourself
• Managing Teams
• Work-life Balance
• The Big Idea
• Data & Visuals
• Reading Lists
• Case Selections
• HBR Learning
• Topic Feeds
• Account Settings
• Email Preferences

One Bank’s Agile Team Experiment

• Dominic Barton,
• Dennis Carey,

How ING revamped its retail operation

When web and mobile technologies disrupted the banking industry, consumers became more and more aware of what they could do for themselves. They quickly embraced what Ralph Hamers, CEO of the global banking group ING, calls “banking on the go.”

• Dominic Barton is the global managing partner of McKinsey & Company. He is a coauthor of Talent Wins: The New Playbook for Putting People First (Harvard Business Review Press, 2018).
• Dennis Carey is vice chairman of KornFerry and co-founder of ONYX , an invitation-only community for current and former CEOs of the world’s most influential corporations. He has recruited directors and CEOs for many of the most prestigious companies in America, served on several boards, taught corporate governance at the Wharton School, and co-authored seven books on strategy, talent, and risk. He founded the CEO Academy and ThePrium, both of which are best in class forums for corporate leaders. He has held post-doctoral fellowships at Harvard and Princeton.
• Ram Charan serves on seven private and public boards across the globe and is author or coauthor of 36 books and several HBR articles on corporate governance. He is the co-author of Boards That Lead: When to Take Charge, When to Partner, and When to Stay Out of the Way .

Partner Center

For a better experience, please use a modern browser like Chrome, Firefox, Safari or Edge.

London Business School Publishing

• Create a profile

• Browse cases
• How to order

Preview case

Click Preview case to review the first page of this case

ING Bank: Creating an Agile Organisation

By julian birkinshaw , scott duncan.

Set in 2016, this case describes ING Bank’s implementation of a radical new way of working using agile principles. ING’s agile way of working has been written up in Harvard Business Review, Sloan Management Review and McKinsey Quarterly. This case provides a detailed account of how the new structure was developed and implemented. The case describes the process of change in ING Bank, from the aftermath of the global financial crisis to 2016. It provides background information on two change initiatives (Tango and Less is More) that simplified and rationalised the bank’s activities, then it provides a detailed account of the major transformation that became known as RIO (“Redesign into Omnichannel”). It focuses on the choices made by Bart Schlatmann, COO of the Netherlands business, and his team – to pursue an omnichannel strategy (i.e. where all channels to market are linked together and managed seamlessly) and to build an organisation to support this strategy that drew inspiration from digital companies such as Google, Facebook and Amazon. The subsequent restructuring into “agile” teams was a groundbreaking move for a company in the rather conservative banking industry. The case provides lots of detail on how this new model works in practice. After 12 months 3,000 staff had embraced the culture of agile methodology. At the end of the case, Schlatmann had to consider two main questions: (1) How to balance the autonomy of tribes with alignment to the company’s strategic objective; and (2) How to roll out agile to other parts of the ING.

Learning objectives

• Understand the concept of ‘agile working’ and what the pros and cons of this organising model are.
• Explain how agile really works in practice – what it feels like to be part of a self-organising team, how bottom-up team activities are aligned to top-down demands.
• Gain insight into a change process in a large established firm, especially focusing on the incremental steps that need to be taken before a more radical move is possible.
• Provide insight into the challenges facing established banks in a contemporary setting, as they try to get to grips with the digital revolution.

Other cases in Strategy

• Entrepreneurship
• Innovation and Entrepreneurship
• Management Science and Operations
• Organisational Behaviour
• Organizational Behaviour and Strategy’
• Sustainability

Privacy Overview

Case Study: ING

The challenge

In 2018, ING embarked on a significant transformation toward Agile methodologies, opting the Spotify model after thorough consultation with McKinsey & Co . This decision was driven by the Unite 2020 vision, aimed at integrating the BE and NL banks into a single, more efficient entity.

ING historically faced challenges due to the separation of the two banks, leading to issues with meeting delivery deadlines. More often than not, they were not delivering on their promises or meeting their customers’ satisfaction. To address these challenges, ING sought experienced professionals to drive this initiative, and I was among those enlisted to help them achieve their goals. For further insights, I have detailed this experience in an extensive blog post .

As a senior Agile coach, I was brought on board to coach five squads and mentor new internal Agile coaches. Each tribe comprised approximately 150 people, encompassing three products, each with its own Product Area Lead.

Upon my arrival, the squads I was assigned to were operating in a typical waterfall model. This included one squad focused on front-end development, another on middleware, a third on backend development, an operations team, and a design team.

After several months of intensive coaching, and with the consent of the Product Area Leads, I facilitated the formation of end-to-end, autonomous delivery teams. Each team was responsible for a specific segment of the product. Depending on their workload and nature of tasks, some teams adopted Scrum while others used Kanban. However, all teams eventually became proficient in estimation, backlog management, continuous testing, and CI/CD practices.

Overcoming resistance to change was a significant hurdle, which we addressed through regular feedback sessions, success showcases, and strong leadership support.

The Agile transformation at ING is a testament to the effectiveness of such initiatives in modern enterprises. This transformation was not merely coincidental but a result of bold decision-making, substantial investment in quality resources, and a leadership team committed to the transformation’s success.

KEY TAKEAWAYS

1. Hiring experienced people is key for a successful Agile transformation initiative. 2. Leadership support is key to adopting Agile methodologies. 3. Agile transformation is not just a process change, but also a cultural shift.

Ready to Achieve Similar Results?

If you’re seeking transformative outcomes for your organization, I’m here to guide you with proven methodologies and hands-on expertise.

Get in touch

OKR: should you stretch your goals?

If you’re just starting with scrum, these are the top mistakes you will make, tribes, squads, chapters…what’s with the “new”​ lingo, stop making assumptions.

© 2023 All Rights Reserved | coachachilles.com | Privacy Policy | Sitemap

• Privacy Overview
• Strictly Necessary Cookies
• 3rd Party Cookies
• Additional Cookies
• Cookie Policy

This website uses cookies so that we can provide you with the best user experience possible. Cookie information is stored in your browser and performs functions such as recognising you when you return to our website and helping our team to understand which sections of the website you find most interesting and useful.

Strictly Necessary cookies should be enabled at all times to provide you with a functional website experience. This includes:

• save your preferences for cookie settings
• save your preference for the popup shown on this website
• save your settings for the Woocommerce shopping cart when you sign up for a training

This website uses Google Analytics to collect anonymous information such as the number of visitors to the site, and the most popular pages.

Keeping this cookie enabled helps us to improve our website.

This website also uses Google's reCAPTCHA service to protect against automated bot traffic and enhance the security of certain online forms.

Please enable Strictly Necessary Cookies first so that we can save your preferences!

This website uses the additional cookies to provide you the following functionality:

- remember your preference for the popups shown on this website, - remember your settings for the Woocommerce shopping cart when you sign up for a training

More information about how we use cookies can be found in our privacy policy .

• Harvard Business School →
• Faculty & Research →
• January 2018 (Revised May 2018)
• HBS Case Collection

Transformation at ING (A): Agile

• Format: Print
• | Language: English
• | Pages: 19

About The Author

William R. Kerr

Related work.

• January 2018
• Faculty Research

Transformation at ING (B): Innovation

Transformation at ing (c): culture, transformation at ing (a), (b), & (c).

• October 2019
• Transformation at ING (B): Innovation  By: William R. Kerr, Federica Gabrieli and Emer Moloney
• Transformation at ING (C): Culture  By: William R. Kerr and Alexis Brownell
• Transformation at ING (A): Agile  By: William R. Kerr, Federica Gabrieli and Emer Moloney
• Transformation at ING (A), (B), & (C)  By: William R. Kerr and Jordan Bach-Lombardo
• Transformation at ING (A), (B), & (C)  By: William R. Kerr

• Open Banking
• Cryptocurrency
• Machine Learning
• Travel Technology
• Health Tech
• Success stories
• Fintech Companies

In today’s Fintech market, value is everything

Cathie wood at consensus 2024: bitcoin is ‘unstoppable’, be warned, ai crypto scams are on the rise, open payment technologies ltd expands in latin america offering digital wallet…, top defi trends to watch in the second half of 2024, how blockchain technology is transforming the business, immersive technology, blockchain and ai are converging — and reshaping our…, the future of defi: trends to watch, how google is shaping the future with ai innovations, these four trends are shaping how fintech should be using generative…, the power of ai and how it’s transforming the financial landscape, how to harness ai and data portability for greater financial inclusion.

• Information Technology

McKinsey: ING’s agile transformation

Two senior executives from the global bank describe their recent journey.

Established businesses around the world and across a range of sectors are striving to emulate the speed, dynamism, and customer centricity of digital players. In the summer of 2015, the Dutch banking group ING embarked on such a journey, shifting its traditional organization to an “agile” model inspired by companies such as Google, Netflix, and Spotify. Comprising about 350 nine-person “squads” in 13 so-called tribes, the new approach at ING has already improved time to market, boosted employee engagement, and increased productivity. In this interview with McKinsey’s Deepak Mahadevan, ING Netherlands chief information officer Peter Jacobs and Bart Schlatmann, who, until recently, was the chief operating officer of ING Netherlands, explain why the bank needed to change, how it manages without the old reporting lines, and how it measures the impact of its efforts.

The Quarterly : What prompted ING to introduce this new way of working?

Bart Schlatmann: We have been on a transformation journey for around ten years now, but there can be no let up. Transformation is not just moving an organization from A to B, because once you hit B, you need to move to C, and when you arrive at C, you probably have to start thinking about D.

In our case, when we introduced an agile way of working in June 2015, there was no particular financial imperative, since the company was performing well, and interest rates were still at a decent level. Customer behavior, however, was rapidly changing in response to new digital distribution channels, and customer expectations were being shaped by digital leaders in other industries, not just banking. We needed to stop thinking traditionally about product marketing and start understanding customer journeys in this new omnichannel environment . It’s imperative for us to provide a seamless and consistently high-quality service so that customers can start their journey through one channel and continue it through another—for example, going to a branch in person for investment advice and then calling or going online to make an actual investment. An agile way of working was the necessary means to deliver that strategy.

The Quarterly : How do you define agility?

Bart Schlatmann: Agility is about flexibility and the ability of an organization to rapidly adapt and steer itself in a new direction. It’s about minimizing handovers and bureaucracy, and empowering people. The aim is to build stronger, more rounded professionals out of all our people. Being agile is not just about changing the IT department or any other function on its own. The key has been adhering to the “end-to-end principle” and working in multidisciplinary teams, or squads, that comprise a mix of marketing specialists, product and commercial specialists, user-experience designers, data analysts, and IT engineers—all focused on solving the client’s needs and united by a common definition of success. This model [see exhibit] was inspired by what we saw at various technology companies, which we then adapted to our own business.

The Quarterly : What were the most important elements of the transformation?

Peter Jacobs: Looking back, I think there were four big pillars. Number one was the agile way of working itself. Today, our IT and commercial colleagues sit together in the same buildings, divided into squads, constantly testing what they might offer our customers, in an environment where there are no managers controlling the handovers and slowing down collaboration.

Number two is having the appropriate organizational structure and clarity around the new roles and governance. As long as you continue to have different departments, steering committees, project managers, and project directors, you will continue to have silos—and that hinders agility.

The third big component is our approach to DevOps 1 and continuous delivery in IT. Our aspiration is to go live with new software releases on a much more frequent basis—every two weeks rather than having five to six “big launches” a year as we did in the past. The integration of product development and IT operations has enabled us to develop innovative new product features and position ourselves as the number-one mobile bank in the Netherlands.

Finally, there is our new people model. In the old organization, a manager’s status and salary were based on the size of the projects he or she was responsible for and on the number of employees on his or her team. In an agile performance-management model , there are no projects as such; what matters is how people deal with knowledge. A big part of the transformation has been about ensuring there is a good mix between different layers of knowledge and expertise.

The Quarterly : What was the scope of this transformation? Where did you start, and how long did it take?

Bart Schlatmann: Our initial focus was on the 3,500 staff members at group headquarters. We started with these teams—comprising previous departments such as marketing, product management, channel management, and IT development—because we believed we had to start at the core and that this would set a good example for the rest of the organization.

We originally left out the support functions—such as HR, finance, and risk—the branches, the call centers, operations, and IT infrastructure when shifting to tribes and squads. But it doesn’t mean they are not agile; they adopt agility in a different way. For example, we introduced self-steering teams in operations and call centers based on what we saw working at the shoe-retailer Zappos. These teams take more responsibility than they used to and have less oversight from management than previously. Meanwhile, we have been encouraging the sales force and branch network to embrace agility through daily team stand-ups and other tactics. Functions such as legal, finance, and operational risk are not part of a squad per se, as they need to be independent, but a squad can call on them to help out and give objective advice.

It took about eight or nine months from the moment we had written the strategy and vision, in late 2014, to the point where the new organization and way of working had been implemented across the entire headquarters. It started with painting the vision and getting inspiration from different tech leaders. We spent two months and five board off-sites developing the target organization with its new “nervous system.” In parallel, we set up five or six pilot squads and used the lessons to adapt the setup, working environment, and overall design. After that, we were able to concentrate on implementation—selecting and getting the right people on board and revamping the offices, for example.

The Quarterly : Was agility within IT a prerequisite for broader organizational change?

Peter Jacobs: Agility within IT is not a prerequisite for a broader transformation, but it certainly helps. At ING, we introduced a more agile way of working within IT a few years ago, but it was not organization-wide agility as we understand it today, because it did not involve the business. You can certainly start in IT and gradually move to the business side, the advantage of this being that the IT teams can test and develop the concept before the company rolls it out more widely. But I think you could equally start with one value stream, let’s say mortgages, and roll it out simultaneously in the business and in IT. Either model can work.

What you can’t do—and that is what I see many people do in other companies—is start to cherry pick from the different building blocks. For example, some people formally embrace the agile way of working but do not let go of their existing organizational structure and governance. That defeats the whole purpose and only creates more frustration.

The Quarterly : How important was it to try to change the ING culture as part of this transformation?

Bart Schlatmann: Culture is perhaps the most important element of this sort of change effort. It is not something, though, that can be addressed in a program on its own. We have spent an enormous amount of energy and leadership time trying to role model the sort of behavior—ownership, empowerment, customer centricity—that is appropriate in an agile culture. Culture needs to be reflected and rooted in anything and everything that we undertake as an organization and as individuals.

For instance, one important initiative has been a new three-week onboarding program, also inspired by Zappos, that involves every employee spending at least one full week at the new Customer Loyalty Team operations call center taking customer calls. As they move around the key areas of the bank, new employees quickly establish their own informal networks and gain a deeper understanding of the business.

We have also adopted the peer-to-peer hiring approach used by Google. For example, my colleagues on the board selected the 14 people who report to me. All I have is a right of veto if they choose someone I really can’t cope with. After thousands of hires made by teams using this approach at every level in the organization, I have never heard of a single veto being exercised—a sure sign that the system is working well. It’s interesting to note, too, that teams are now better diversified by gender, character, and skill set than they were previously. We definitely have a more balanced organization.

A lot is also down to the new way we communicate and to the new office configuration: we invested in tearing down walls in buildings to create more open spaces and to allow more informal interaction between employees. We have a very small number of formal meetings; most are informal. The whole atmosphere of the organization is much more that of a tech campus than an old-style traditional bank where people were locked away behind closed doors.

The Quarterly : Was a traditional IT culture an impediment to the transformation?

Peter Jacobs: In IT, one of the big changes was to bring back an engineering culture, so there’s now the sense that it’s good to be an engineer and to make code. Somehow over the years, success in IT had become a question of being a good manager and orchestrating others to write code. When we visited a Google IO conference in California, we were utterly amazed by what we saw and heard: young people talking animatedly about technology and excitedly discussing the possibilities of Android, Google Maps, and the like. They were proud of their engineering skills and achievements. We asked ourselves, “Why don’t we have this kind of engineering culture at ING? Why is it that large enterprises in Holland and Western Europe typically just coordinate IT rather than being truly inspired by it?” We consciously encouraged people to go back to writing code—I did it myself—and have made it clear that engineering skills and IT craftsmanship are what drive a successful career at ING.

The Quarterly : Can you say more about the companies that inspired you?

Peter Jacobs: We came to the realization that, ultimately, we are a technology company operating in the financial-services business. So we asked ourselves where we could learn about being a best-in-class technology company. The answer was not other banks, but real tech firms.

If you ask talented young people to name their dream company from an employment perspective, they’ll almost always cite the likes of Facebook, Google, Netflix, Spotify, and Uber. The interesting thing is that none of these companies operate in the same industry or share a common purpose. One is a media company, another is search-engine based, and another one is in the transport business. What they all have in common is a particular way of working and a distinctive people culture. They work in small teams that are united in a common purpose, follow an agile “manifesto,” interact closely with customers, and are constantly able to reshape what they are working on.

Spotify, for example, was an inspiration on how to get people to collaborate and work across silos—silos still being a huge obstacle in most traditional companies. We went to visit them in Sweden a few times so as to better understand their model, and what started as a one-way exchange has now become a two-way exchange. They now come to us to discuss their growth challenges and, with it, topics like recruitment and remuneration.

The Quarterly : Without traditional reporting lines, what’s the glue that holds the organization together?

Bart Schlatmann: Our new way of working starts with the squad. One of the first things each squad has to do is write down the purpose of what it is working on. The second thing is to agree on a way of measuring the impact it has on clients. It also decides on how to manage its daily activities.

Squads are part of tribes, which have additional mechanisms such as scrums, portfolio wall planning, and daily stand-ups to ensure that product owners are aligned and that there is a real sense of belonging. Another important feature is the QBR [quarterly business review], an idea we borrowed from Google and Netflix. During this exercise, each tribe writes down what it achieved over the last quarter and its biggest learning, celebrating both successes and failures and articulating what it aims to achieve over the next quarter—and, in that context, which other tribe or squad it will need to link up with. The QBR documents are available openly for all tribes: we stimulate them to offer input and feedback, and this is shared transparently across the bank. So far, we have done four QBRs and, while we are improving, we still have to make them work better.

In the beginning, I think the regulators were at times worried that agile meant freedom and chaos; that’s absolutely not the case. Everything we do is managed on a daily basis and transparent on walls around our offices.

The Quarterly : Can traditional companies with legacy IT systems really embrace the sort of agile transformation ING has been through?

Peter Jacobs: I believe that any way of working is independent of what technology you apply. I see no reason why an agile way of working would be affected by the age of your technology or the size of your organization. Google and ING show that this has nothing to do with size, or even the state of your technology. Leadership and determination are the keys to making it happen.

The Quarterly : Are some people better suited to agile operating approaches than others?

Bart Schlatmann: Selecting the right people is crucial. I still remember January of 2015 when we announced that all employees at headquarters were put on “mobility,” effectively meaning they were without a job. We requested everyone to reapply for a position in the new organization. This selection process was intense, with a higher weighting for culture and mind-sets than knowledge or experience. We chose each of the 2,500 employees in our organization as it is today—and nearly 40 percent are in a different position to the job they were in previously. Of course, we lost a lot of people who had good knowledge but lacked the right mind-set; but knowledge can be easily regained if people have the intrinsic capability.

Peter Jacobs: We noticed that age was not such an important differentiator. In fact, many whom you may have expected to be the “old guards” adapted even more quickly and more readily than the younger generation. It’s important to keep an open mind.

The Quarterly : How would you quantify the impact of what has been done in the past 15 months?

Bart Schlatmann: Our objectives were to be quicker to market, increase employee engagement, reduce impediments and handovers, and, most important, improve client experience. We are progressing well on each of these. In addition, we are doing software releases on a two- to three-week basis rather than five to six times a year, and our Net Promoter Score 2 and employee-engagement scores are up multiple points. We are also working with INSEAD, the international business school, to measure some of these metrics as a neutral outsider.

The Quarterly : Do you see any risks in this agile model?

Peter Jacobs: I see two main risks. First, agility in our case has been extremely focused on getting software to production and on making sure that people respond to the new version of what they get. If you are not careful, all innovations end up being incremental. You therefore have to organize yourself for a more disruptive type of innovation—and you can’t always expect it to come out of an individual team.

Second, our agile way of working gives product owners a lot of autonomy to collect feedback from end users and improve the product with each new release. There is a risk that people will go in different directions if you don’t align squads, say, every quarter or six months. You have to organize in such a way that teams are aligned and mindful of the company’s strategic priorities.

The Quarterly : What advice would you give leaders of other companies contemplating a similar approach?

Bart Schlatmann: Any organization can become agile, but agility is not a purpose in itself; it’s the means to a broader purpose . The first question you have to ask yourself is, “Why agile? What’s the broader purpose?” Make sure there is a clear and compelling reason that everyone recognizes, because you have to go all in—backed up by the entire leadership team—to make such a transformation a success. The second question is, “What are you willing to give up?” It requires sacrifices and a willingness to give up fundamental parts of your current way of working—starting with the leaders. We gave up traditional hierarchy, formal meetings, overengineering, detailed planning, and excessive “input steering” in exchange for empowered teams, informal networks, and “output steering.” You need to look beyond your own industry and allow yourself to make mistakes and learn. The prize will be an organization ready to face any challenge.

Related articles More from author

Open payment technologies ltd expands in latin america offering digital wallet services to argentina, ai strategies for fintech firms: how to power up.

Latest article

5 Strategies for Managing Your Investment Risks

• Privacy policy
• Legal notice
• Cookies policy

ING’s Agile Transformation—Teaching an Elephant to Race

• November 2019
• Journal of Creating Value 5(2):239496431987560
• 5(2):239496431987560

• École des Ponts ParisTech

Discover the world's research

• 25+ million members
• 160+ million publication pages
• 2.3+ billion citations

No full-text available

To read the full-text of this research, you can request a copy directly from the authors.

• Álan Júnior Da Cruz Andrade

• Renato Lopes d
• Renato Lopes Da Costa
• J STRATEGIC INF SYST

• J Inform Knowl Manag

• MANAGE DECIS
• Katja Hutter

• J Appl Behav Sci
• Maria Paula Novakoski Perides

• Jackelynne Silva-Martinez
• Marcel Kwakernaak

• Bjarte Bogsnes

• B. Schlatmann
• D. Mahadevan

• MIT SLOAN MANAGE REV
• J. Birkinshaw

• Kenneth Preiss
• J Birkinshaw
• N V Ing Groep
• J.-C Conticello
• A Van Bennekum
• Recruit researchers
• Join for free
• Login Email Tip: Most researchers use their institutional email address as their ResearchGate login Password Forgot password? Keep me logged in Log in or Continue with Google Welcome back! Please log in. Email · Hint Tip: Most researchers use their institutional email address as their ResearchGate login Password Forgot password? Keep me logged in Log in or Continue with Google No account? Sign up

How McKinsey Embraces Agile As Key To Managing Talent

Talent is now the determiner of business success, and agility is its philosophical underpinning, according to the interesting new book, Talent Wins: The New Playbook for Putting People First (HBRP, 2018) by Dominic Barton, the global managing partner of McKinsey & Company, and his colleagues Dennis Carey and Ram Charan.

As a result, talent needs to move to the very top of the CEO’s agenda. The book, along with the accompanying article, “ An agenda for the talent-first CEO ,” is a handbook specifically directed at CEOs and intended to help them do exactly this.

McKinsey on talent

Talent Transcends Strategy

In Talent Wins , we learn that the era “when strategy was paramount, organizations were designed for control, with little attention paid to the velocity of decision making or the agility needed to adjust on the fly to external changes” is over. Now CEOs need to realize that “talent is the value creator and therefore belongs at the top of its agenda… Agile organizations built around empowered teams are the best way to constantly and nimbly match the right talent to the right strategic initiatives.”

Now CEOs must put talent and finance on at least an equal footing, while recognizing that talent isn’t a thing that can be deployed like financial capital.

Deploying human capital is very different from deploying financial capital. Dollars and euros will go where you send them—and they won’t complain, of course. People, on the other hand, want to have a say in their fate. And at a time when talent is in such high demand, you must allow—and even encourage—people to have their say if you hope to attract the very best in your field. So, the successful deployment of talent is now largely a matter of creating an environment where the interests, ambitions, and innovations of people constantly shape the strategy and future of the company.

“The central premise of a talent-driven company,” says McKinsey, “is that talent drives strategy, as opposed to strategy being dictated to talent. The wrong talent inevitably produces the wrong strategy, and fails to deliver. Numbers like sales and earnings are the result of placing the right people in the right jobs where their talents flourish and they can create value that ultimately shows up in the numbers.”

The central question for the firm thus becomes: “How can we recruit, utilize, and develop people to deliver greater value to customers—and do so better than the competition?”

Behind The Rise Of Talent: The Power Of The Customer

Attracting the very best in the field is needed because of changes in the marketplace. The current marketplace is one in which each customer needs to be treated as a unique individual (what has been called N=1) This goes beyond mass customization or “a customer of one”: those are still business-centric views of the consumer. In the Copernican revolution in today’s management , the customer is the center of the commercial universe. The firm needs to have the capability of having interactive relationships with each customer and be involved in personalized, co-creation of experiences: as for example in Spotify’s Discover Weekly .

To win in this world, firms need to be able to generate instant, intimate, frictionless, interactive value at scale . Those that can’t won’t survive. And top performance will depend on top talent: the differential performance between the beginner and the expert may be as much as 1:100 in extreme cases and even 1:8 on average. Slow-moving top-down bureaucracies, or even meritocracies, simply won’t be able to keep up.

The battle for talent is being fought in part with astronomical compensation . “People who work at major tech companies or have entertained job offers from them have told The New York Times that specialists in artificial intelligence with little or no industry experience can make between $300,000 and $500,000 a year in salary and stock. Top names can receive compensation packages that extend into the millions.”

Yet money isn’t the whole ball game. Top talent is footloose and won’t stick around if they find themselves in an organization where the top management bosses them around and doesn’t listen to their ideas. In this world, the very word, “boss,” is a dirty word, particularly if the incumbent is not knowledgeable about the matter at hand—a frequent occurrence in today’s fast-moving, complex, high-tech environment.

The Talent-Driven Enterprise

How is a CEO to cope? Talent Wins suggests that the talent-driven enterprise must master four key elements.

• Design For Agility

“First, design your organization for agility. By agility, we mean the ability to adapt swiftly to the unpredictable trends that disrupt and reshape your industry… Facebook offers a good model. Its people work in teams that form and disband as occasion warrants. It offers alternative career paths and compensation that directly reward value creation.”

The book offers a capsule description of Agile management :

Structurally, more people are deployed in customer-facing teams while fewer people attend to centralized oversight of corporate profit, strategy, and direction. Major decisions become the responsibility of select, efficient, cross-functional committees, while the great majority of the rest are delegated to empowered teams and individuals. Where they can, these companies create signature processes that differentiate them from the competition, but they don’t try to prescribe the details of how their many teams get work done. The result is a company where employees know ‘this is how we do things around here,’ and yet feel empowered to come up with creative solutions to the rapidly evolving challenges they face.

McKinsey’s embrace of Agile isn’t simply following a fad. It flows from hard-headed financial reasons. In a related McKinsey report , we learn that “Agile units are over 1.5 times more likely to report higher performance compared to their competitors.”

• Think Platform, Not Structure

Second, firms should “think platform, not structure. This means replacing a fixed vertical hierarchy with an internal market that governs the deployment of talent….Traditional hierarchy gives way to a marketplace that provides talent and resources to a collection of small teams that cut across business lines and market segments.”  Examples like Haier “may seem radical at first blush” but “many companies in many different industries can benefit from this kind of market-driven, fluid organization.”

• Make Work Meaningful

Third, McKinsey urges firms to “make work meaningful… It’s not just millennials who crave purpose at work. A sterile workplace will never capture the full potential of any truly creative person.” Without meaning, “you will never attract, and keep, the great talent that you need in order to thrive in our unpredictable economy.”

At firms like Facebook and Haier, “employees think solution before profit…. There’s an assumption—which has been borne out repeatedly by the marketplace—that excelling at the former will lead naturally to the latter. The solution-first approach reflects an appropriately modern, flexible understanding of how quickly marketplace dynamics can shift, and both companies have shown an admirable ability to pivot quickly.”

McKinsey also points to Gallup surveys which show that less than 30% of U.S. employees feel a strong connection to their company and work for it with passion. Worse, almost 20% of employees are actively disengaged and trying to undermine the company. These findings should be seen as sharp warning to any traditional manager: top talent isn’t going to stick around unless they see meaning in what they do.

• Understand Organizational Culture

Creating meaning will in turn depend on the organization’s culture. As CEO, you need to “understand your company’s social architecture, and measure and monitor it. This will be an ongoing concern, given that you’re never finished designing and redesigning the organization.”

McKinsey points to the need for very substantial progress in this area. Indeed, the C-suite itself recognizes its own shortcomings in dealing with people. According to a McKinsey survey of corporate directors, “Very few feel they are doing a good job developing people and ensuring that the company has a strong, healthy culture.” Moreover, they don’t have a good grasp of who’s adding value to the firm: according to a McKinsey study, “about 70% of senior executives are wrong about who is most influential in their organization.” In part, that’s because of what they spend their time on: most HR discussions at the board level concern “CEO succession and executive compensation.” Compensation committees don’t help much either: most “are noteworthy only when they overpay their CEO.”

Change is needed. “The compensation committee must evolve into a group focused on the recruitment, deployment, and development of talent.” It should be “given a new name, such as the talent and rewards committee, or perhaps the people committee.”

But it’s not just changing the name of a committee. It includes defining “social architecture as the set of norms guiding how work happens in an organization. Think of it as encompassing the ground rules for the processes and behaviors teams will use to turn ideas into value, a common vocabulary for everyone trying to work together toward a clearly understood goal. These rules should set the tone of debate and foster a mindset that supports constructive change.”

A Different Kind Of Organization

The result is likely to be startling to McKinsey’s CEO clientele. “Organizations that want talent to drive strategy will look radically differently from the hierarchical corporations of the past, the kind laden with multiple layers of managers”

Picture a leading multinational where employees decide for themselves which team they’d like to join, and which projects they’d like to attack. How about a company divided into some two hundred customer-facing units, each with its own pay scale and work methods, each so talent-driven that employees are given the right to fire their unit leader? These aren’t far-out fantasies: such companies exist today.

McKinsey gives detailed descriptions of Facebook and Haier.

The Case Of Facebook

MckKinsey cites Facebook as “a great example of a company built for agility.” The book recounts how CEO Zuckerberg led the shift from desktop to mobile. “He put mobile developers on every product team. As he explained to one financial analyst, ‘I told all of our product teams, when they came in for reviews: ‘Come in with mobile. If you come in and try to show me a desktop product, I’m going to kick you out. You have to come in and show me a mobile product.’’ Instead of struggling to adapt a legacy product, Facebook’s teams were unleashed to think first about creating great mobile products. New offerings emerged left and right, embodying the Facebook ethos of “move fast and break things.” Many never panned out… But many terrific ideas also flew up from the teams, and were implemented with speed and rigor. The overall result is astounding. By the end of 2016, mobile accounted for 84 percent of the company’s ad revenue. Annual revenue reached $27.6 billion, up from $7.8 billion in 2013.”

Agile management was key to the success. “Zuckerberg’s commitment and focus were critical to the turnaround. But without the team-based culture he had built over the years, Facebook might have gone the way of other erstwhile tech powerhouses, like Netscape and Yahoo. Managing a collection of empowered teams is complicated, but Facebook does it better than almost any other company.”

At Facebook, the talent doesn’t have to enter the ranks of management to advance in their career. The talent can keep boosting career (and pay) without ever moving onto the managerial ladder. There are in effect dual career tracks.

The Case Of Haier

At Haier, “CEO Zhang Ruimin is a visionary leader whose goal has always been to create a company that readily provides solutions to any problem that bedevils its customers (although Haier prefers to call them “users”). That’s a very different mindset from a CEO who thinks about his or her company simply as a manufacturer of products.”

McKinsey warns CEOs: “Haier CEO Zhang Ruimin once told reporters that large companies need to ‘lose control step-by-step.’ That sounds scary, but it’s a keenly perceptive description of how to optimize organizations in an era of constant change.”

’In the Internet era,’ he has explained, ‘every company must strive to eliminate the distance between the producer and the user.’ To do that, Zhang radically restructured Haier by breaking down the entire organization into around two thousand micro enterprises. CEO Zhang hasn’t just dismantled hierarchy, he’s turned the very concept on its head. In most companies, product decisions are made by managers at the top of the decision chain. At Haier, users drive the product decisions, and everything else flows from their choices. As radical as they are, the small and micros are in some ways merely the logical organizational representation of a philosophy that prizes user solutions above all else.

Challenges In Implementing Talent-Based Strategy

McKinsey notes three challenges for implementing a talent-based strategy. .

First, companies will have to become more courageous. Daring to be ambitious and to make mistakes and then to learn quickly from them will let companies redefine themselves and create a new and improved offer for their customers. Second, they must ensure the transformation is inclusive. Strong commitment from the top that is cascaded down through the organization, empowering all levels to deliver improvementsisessential. Finally, they must ensure the transformation goes far beyond technology. In our extensive experience – and backed up by our survey results – the biggest stumbling block to any transformation is usually the company’s culture. As an automotive OEM executive said: “The issue is not the organizational model, the issue is people and mindsets.

In short, the shift from a strategy-led company to a talent-first company requires fundamental changes in the way CEOs understand the very concept of management--the beginning of a new age.

The Copernican Revolution In Management

Why Agile is eating the world

Explaining Agile

Spotify’s Big Win: Discover Weekly

Can HR Become Agile?

Transforming HR: The Case Of Vistaprint

Scaling organizational agility: key insights from an incumbent firm's agile transformation

Management Decision

ISSN : 0025-1747

Article publication date: 9 March 2023

This paper aims to examine the key challenges experienced and lessons learned when organizations undergo large-scale agile transformations and seeks to answer the question of how incumbent firms achieve agility at scale.

Design/methodology/approach

Building on a case study of a multinational corporation seeking to scale up agility, the authors combined 36 semistructured interviews with secondary data from the organization to analyze its transformation since the early planning period.

The results show how incumbent firms develop and successfully integrate agility-enhancing capabilities to sense, seize and transform in times of digital transformation and rapid change. The findings highlight how agility can be established initially at the divisional level, namely with a key accelerator in the form of a center of competence, and later prepared to be scaled up across the organization. Moreover, the authors abstract and organize the findings according to the dynamic capabilities framework and offer propositions of how companies can achieve organizational agility by scaling up agility from a divisional to an organizational level.

Practical implications

Along with in-depth insights into agile transformations, this article provides practitioners with guidance for developing agility-enhancing capabilities within incumbent organizations and creating, scaling and managing agility across them.

Originality/value

Examining the case of a multinational corporation's exceptional, pioneering effort to scale agility, this article addresses the strategic importance of agility and explains how organizational agility can serve incumbent firms in industries characterized by uncertainty and intense competition.

• Organizational agility
• Agile transformation
• Dynamic capability
• Agile scaling
• Organizational challenge

Hutter, K. , Brendgens, F.-M. , Gauster, S.P. and Matzler, K. (2023), "Scaling organizational agility: key insights from an incumbent firm's agile transformation", Management Decision , Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/MD-05-2022-0650

Emerald Publishing Limited

Copyright © 2023, Katja Hutter, Ferry-Michael Brendgens, Sebastian Peter Gauster and Kurt Matzler

Published by Emerald Publishing Limited. This article is published under the Creative Commons Attribution (CC BY 4.0) licence. Anyone may reproduce, distribute, translate and create derivative works of this article (for both commercial and non-commercial purposes), subject to full attribution to the original publication and authors. The full terms of this licence may be seen at http://creativecommons.org/licences/by/4.0/legalcode

1. Introduction

The ubiquity of digitalization and disruptive business models is currently reshaping industries and challenging many organizations to pursue large-scale transformations to keep pace in today's volatile, fast-moving business environment ( Appelbaum et al. , 2017 ; Parida et al. , 2019 ). Companies' 20th-century models, in which competitive advantage derives from economies of scale, hierarchical structures and complex decision-making processes, are simply no longer fast enough to keep up ( Holbeche, 2018 ). In response, the concept of agility has gained momentum, especially following the emergence of transformational digital technology and its potential to fundamentally change corporations' business models, relationships with customers, competences, products and services and ecosystems ( Bharadwaj et al. , 2013 ; Chan et al. , 2019 ; Oliva et al. , 2019 ). According to Doz et al. (2008, p. 65) , agility is “a higher-order dynamic capability that is built over time” and thus requires being aware of trends and forces, making bold decisions fast and reconfiguring business systems and rapidly redeploying resources. Such higher-order capabilities include the dynamic capabilities of sensing (i.e. the capacity to identify, develop, co-develop and assess new technological opportunities and threats in relation to customers' needs), seizing (i.e. the capacity to mobilize resources to address opportunities and capture value) and transforming (i.e. the capacity to maintain competitiveness via continuous renewal) that are necessary to addressing new opportunities and threats brought forth by today's new technological environment ( Teece et al. , 2016 ).

Several studies have indicated, however, that managers experience severe difficulties with implementing agility across their organizations in large-scale settings, or agility at scale ( Calnan and Rozen, 2019 ; Dikert et al. , 2016 ; Sommer, 2019 ), defined as the ability to spread and drive agility across an entire organization. Likewise, a global study by McKinsey & Company involving more than 2,000 organizations revealed that only approximately 10% of the ones that had recently undergone an agile transformation characterized it as having been highly successful ( Aghina et al. , 2020 ). When executed poorly, agile transformations can cause not only frustration but also intense friction with entrenched legacy systems and other aspects of the organization's culture. Annosi et al . (2020a , b) , for example, have examined potential pitfalls and negative consequences of implementing agility, including a decreased interest in learning and high levels of stress and argued that large-scale adoptions of agile practices often result in problems with team–team coordination. Other potential negative consequences of agile transformations include decreased efficacy in individual performance amid increased pressure to perform, less access to and the weakened accumulation of knowledge related to decentralized team structures, and the reduced integration of knowledge.

Even so, pursuing agility at scale seems to be worth the risks. Prominent corporations such as Amazon, ING Group and Bosch have demonstrated how large-scale agile transformations can be shaped while maintaining traditional functions in parallel with agile units ( Rigby et al. , 2018 ). In fact, companies that are further along in their agile transformations achieve “around 30% gains in efficiency, customer satisfaction, employee engagement, and operational performance” and become five to ten times faster than their less agile competitors ( Aghina et al. , 2020, p. 2 ). Even though the literature and practical examples offer various conceptualizations of agility at the project and organizational levels, incumbent firms continue to struggle to identify the concept that best fits their distinct purposes and to deploy it in ways that achieve agility at scale ( Kalenda et al. , 2018 ).

Thus, identifying appropriate agile practices, methods and frameworks for scaling agility—that is, successfully improving agility across an organization—requires profound knowledge, expertise and understanding. Along those lines, research has addressed the need for tailored, company-specific agile frameworks because agility hinges on organizational complexity, organizational routines and the renewal of key competences ( Annosi et al ., 2020a , b ). In our research, we thus conceived agility at scale as the ability to drive agility at an organizational level but not as a universally applicable concept in practice. Instead, agility at scale requires a set of capabilities involved in not only allocating resources but also dynamically balancing them to manage uncertainty and maintain flexibility over time ( Shams et al. , 2020 ; Teece et al. , 2016 ; Vecchiato, 2015 ; Weber and Tarba, 2014 ) as well as a multilayered analysis of the strategic, organizational, team-focused and leadership levels that fundamentally impact the entire organizational system ( Girod and Kralik, 2021 ).

Although scholars have emphasized the need for further investigation into ways of scaling and thereby enhancing agility in organizations ( Girod and Kralik, 2021 ), there is little conceptualization, let alone empirical evidence, about how or what is needed to achieve agility at scale. Therefore, we investigated the dissemination of agility from a divisional to an organizational level and studied how organizations scale agility. As a result of our investigation, this paper examines the key challenges experienced and lessons learned when organizations undergo large-scale agile transformations and seeks to answer the question of how incumbent firms achieve agility at scale.

To accomplish our objective, we performed a single-case study to understand the implementation of an agile center of competence (ACC) and the scaling of agility across an organization. The case was a multinational financial services company operating in the insurance and asset management industry that has been exposed to rapidly emerging digital technology, changing behavior among customers, increased industry competition and disruptive threats due to the emergence of innovative fintech firms ( Verhoef et al. , 2021 ; Yan et al. , 2018 ). Thus, to keep pace with digital opportunities in today's volatile digital business environment, the company's management announced that the organization would undertake a large-scale transformation—namely, the launch of a global, corporate-wide digitalization agenda and the ensuing opening of an ACC.

By consolidating research on organizational agility and dynamic capabilities, we investigated how an incumbent firm undergoes a large-scale agile transformation and, as a result, can provide a theoretically grounded set of transformative organizational actions as well as several critical lessons for implementing agility. More precisely, by applying the dynamic capabilities framework, we illuminated how an incumbent firm might employ the framework as a means to implement agility and identified a pathway for keeping pace with digital opportunities in the volatile digital business environment. In particular, we analyzed the role of top management in the actions of sensing, seizing and transforming within the context of an agile transformation and identified how two complementary systems, hierarchy and network ( Kotter, 2012 ), are linked through a separate entity—in our case, an ACC—that can serve to accelerate employees' realization of an agile organizational culture and mindset. Herein, we detail how incumbent firms develop and successfully integrate the agility-enhancing capabilities of sensing, seizing and transforming in times of rapid change and uncertainty. By extension, with this article, we contribute to a broader discussion on organizational agility and highlight the importance of merging top management's commitment with the allocation of resources and a mutual understanding of the organization's strategic objectives.

In the remainder of this article, Section 2 outlines the theoretical foundations of dynamic capabilities and organizational agility in the literature. Next, Section 3 explains the case study and its abductive research process, after which Section 4 presents the results of our analysis. Section 5 discusses our findings and condenses them as propositions, after which Section 6 articulates our conclusions, the study's limitations and recommended directions for future research.

2. Theoretical background: dynamic capabilities as a framework for organizational agility

In response to increased global competition, new forms of digital technology, disruptive threats and changing consumer behavior, agility has received considerable attention in practice and in scholarly work on management ( Harraf et al. , 2015 ). However, given agility's emergent nature, scholars and managers continue to debate what agility and agile mean. Table A1 presents agility-related terms that we identified in literature.

Of all of those terms, this article focuses on organizational agility , defined as “the capacity of an organization to efficiently and effectively redeploy/redirect its resources to value creating and value protecting (and capturing) higher-yield activities as internal and external circumstances warrant” ( Teece et al. , 2016, p. 17 ). We understand organizational agility, also termed agility at scale , as the ability to drive agility broadly across organizations via practices, values and behaviors that enable the organizations to become more resilient, flexible and innovative, especially given today's tumultuous markets and the rapid advancement of digital technology ( Teece et al. , 2016 ). In a large-scale study of leaders in digital transformation, organizational agility has been identified as the most important factor of success that differentiates leaders from laggards in the agile transformation ( Brock and von Wangenheimz, 2019 ).

The literature often describes organizational agility as a specific higher-order dynamic capability ( Doz et al. , 2008 ; Lee et al. , 2015 ; Walter, 2021 ), one involving the role of strategic management in integrating, building and reconfiguring competences as a means to continuously adjust and adapt ways of creating and capturing value in light of internal and external circumstances ( Teece et al. , 2016 ). In that context, it is necessary to distinguish ordinary capabilities from dynamic ones ( Winter, 2003 ). On the one hand, ordinary capabilities, characterized as “‘how we earn a living now’ capabilities” ( Winter, 2003, p. 992 ), are needed to produce and sell a (static) set of products or services. On the other, dynamic capabilities enable organizations to exploit opportunities and avoid threats by adapting and/or extending ordinary capabilities that allow them to develop new processes, products and/or services for improved speed, efficiency, or effectiveness ( Drnevich and Kriauciunas, 2011 ). Because organizational agility entails several components—proactivity, change, responsiveness and adaptiveness—in sensing and responding to opportunities ( Lee et al. , 2015 ), as well as involves strategic sensitivity (i.e. an awareness of changes and real-time sense making), leadership unity (i.e. the ability to make bold decisions fast) and resource fluidity (i.e. the ability to reconfigure and redeploy systems and resources rapidly; Doz et al. , 2008 ), it can be regarded as an important dynamic capability. Indeed, as the digital transformation continues to accelerate and amplify uncertainty, volatility and complexity, organizational agility is a critical dynamic capability that incumbent firms need to sense and seize opportunities and, in turn, succeed in their digital transformations.

In the literature on strategic management, dynamic capabilities refers to “the firm's ability to integrate, build, and reconfigure internal and external competences to address rapidly changing environments” ( Teece et al. , 1997, p. 516 ). Those capabilities are reinforced by organizational and managerial competences used to identify and reshape the organizational environment and generate new business models able to address new opportunities or emerging threats ( Eisenhardt and Martin, 2000 ; Ghezzi and Cavallo, 2020 ). Teece (2007) has identified three primary types of dynamic capabilities—sensing, seizing and transforming—that allow companies to compete and survive in the long term while facing fundamental uncertainty due to highly disruptive business models along with rapid technological change.

First, regarding the capability of sensing, environments characterized by uncertainty require organizations to sense fundamental changes and opportunities in advance in order to keep ahead of rivals ( Helfat and Peteraf, 2015 ; Reeves et al. , 2015 ; Schoemaker et al. , 2018 ). In particular, generative sensing capabilities support activities used to identify technological opportunities, analyze markets, listen to customers and formulate hypotheses on how the future might look. They require managerial insights and vision, accompanied by constant research and the probing of customers' needs and technological possibilities to discover new market opportunities ( Teece et al. , 2016 ), which together involve continuous learning, interpretation, scenario planning and creative activity across the organization ( Schoemaker et al. , 2013 ). Beyond that, if markets are impacted by continuous change, then the organization's search activities should be both local and distant ( March and Simon, 1958 ). Using typical practices of open innovation, organizations can also incorporate internal and external stakeholders able to actively contribute their broad expertise and knowledge ( Chesbrough and Appleyard, 2007 ). Further still, they may deploy new approaches or organizational formats—for instance, establishing separate business units and partnerships with accelerators or corporate incubators—that allow combining activities of exploration with activities of exploitation ( Gibson and Birkinshaw, 2004 ; Weiblen and Chesbrough, 2015 ). All of those efforts underscore the relevance of broad-based external processes to search for and identify trends, create hypotheses and contemplate possible future scenarios to plan for ( Teece et al. , 2016 ). Along those lines, in our study we investigated top management's role in sensing changes and opportunities in relation to scaling agility in their organization.

Second, when sensing new technological or market opportunities, organizations have to seize those opportunities by leveraging new products, services and/or processes. Each organization needs to identify an appropriate business model for defining their commercialization strategy and investment priorities ( Agostini and Nosella, 2021 ; Chesbrough, 2010 ). Mastering the mechanism of dynamic transformation thus becomes imperative for creating agile organizational structures and optimally exploiting current market opportunities while simultaneously exploring new ones as they arise due to changing environments and emerging digital technology ( O'Reilly and Tushman, 2011 ). In that context, exploitation relates to continuous improvement and efficient implementation, whereas exploration is linked to experimentation and discovery ( Bodwell and Chermack, 2010 ). However, due to the historically entrenched emphasis on efficiency within stable environments, companies continue to struggle in jointly pursuing exploitation and exploration—the former to ensure their current viability, the latter to ensure their future viability—a combination termed organizational ambidexterity ( Bodwell and Chermack, 2010 ; Tushman and O'Reilly, 1996 ). Scholars have also averred that such ambidexterity can nevertheless create a dilemma, for managers often face difficulties with striking an appropriate balance between the requirements of exploration and of exploitation ( Doz, 2020 ; Lewis et al. , 2014 ). At the same time, efficiency's dependence on organizational structures is nothing new; in fact, research on their relationship dates back to the 1960s ( Doz, 2020 ; Doz and Kosonen, 2010 ), and companies have long been built to maximize efficiency in stable environments, with well-defined and structural systems, hierarchies, roles and responsibilities ( Kotter, 2014 ). On that topic, scholars have also highlighted that mechanistic management systems involving hierarchy, top-down decision-making, efficiency and/or economies of scale, are most suitable for stable conditions ( Burns and Stalker, 1961 ). By contrast, organizations facing today's dynamic, digital business environments need to develop flexible systems of operational routines that incorporate a network structure of control, authority and communication and that are appropriate for shifting conditions ( Burns and Stalker, 1961 ). Because corporations face a wide range of challenges in realizing both exploitative and explorative capabilities and processes ( Burns and Stalker, 1961 ), it is unsurprising when organizations sense a business opportunity but fail to invest in it. Leadership thus plays an obvious role in making quality decisions, communicating goals and mobilizing resources to capture value from future business opportunities. For that reason, in our research we focused on how dual structures can serve as a vehicle to explore, acquire and scale agile practices in a separate organization and what top management's role is in connecting and aligning that organization with the hierarchy.

Third and last, transforming, as a key to sustainable growth, involves continuous renewal by way of “asset alignment, co-alignment, re-alignment and redeployment” ( Teece, 2007, p. 1336 ). To be continuous, transformation requires organizations to adapt routines, restructure departments and/or organizational structures, and be able to recombine and reconfigure tangible as well as intangible assets as markets and technology change ( Teece, 2007 ). Moreover, to overcome radical challenges revealed by sensing and/or seizing activities, organizations can draw on various transformative orchestrated processes ( Teece, 2014 ), which enable them to rearrange and reallocate their resources in accordance with a new strategy and/or develop new resources to supplement current gaps in their resource bases ( Ambrosini and Bowman, 2009 ; Teece, 2014 ). Studies have emphasized top management's crucial role in accelerating organizational change and subsequently increasing a firm's ability to sense and seize new opportunities ( Helfat and Peteraf, 2009 ; Teece et al. , 2016 ). In such research, Harraf et al. (2015) have developed a framework with essential pillars for accelerating the transformation toward organizational agility. One pillar is a common culture, shared values and the importance of a shared organizational vision; the second, linked to benefits of empowerment, is the connection between employees and management; and the third is organizational learning processes that can contribute to a firm's dynamic capabilities and subsequently accelerate its agile transformation ( Harraf et al. , 2015 ). In the same vein, Pisano and Teece (2007) have argued that empowering management practices and entrepreneurial initiatives enables a firm to learn. Meanwhile, the ability to cope with an increasing degree of uncertainty—an ability with significant implications for the entire organizational system—requires strategic thinking, an innovative mindset, the exploitation of change and an unrelenting need to be adaptable and proactive ( Harraf et al. , 2015 ). Encouraging bottom-up entrepreneurial initiatives and interaction among all stakeholders both within and beyond a firm's boundaries can ultimately contribute to the organization's transformation ( Teece, 2007 ).

Therefore, the challenge is transforming incumbent firms that are established in stable environments and have grown complacent as a result of long-standing market dominance into adaptive, flexible organizations ( Kotter, 2014 ). Although theoretically compelling, research on the link between dynamic capabilities and organizational agility remains in its infancy. For that reason, in our study we focused on organizational agility and how a successful digital transformation, understood as a continuous process, should be managed to resolve tensions that arise when employees trained in agility confront rigid routines, cultures and structures of their hierarchical organization.

In this article, standing at the intersection of organizational agility and dynamic capabilities, we offer a framework that explores a mechanism for scaling agility. In particular, because “the pursuit of agility requires sensing, seizing, and transforming” ( Teece et al. , 2016 , p. 26), the framework offers researchers a useful approach to understanding how agility contributes to exploiting opportunities and promoting change, as well as offers managers practical guidance in creating, scaling and managing agility. Accordingly, we detail here how firms develop and successfully integrate agility-enhancing capabilities to sense, seize and transform in times of rapid change and uncertainty.

The framework's contribution is an important one, for many companies struggle in their attempts to scale agility in their organizations ( Rigby et al. , 2018 ). Despite abundant research on agility in small teams, the ways in which companies can develop the dynamic capabilities needed by agile organizations at a relatively large scale remain poorly understood. Although some literature links dynamic capabilities with organizational agility at the conceptual level, the process of developing and scaling agility as such a capability has yet to be examined. That gap in the literature was the focus of our study.

3. Methodology

3.1 research design and data collection.

Our research followed an abductive process by balancing existing theoretical conceptualizations with empirical evidence ( Dubois and Gadde, 2002 ; Ince and Hahn, 2020 ). We considered the abductive process to be suitable for our study because it applies a theory for explaining a phenomenon but not either purely inductively or purely deductively ( Spens and Kovács, 2006 ). In that sense, our research was aimed at “generating novel theoretical insights that reframe empirical findings in contrast to existing theories” ( Timmermans and Tavory, 2012, p. 174 ).

Our research consisted of a single-case study conducted to understand how an incumbent firm implements an agile transformation at scale ( Yin, 2017 ). Allowing a profound understanding of real-world phenomena that are too complex for surveys, case studies are especially suitable for comprehensively exploring an event to test a proposed theoretical, or conceptual setting ( Cha et al. , 2015 ; Ridder et al. , 2014 ; Yin, 2017 ). In this section, we describe the primary steps of our study, the research context and our methods of collecting and analyzing data.

The company under study is a multinational corporation offering financial services that operates in major markets in the insurance and asset management industry. With offices in approximately 70 countries and more than 150,000 employees worldwide, the company is characterized by distinct business divisions that are hierarchical and managed across several tiers. Although the corporation ranks among the top players in the global market for insurance and asset management, the insurance sector in general is exposed to rapidly emerging digital technology, changing behavior among customers and increased industry competition, along with disruptive threats due to the emergence of innovative fintech firms ( Yan et al. , 2018 ). In its shareholder presentation in 2016, the company reported that many of its divisions had already experienced more than 50% business growth in digital markets and a nearly 90% increase in reach supported by social media, as well as expected revenues to grow by more than 30% within the next four years. Thus, the company's milestones were clearly set. However, reaping the benefits of digital business in 2018 and beyond has required a foundation for accelerating and embedding a digital culture. Consequently, management initiated a large-scale agile transformation in 2016 to keep pace with digital opportunities in the volatile digital business environment. Indeed, as a case, the company was chosen due to its experience with two major events: the launch of a global, corporate-wide agile transformation agenda publicly announced at a shareholder conference and the ensuing opening of ACCs. For the latter event, our research team was granted internal access to the company's data, facilities and meetings.

To explore the phenomenon of scaling agility within organizations, we gathered data from various sources to ensure construct validity and data triangulation ( Yin, 2014 ). We developed a semistructured interview guide, tested it and conducted 36 interviews at three time points from 2018 to 2021 in order to gain insights into the context of scaling agility and the agile transformation. In line with previous research, we chose semistructured interviews to enable open and follow-up questions about the topic ( Venkatesh et al ., 2021 ; Cooper and Schindler, 2008 ).

Interviewees were purposively selected based on their experience with and perception of the phenomenon ( Cooper and Schindler, 2003 ), and our sample included personnel with a broad spread of roles and qualifications. Several were internal employees with hands-on knowledge about practicing agile methods, including developers, product owners, stakeholders of scrum teams and agile masters as well as coaches with the expertise to enable others to scale agility. We also interviewed managers and employees who were currently confronting with the agile transformation agenda. Table A2 details the demographics of the employees interviewed in our study; for confidentiality's sake, they are referred to as ID1, ID2 and so on, up to ID36.

The interviews were conducted over the phone or in person, lasted 45–60 min on average and were recorded and transcribed. In all interviews, we followed suggestions for empirical social research and study design ( Eisenhardt, 1989 ; Yin, 2003 ). As a result, our interview guide had five primary sections. First, we addressed the implementation of agile practices to gain an understanding of agility and appropriate areas for its adoption in the organization. Second, we analyzed the setup of the company's ACC (e.g. the extension of agility into other areas of the organization or challenges that arose with agile practices). Third, the interviews focused on the vision and perception of agile organizations and, fourth, the design of the agile transformation in terms of roadmap planning, the role of management and the means used to disseminate agile practices. We also asked interviewees about obstacles, barriers and solutions that arose in the process of disseminating agility. The fifth and final section addressed requirements and necessary changes for the ongoing transformation to succeed. Altogether, we were able to probe different aspects of agility, scaling and organizational change during the interviews. Because we conducted interviews at three time points in the agile transformation, we slightly adapted the interview guide to follow a specific focus along the agile transformation process. Table A3 details the themes of the interview guide and when its various parts were used during our research.

According to Tellis (1997, p. 3) , “Consideration must be given to construct validity, internal validity, external validity, and reliability.” To ensure reliability, we therefore developed a formal case study protocol. Meanwhile, to increase validity, secondary data were consulted along with the primary data as a means to refine our findings ( Gerbl et al. , 2015 ; Yin, 2017 ). Sources of secondary data included the company's internal and public presentations, annual reports and relevant handbooks, along with data archived on the company's website regarding its agile transformation and key strategic objectives, onboarding information for employees, training materials, press releases and industry journals. We triangulated all of the data from the primary and secondary sources following the steps outlined by Tellis (1997) . By utilizing multiple data sources alongside a research protocol for a single-case study, we increased the overall construct validity and consistency ( Yin, 1994 ). Moreover, we reduced the risk of researcher bias by taking data from various sources and thereby ensured the rigor and richness of our findings ( Eisenhardt, 1989 ; Yin, 2003 ).

3.2 Data analysis

In data analysis, we manually coded the data in an iterative process consisting of testing, comparing and retesting each other's codes to reduce intercoder discrepancies. All coders were experienced in the field as well as in applied content analysis ( Duriau et al. , 2007 ). During coding, the coding guidelines were constantly refined, based on mutual exchange and aligned with interpretations of the codes following a two-step process ( Venkatesh et al. , 2021 ). First, we created first-order codes based on interviews with agile experts. For instance, a recurring theme was “Customer value orientation” following market intelligence from new offerings from competitors. That theme was merged into the first-order code “Customer and market signals.” Data management software was used to manually analyze interview data. Second, we derived literature-based codes as overarching themes based on theoretical concepts. For that purpose, we searched and reviewed literature on agility, digitalization and dynamic capabilities. In analyzing the literature and investigating theories, methods and results, we iteratively moved back and forth between first-order codes and overarching themes to derive second-order code categories ( Murphy et al. , 2017 ). The coding scheme is illustrated in Figure A1 . With reference to our coding framework, we paraphrased individual statements, generalized them and derived our results ( Mayring, 2015 ). Figure 1 illustrates the study's abductive research process.

4. Findings

In this section, we present the results of our data analysis by highlighting exemplary quotations that emerged from the interviews. First, we illustrate the firm's identification of opportunities and threats as a major trigger for its transformation and highlight its strategic response. Second, we explore how the ACC's setup contributed to cultivating agility and related competences, and, third, we focus on the dissemination of agility across the organization.

4.1 Sensing: exploring opportunities and threats

So, if you have competitors such as Google or Amazon, then you have to be able to move faster, and you cannot do that with a traditional approach. (ID19).

I see a threat from fintech firms trying to dig into our business model or in that other insurers have long since jumped on the agile bandwagon and designed their products much faster and more flexibly. (ID22).

That means that if we, as an enterprise, cannot change quickly, we will die out sooner or later. (ID16).

Clearly, the insurance industry is no longer separate from everyone else. If Netflix's customers can cancel their subscriptions quickly, then why do I have to write a letter to an insurance company? Even if I am lucky enough to meet a cancelation deadline, or have to do that three months in advance, then I have to wait another six months until I get an answer. (ID19).

The goal is to be the market leader and to be the biggest. That means we have to get to markets faster with swifter product cycles and perhaps also simpler products that customers can choose on the Internet without having any insurance expertise. (ID22).

As long as we are hierarchically equipped, we are not customer-centric. As long as we report upward in the hierarchy, we are not committed to the customer. That is why the process of becoming agile is sensible, because only then can you really understand the customers' needs and really align all of your actions accordingly and deliver faster. (ID14).

The greatest benefit that agility can yield is creating end-to-end responsibility… across departments, maybe across companies,… to work better with each other and not against each other. (ID21).

Another prevailing drive was to level up against competitors along the entire value chain. However, despite recognizing market pressure and the virtues of following an agile approach, members of the organization reported experiencing difficulties and uncertainties with the agile transformation agenda. In fact, numerous internal debates about how to change the multinational corporation had arisen following its failed bottom-up initiative a few years prior. According to the company's data, a first agile transformation approach failed to garner support from a sufficient number of employees due to management's lack of commitment in the form of attributed importance, understanding and driving force. Regarding that initial attempt, one interviewee indicated that management had not recognized the concerns of personnel who require clear direction throughout the transformation. As a department lead added, “We really need a fundamental decision from the very top. At least the CIO should say—even better the CEO—“Well, that is where we want to go” (ID14).

Ultimately, the matter was addressed at a turning point in the transformation process, when the CEO publicly claimed to be a front-and-center part of that process, not a victim. The CEO's claim heralded a further push for digitalization by shaping and organizing the corporation, via an agile transformation, into a fully customer-centric, end-to-end digital company. Based on an agile approach, the goal involved enhancing flexibility in reacting to market changes and adapting the product portfolio accordingly. The agile transformation received a budget of up to €700 million, partly to establish ACCs, which were expected to promote the digitalization of the company's product portfolio. It also promised to address both the back-end software calculation of insurance rates and the front-end user interface, particularly with new channels such as insurance apps on smartphones. Figure 2 illustrates the incumbent firm's agile transformation agenda, including the transformation's detailed strategic objectives announced publicly at a shareholder meeting in 2016 and the founding principles of the first ACC launched in 2017.

Under the guiding principles of driving digital initiatives, becoming centers of digital knowledge and fostering digital culture, ACCs embody the agile transformation. The mentioned guiding principles were again substantiated by the six pillars that formed the foundation of an understanding of agility on the teams. From a business side, the product teams in the ACCs would address both the back-end software's calculation of insurance rates as front-end user interfaces, with new channels such as insurance apps on smartphones. Thus, business divisions were able to allocate complete units from an end-to-end perspective in the new setting.

Additional prominent examples of sensing, including activities to identify technological opportunities, analyze markets, listen to customers and formulate hypotheses on how the future might look, appear in Table A4 .

4.2 Seizing: scaling agility with an agile center of competence (ACC)

I think that hardware and infrastructure formed the basis of a lot of our problems at the beginning, when we made a lot of progress. It was not clear what kind of workstation equipment was available or what kind of technical infrastructure the teams used, meaning stuff like the continuous integration platform, cloud environment, and that kind of thing, not to mention how the rooms were equipped. (ID03).

It is still not clear to me what problem we are trying to solve by making the entire organization agile. That is why it seems to me that we are now going agile because it is cool and because everyone's doing it. Sometimes, it was a bit more like we wanted to become more efficient. So, the question is whether you need agility to do that. (ID18).

Other critical voices pointed out that best practices borrowed from born-agile companies would eventually collide with traditional hierarchy-based structures, culture and leadership models. In response, management has sought to acknowledge entrenched legacy systems and introduced a dual-speed architecture. On the one hand, because the existing operations model with established hierarchies, workflows and functions cannot be dismantled, it is instead maintained for the ongoing exploitation of business. On the other, in a separate organizational setting, agile approaches can be explored, acquired and scaled while being segregated from pre-existing structures. Overall, the ACC combines a pool of newly introduced work approaches and the space to experiment while maintaining distance from traditional organizational proceedings. Indeed, that purpose guided the foundation of the ACC, which was established at an external location at a certain distance from headquarters and built on six pillars of agility. Table 1 details the six pillars structuring the ACC, all of which originate from a user manual within our secondary data intended as an onboarding handbook for employees joining the ACC.

Above all, the organization's way of discussing, finding consensus and dealing with fundamentally new roles and processes yielded new forms of collaboration. With the emergence of new roles and positions unlike the functions within the preexisting organizational model, extensive expertise needed to be accessed from external consultants. The influx of external facilitators combined with a steep learning curve in practices enabled an initial functional version of the ACC. Little by little, teams received necessary support with testing new work methods and started to successfully devise products in lean, agile processes. In a rather brief period, the popularity of the ACC increased rapidly, and the number of teams working in the facility has more than doubled over time. During our first round of interviews, an IT consultant noted, “We currently have only 22 agile teams, which accounts for approximately 5–8% of our overall portfolio” (ID23). Two years later, however, internal company data evidenced that the number had increased to as many as 50 teams. Given those results, the corporation founded a second ACC at another location, and three years since its opening, approximately 400 people were working in a special digital division with 50 agile teams.

Integrating the product into the overall product landscape is very challenging and still one of the biggest barriers, because it is outside the team setting and therefore dominated by classic project management. (ID17).

Where challenges are most likely to be observed is in contact with the outside world—units that have not gone agile. In the past, we were used to knowing more or less precisely what was going to happen and when in the next two years. Now, we again want to have that pseudo-certainty in planning while suppressing the fact that those plans usually become quickly outdated, change, or have to be discarded. (ID14).

Meanwhile, the branching out of teams from the ACC and its integration into the larger organizational setting turned out to be a concern. Table A4 shows exemplary quotations about agility-oriented seizing and scaling capabilities in the ACC.

4.3 Transforming: disseminating agility across the organization

How would I scale agility? I would stick to the ACC concept for the time being. So, I would say every team, no matter where it comes from… has to go through the ACC. And, for me, that means two tasks: the managers have to provide a framework. They have to provide the system that allows agile working. And the second step is that people have to understand what is required of them. They also have to be trained. (ID23).

For the agile transformation to succeed, developing an appropriate scaling framework and embedding it in the organizational structure proved to be pivotal. Because all frameworks for scaling agile methods vary in complexity, there is no one-size-fits-all framework, and different requirements have to be considered. The concrete task for top management was thus to expand agility from the project to the organizational level. Our findings clarify, however, that agility can be achieved only with continuous transformation-oriented effort and is linked to adapting routines, effecting cultural change, modifying structures and being able to reconfigure assets. Therefore, to disseminate agility, the firm trained personnel from the hierarchy-based structure in the facility and thereby imparted capabilities essential to working on an agile team. Despite the relevance of that approach—after all, achievements in agility heavily depend on employees' knowledge, capabilities and access to information—concerns remained about integrating agile projects at an organizational level in ways that would yield business value without interfering with legacy structures. Simply returning newly formed agile teams that had compiled new product features into a rigid, non-agile environment characterized by traditional thinking and working would have proven dysfunctional. For that reason, a new design needed to be established to assimilate the organization's agile project-driven endeavors, and, in doing so, equal standards had to be imposed to create the same prerequisites for work across organizational divisions. Thus, following the standards built on the six pillars of the ACC's foundation, digital equipment, office space design and team constellations became increasingly similar across different sites and organizational units.

We are not going to say, “Well, we are done with the transformation now. We are an agile company now.” Instead, the objective would be achieving a state where we can admit that we are never finished. Every day, we face a demand for something new, but now we have the ability to change. (ID16).

The agile transition from static models to truly adaptive organizations is a multilayer endeavor in which agile capabilities are employed and continuously developed. Figure 3 illustrates the incumbent firm's ongoing agile transformation and highlights the dissemination of the three pillars of agility achieved by using an ACC, which can strategically serve as an accelerator of organizational agility.

As shown in Figure 3 , employees from the incumbent firm's various divisions were transferred to the ACC to learn about agile practices and receive intensive hands-on experience. Following the six mentioned pillars, they work as product owners, developers and agile masters on certain digital products following agile practices. After a given period or a major event (e.g. the launch of an application), employees are relocated outside the ACC with the aim of disseminating agile practices and the accompanying mindset across the organization. Since our first inquiry, hundreds of employees have undergone that process as part of the firm's agile transformation to scale organizational agility. Exemplary quotations on transforming and disseminating agility across the organization appear in Table A4 .

5. Discussion

This article illustrates how an incumbent firm has transformed while scaling agility broadly across the organization as a means to cope with challenges presented by disruptive digital technology, tumultuous markets and rapidly changing business environments. Our case study revealed a sizeable gap between the popularity of the concept of agility and understandings of the underlying principles of agile scaling and agility-enhancing capabilities. As a result of our detailed application of Teece et al. ’s (2016) dynamic capabilities framework, we revealed the agility-enhancing capabilities of sensing, seizing and transforming in the organization in times of digital transformation and change. Table 2 shows how such an incumbent firm can employ the framework as a means to identify pathways of agile practices to implement agility throughout the organization. In what follows, we abstract and organize the findings according to the framework and offer propositions about how companies can achieve organizational agility by scaling up agility from a divisional toward an organizational level.

5.1 Exploring the fit between market signals and internal capabilities

Top management needs to develop sensing capabilities using formal and informal sources inside and outside the organization to clearly view digital opportunities and threats, to understand how they affect the business model, and to set a clear direction for digital transformation.

5.2 Mobilizing resources to scale agility

The successful scaling of agility requires dual structures, in which agile practices are explored, acquired and scaled in a separate organization, launched and sponsored by top management, and with top management's support, connected and aligned with the hierarchy.

5.3 Managing an agile transformation

Successful transformation needs to be understood as a continuous process that requires (a) top management's extensive efforts in addressing the challenges that employees trained in agility face when confronted with rigid routines, cultures and structures of the hierarchy-based organization; (b) continuous direction and support for their integration back in the hierarchy; and (c) a clear communication strategy.

6. Conclusion

Organizational agility is not a one-size-fits-all solution precisely because requirements for agility are sensitive to the organizational context ( Teece et al. , 2016 ). Therefore, a general framework is needed that gives managers guidance in their decision-making about agile activities and how to scale them. In our research, applying the dynamic capabilities framework to study and understand agile transformation proved to be very useful ( Teece et al. , 2016 ) and revealed that a successful agile transformation requires a specific set of activities in sensing, seizing and transforming. As described in the literature on dynamic capabilities, sensing is a necessary but insufficient condition for a successful agile transformation ( Schoemaker et al. , 2018 ). Sensing activities have to be complemented with “new systems that take advantage of external changes” ( Schoemaker et al. , 2018, p. 21 )—in our case study, an ACC. For an agile transformation to be sustainable, routines, structures and assets need to be adapted ( Teece, 2007 ). As revealed by our case study, however, organizational agility as a dynamic capability is difficult to develop and scale in organizations. In response, the dynamic capabilities framework offers a useful guideline that managers can follow to decide which activities are needed for sensing, seizing and transforming in order to achieve agility at scale.

Our findings contribute to the literature on organizational agility by showing how an organization can disseminate agility in a large-scale setting. We provide a theoretically grounded set of actions oriented toward organizational transformation drawn from the dynamic capability's framework, actions that focus on the organization's ability to sense market opportunities and threats and to exploit them by reconfiguring resources, processes and structures, all to adapt to a changing environment. Following Teece et al. ’s (2016) dynamic capabilities framework of sensing, seizing and transforming, we have identified assorted transformative actions, an endeavor that extends literature on agility as a dynamic capability ( Doz et al. , 2008 ; Lee et al. , 2015 ; Walter, 2021 ) and highlights the role of top management for successfully scaling it. Our work also complements research investigating the role of dynamic capabilities for digital transformation (e.g. Warner and Wäger, 2019 ) adding the role of agility for sensing, seizing and digitally transforming. On top of that, we also contribute to the idea of dual structures ( Kotter, 2012 , 2014 ) by showing how the concept can be used to address the challenges of scaling agile in a hierarchy.

Our study has yielded several practical insights. First, our findings indicate that corporations need to develop capabilities in sensing, seizing and transforming in order to be more resilient and flexible when external events require rapid adaption. For instance, to put sensing capabilities into practice, managers should regularly cooperate and maintain proximity with external stakeholders by conducting workshops to anticipate future threats and opportunities. Second, the allocation of resources (i.e. seizing) is related to top management's strong commitment to capturing value from emerging opportunities and implementing a clear communication strategy to do so. Third, incumbent firms should incorporate network structures in parallel to their hierarchical ones, ideally a separate agile entity characterized by flat, decentralized structures with novel roles entrenched in the established system. We believe that such an approach can accelerate the transformation to organizational agility. To aid such endeavors, Figure 4 provides practical guidance for organizations and executives to achieve better organizational agility. Therein, based on our discussion, we developed a sequence of questions that incumbent firms could walk through to develop and successfully integrate agility-enhancing capabilities to sense, seize and transform in times of digital transformation.

Our findings come with some limitations that offer opportunities for future research. First, we extensively studied the transformation of an incumbent firm toward agility; however, lingering criticism of the case-study methodology's dependence on single cases precludes any generalizing conclusions ( Tellis, 1997 ). Second, while the time frame of four years allowed an in-depth understanding of the transformation process, it did not allow observing the full transformation. Third, another limitation may be potential bias due to our study's focus on a single industry. In that light, we encourage scholars to conduct empirical studies at a larger scale in different settings to examine congruency among results.

The Study's abductive research process

Agile transformation agenda

Incumbent's ongoing agile transformation process

Guidelines for achieving organizational agility for practitioners

Coding scheme

The six pillars of the agile center of competence (ACC)

Incumbent Firm's sensing, seizing, and transforming activities

Agility-related terms

Demographics of the Interviewees

Interview guide

Additional quotes from findings

Aghina , W. , Handscomb , C. , Ludolph , J. , Rona , D. and West , D. ( 2020 ), Enterprise Agility: Buzz or Business Impact? , McKinsey & Company , 20 March , available at: https://www.mckinsey.com/ business-functions/organization/our-insights/enterprise-agility- buzz-or-business-impact

Agostini , L. and Nosella , A. ( 2021 ), “ Industry 4.0 and business models: a bibliometric literature review ”, Business Process Management Journal , Vol.  27 No.  5 , pp.  1633 - 1655 .

Ambrosini , V. and Bowman , C. ( 2009 ), “ What are dynamic capabilities and are they a useful construct in strategic management? ”, International Journal of Management Reviews , Vol.  11 No.  1 , pp.  29 - 49 .

Annosi , M.C. , Foss , N. and Martini , A. ( 2020a ), “ When agile harms learning and innovation: (And what can be done about it) ”, California Management Review , Vol.  63 No.  1 , pp.  61 - 80 .

Annosi , M.C. , Martini , A. , Brunetta , F. and Marchegiani , L. ( 2020b ), “ Learning in an agile setting: a multilevel research study on the evolution of organizational routines ”, Journal of Business Research , Vol.  110 , pp.  554 - 566 .

Appelbaum , S. , Calla , R. , Desautels , D. and Hasan , L. ( 2017 ), “ The challenges of organizational agility (part 1) ”, Industrial and Commercial Training , Vol.  49 No.  1 , pp.  6 - 14 .

Bharadwaj , A. , El Sawy , O.A. , Pavlou , P.A. and Venkatraman , N.V. ( 2013 ), “ Digital business strategy: toward a next generation of insights ”, MIS Quarterly , Vol.  37 No.  2 , pp.  471 - 482 .

Bodwell , W. and Chermack , T.J. ( 2010 ), “ Organizational ambidexterity: integrating deliberate and emergent strategy with scenario planning ”, Technological Forecasting and Social Change , Vol.  77 No.  2 , pp.  193 - 202 .

Brock , J.K.U. and von Wangenheimz , F. ( 2019 ), “ Demystifying AI: what digital transformation leaders can teach you about realistic artificial intelligence ”, California Management Review , Vol.  61 No.  4 , pp.  110 - 134 .

Brown , J.L. and Agnew , N.M. ( 1982 ), “ Corporate agility ”, Business Horizons , Vol.  25 No.  2 , pp.  29 - 33 .

Burns , T. and Stalker , G.M. ( 1961 ), The Management of Innovation , Tavistock , London .

Calnan , M. and Rozen , A. ( 2019 ), “ ING's agile transformation – teaching an elephant to race ”, Journal of Creating Value , Vol.  5 No.  2 , pp.  190 - 209 .

Cha , K.J. , Hwang , T. and Gregor , S. ( 2015 ), “ An integrative model of IT-enabled organizational transformation A multiple case study ”, Management Decision , Vol.  53 No.  8 , pp.  1755 - 1770 .

Chan , C.M.L. , Teoh , S.Y. , Yeow , A. and Pan , G. ( 2019 ), “ Agility in responding to disruptive digital innovation: case study of an SME ”, Information Systems Journal , Vol.  29 No.  2 , pp.  436 - 455 .

Chesbrough , H. ( 2010 ), “ Business model innovation: opportunities and barriers ”, Long Range Planning , Vol.  43 Nos 2-3 , pp.  354 - 363 .

Chesbrough , H. and Appleyard , M. ( 2007 ), “ Open innovation and strategy ”, California Management Review , Vol.  50 No.  1 , pp.  57 - 76 .

Cooper , D. and Schindler , P. ( 2003 ), Business Research Methods , McGraw-Hill , New York .

Cooper , D. and Schindler , P. ( 2008 ), Business Research Methods , 10th ed. , McGraw-Hill/Irwin , New York .

Day , G.S. and Schoemaker , P.J.H. ( 2004 ), “ Driving through the fog: managing at the edge ”, Long Range Planning , Vol.  37 No.  2 , pp.  127 - 142 .

Denning , S. ( 2016 ), “ How to make the whole organization Agile ”, Strategy and Leadership , Vol.  44 No.  4 , pp.  10 - 17 .

Dikert , K. , Paasivaara , M. and Lassenius , C. ( 2016 ), “ Challenges and success factors for large-scale agile transformations: a systematic literature review ”, Journal of Systems and Software , Vol.  119 , pp.  87 - 108 .

Doz , Y.L. ( 2020 ), “ Fostering strategic agility: how individual executives and human resource practices contribute ”, Human Resource Management Review , Elsevier , Vol.  30 No.  1 , 100693 .

Doz , Y.L. and Kosonen , M. ( 2010 ), “ Embedding strategic agility: a leadership agenda for accelerating business model renewal ”, Long Range Planning , Vol.  43 Nos 2-3 , pp.  370 - 382 .

Doz , Y. , Doz , Y.L. and Kosonen , M. ( 2008 ), Fast Strategy: How Strategic Agility Will Help You Stay Ahead of the Game , Pearson Education , Harlow .

Drnevich , P.L. and Kriauciunas , A.P. ( 2011 ), “ Clarifying the conditions and limits of the contributions of ordinary and dynamic capabilities to relative firm performance ”, Strategic Management Journal , Vol.  32 No.  3 , pp.  254 - 279 .

Dubois , A. and Gadde , L.E. ( 2002 ), “ Systematic combining: an abductive approach to case research ”, Journal of Business Research , Vol.  55 No.  7 , pp.  553 - 560 .

Duriau , V.J. , Reger , R.K. and Pfarrer , M.D. ( 2007 ), “ A content analysis of the content analysis literature in organization studies: research themes, data sources, and methodological refinements ”, Organizational Research Methods , Vol.  10 No.  1 , pp.  5 - 34 .

Eisenhardt , K.M. ( 1989 ), “ Building theories from case study research ”, Academy of Management Review , Vol.  14 No.  4 , pp.  532 - 550 .

Eisenhardt , K.M. and Martin , J.A. ( 2000 ), “ Dynamic capabilities: what are they? ”, Strategic Management Journal , Vol.  21 Nos 10-11 , pp.  1105 - 1121 .

Gerbl , M. , McIvor , R. , Loane , S. and Humphreys , P. ( 2015 ), “ A multi-theory approach to understanding the business process outsourcing decision ”, Journal of World Business , Vol.  50 No.  3 , pp.  505 - 518 .

Ghezzi , A. and Cavallo , A. ( 2020 ), “ Agile business model innovation in digital entrepreneurship: lean startup approaches ”, Journal of Business Research , Vol.  110 , pp.  519 - 537 .

Gibson , C.B. and Birkinshaw , J. ( 2004 ), “ The antecedents, consequences, and mediating role of organizational ambidexterity ”, Academy of Management Journal , Vol.  47 No.  2 , pp.  209 - 226 .

Girod , S.J.G. and Kralik , M. ( 2021 ), Resetting Management: Thrive with Agility in the Age of Uncertainty , Kogan Page , London .

Harraf , A. , Wanasika , I. , Tate , K. and Talbott , K. ( 2015 ), “ Organizational agility ”, Journal of Applied Business Research , Vol.  31 No.  2 , pp.  675 - 686 .

Helfat , C.E. and Peteraf , M.A. ( 2009 ), “ Understanding dynamic capabilities: progress along a developmental path ”, Strategic Organization , Vol.  7 No.  1 , pp.  91 - 102 .

Helfat , C.E. and Peteraf , M.A. ( 2015 ), “ Managerial cognitive capabilities and the microfoundations of dynamic capabilities ”, Strategic Management Journal , Vol.  36 No.  6 , pp.  831 - 850 .

Holbeche , L. ( 2018 ), The Agile Organization: How to Build an Engaged, Innovative and Resilient Business , Kogan Page , New York .

Holbeche , L. ( 2019a ), “ Shifts in organizational culture when implementing agility ”, Journal of Creating Value , Vol.  5 No.  2 , pp.  124 - 138 .

Holbeche , L. ( 2019b ), “ Designing sustainably agile and resilient organizations ”, Systems Research and Behavioral Science , Vol.  36 No.  5 , pp.  668 - 677 .

Ince , I. and Hahn , R. ( 2020 ), “ How dynamic capabilities facilitate the survivability of social enterprises: a qualitative analysis of sensing and seizing capacities ”, Journal of Small Business Management , Vol.  58 No.  6 , pp.  1256 - 1290 .

Kalenda , M. , Hyna , P. and Rossi , B. ( 2018 ), “ Scaling agile in large organizations: practices, challenges, and success factors ”, Journal of Software: Evolution and Process , Vol.  30 No.  10 , e1954 .

Kotter , J.P. ( 2012 ), “ Accelerate! ”, Harvard Business Review , Vol.  90 No.  11 , pp.  44 - 52 .

Kotter , J.P. ( 2014 ), “ Seizing opportunities and dodging threats with a dual operating system ”, Strategy and Leadership , Vol.  42 No.  6 , pp.  10 - 12 .

Lee , O.K. , Sambamurthy , V. , Lim , K.H. and Wei , K.K. ( 2015 ), “ How does IT ambidexterity impact organizational agility? ”, Information Systems Research , Vol.  26 No.  2 , pp.  398 - 417 .

Lewis , M.W. , Andriopoulos , C. and Smith , W.K. ( 2014 ), “ Paradoxical leadership to enable strategic agility ”, California Management Review , Vol.  56 No.  3 , pp.  58 - 77 .

March , J.G. and Simon , H.A. ( 1958 ), Organizations , Wiley , New York .

Mayring , P. ( 2015 ), “ Qualitative content analysis: theoretical background and procedures ”, in Bikner-Ahsbahs , A. , Knipping , C. and Presmeg , N. (Eds), Approaches to Qualitative Research in Mathematics Education , Springer , London , pp.  365 - 380 .

Meredith , S. and Francis , D. ( 2000 ), “ Journey towards agility: the agile wheel explored ”, The TQM Magazine , Vol.  12 No.  2 , pp.  137 - 143 .

Murphy , C. , Klotz , A.C. and Kreiner , G.E. ( 2017 ), “ Blue skies and black boxes: the promise (and practice) of grounded theory in human resource management research ”, Human Resource Management Review , Vol.  27 No.  2 , pp.  291 - 305 .

Oliva , F.L. , Couto , M.H.G. , Santos , R.F. and Bresciani , S. ( 2019 ), “ The integration between knowledge management and dynamic capabilities in agile organizations ”, Management Decision , Vol.  57 No.  8 , pp.  1960 - 1979 .

O'Reilly , C. and Tushman , M.L. ( 2011 ), “ Organizational ambidexterity in action: how managers explore and exploit ”, California Management Review , Vol.  53 No.  4 , pp.  5 - 22 .

Parida , V. , Sjödin , D. and Reim , W. ( 2019 ), “ Reviewing literature on digitalization, business model innovation, and sustainable industry: past achievements and future promises ”, Sustainability , Vol.  11 No.  2 , 391 .

Pisano , G.P. and Teece , D.J. ( 2007 ), “ How to capture value from innovation: shaping intellectual property and industry architecture ”, California Management Review , Vol.  50 No.  1 , pp.  278 - 296 .

Prange , C. ( 2021 ), “ Agility as the discovery of slowness ”, California Management Review , Vol.  63 No.  4 , pp.  27 - 51 .

Ravichandran , T. ( 2018 ), “ Exploring the relationships between IT competence, innovation capacity and organizational agility ”, The Journal of Strategic Information Systems , Vol.  27 No.  1 , pp.  22 - 42 .

Reeves , M. , Zeng , M. and Venjara , A. ( 2015 ), “ The self-tuning enterprise ”, Harvard Business Review , Vol.  93 No.  6 , pp.  77 - 83 .

Ridder , H.G. , Hoon , C. and McCandless Baluch , A. ( 2014 ), “ Entering a dialogue: positioning case study findings towards theory ”, British Journal of Management , Vol.  25 No.  2 , pp.  373 - 387 .

Rigby , D.K. , Sutherland , J. and Noble , A. ( 2018 ), “ Agile at scale ”, Harvard Business Review , Vol.  96 No.  3 , pp.  88 - 96 .

Schoemaker , P.J.H. , Day , G.S. and Snyder , S.A. ( 2013 ), “ Integrating organizational networks, weak signals, strategic radars and scenario planning ”, Technological Forecasting and Social Change , Vol.  80 No.  4 , pp.  815 - 824 .

Schoemaker , P.J.H. , Heaton , S. and Teece , D. ( 2018 ), “ Innovation, dynamic capabilities, and leadership ”, California Management Review , Vol.  61 No.  1 , pp.  15 - 42 .

Shams , R. , Vrontis , D. , Belyaeva , Z. , Ferraris , A. and Czinkota , M.R. ( 2020 ), “ Strategic agility in international business: a conceptual framework for ‘agile’ multinationals ”, Journal of International Management , Vol.  27 No.  1 , 100737 .

Sherehiy , B. , Karwowski , W. and Layer , J.K. ( 2007 ), “ A review of enterprise agility: concepts, frameworks, and attributes ”, International Journal of Industrial Ergonomics , Vol.  37 No.  5 , pp.  445 - 460 .

Sommer , A.F. ( 2019 ), “ Agile transformation at LEGO Group: implementing agile methods in multiple departments changed not only processes but also employees' behavior and mindset ”, Research Technology Management , Vol.  62 No.  5 , pp.  20 - 29 .

Spens , K.M. and Kovács , G. ( 2006 ), “ A content analysis of research approaches in logistics research ”, International Journal of Physical Distribution and Logistics Management , Vol.  36 No.  5 , pp.  374 - 390 .

Stadler , C. , Hautz , J. , Matzler , K. and von den Eichen , S.F. ( 2021 ), Open Strategy: Mastering Disruption from outside the C-Suite , MIT Press , Cambridge, MA .

Teece , D. ( 2007 ), “ Explicating dynamic capabilities: the nature and microfoundations of (sustainable) enterprise performance ”, Strategic Management Journal , Vol.  28 No.  13 , pp.  1319 - 1350 .

Teece , D. ( 2014 ), “ The foundations of enterprise performance: dynamic and ordinary capabilities in an (economic) theory of firms ”, Academy of Management Perspectives , Vol.  28 No.  4 , pp.  328 - 352 .

Teece , D. , Pisano , G. and Shuen , A. ( 1997 ), “ Dynamic capabilities and strategic management ”, Strategic Management Journal , Vol.  18 No.  7 , pp.  509 - 533 .

Teece , D. , Peteraf , M. and Leih , S. ( 2016 ), “ Dynamic capabilities and organizational agility: risk, uncertainty, and strategy in the innovation economy ”, California Management Review , Vol.  58 No.  4 , pp.  13 - 35 .

Tellis , W. ( 1997 ), “ Application of a case study methodology ”, The Qualitative Report , Vol.  3 No.  3 , pp. 1 - 19 .

Timmermans , S. and Tavory , I. ( 2012 ), “ Theory construction in qualitative research: from grounded theory to abductive analysis ”, Sociological Theory , Vol.  33 No.  3 , pp.  167 - 186 .

Tushman , M.L. and O'Reilly , C.A. III ( 1996 ), “ Ambidextrous organizations: managing evolutionary and revolutionary change ”, California Management Review , Vol.  38 No.  4 , pp.  8 - 29 .

Tushman , M.L. and O'Reilly , C.A. III ( 2002 ), Winning through Innovation: A Practical Guide to Leading Organizational Change and Renewal , Harvard Business School Press , Boston, MA .

Vecchiato , R. ( 2015 ), “ Creating value through foresight: first mover advantages and strategic agility ”, Technological Forecasting and Social Change , Vol.  101 , pp.  25 - 36 .

Venkatesh , V.C. , Dasgupta , M. , Prashar , A. and Andersen , T.J. ( 2021 ), “ Dealing with surprise attacks: decomposing ERM as a dynamic capability to handle crises ”, Journal of Small Business and Enterprise Development , Vol.  28 No.  4 , pp.  515 - 536 .

Verhoef , P.C. , Broekhuizen , T. , Bart , Y. , Bhattacharya , A. , Qi Dong , J. , Fabian , N. and Haenlein , M. ( 2021 ), “ Digital transformation: a multidisciplinary reflection and research agenda ”, Journal of Business Research , Vol.  122 , pp.  889 - 901 .

Walter , A.T. ( 2021 ), “ Organizational agility: ill-defined and somewhat confusing? A systematic literature review and conceptualization ”, Management Review Quarterly , Vol.  71 , pp.  343 - 391 .

Warner , K.S.R. and Wäger , M. ( 2019 ), “ Building dynamic capabilities for digital transformation: an ongoing process of strategic renewal ”, Long Range Planning , Vol.  52 No.  3 , pp.  326 - 349 .

Weber , Y. and Tarba , S.Y. ( 2014 ), “ Strategic agility: a state of the art introduction to the special section on strategic agility ”, California Management Review , Vol.  56 No.  3 , pp.  5 - 12 .

Weiblen , T. and Chesbrough , H. ( 2015 ), “ Engaging with startups to enhance corporate innovation ”, California Management Review , Vol.  57 No.  2 , pp.  66 - 90 .

Winter , S.G. ( 2003 ), “ Understanding dynamic capabilities ”, Strategic Management Journal , Vol.  24 No.  10 , pp.  991 - 995 .

Yan , T.C. , Schulte , P. and Lee Kuo Chuen , D. ( 2018 ), “ Insurtech and fintech: banking and insurance enablement ”, in Lee Kuo Chuen , D. and Deng , R.H. (Eds), Handbook of Blockchain, Digital Finance, and Inclusion, Volume 1: Cryptocurrency, FinTech, InsurTech, and Regulation , Elsevier , pp.  249 - 281 .

Yin , R.K. ( 1994 ), “ Discovering the future of the case study. Method in evaluation research ”, Evaluation Practice , Vol.  15 No.  3 , pp.  283 - 290 .

Yin , R.K. ( 2003 ), “ Designing case studies ”, Qualitative Research Methods , Vol.  5 No.  14 , pp. 359 - 386 .

Yin , R.K. ( 2014 ), Case Study Research: Design and Methods , SAGE , Los Angeles, London, New Delhi, Singapore, Washington, DC .

Yin , R.K. ( 2017 ), Case Study Research and Applications: Design and Methods , Sage , Los Angeles .

Acknowledgements

The authors would like to thank the guest editors and the anonymous reviewers for their constructive comments and helpful suggestions.

Corresponding author

About the authors.

Katja Hutter is a Professor for Innovation and Entrepreneurship at the Innsbruck University School of Management and an executive coach. Her research examines the digital transformation of companies and industries, particularly in the areas of the management of innovation, user centralization, crowdsourcing, agile and lean startup methodologies.

Ferry-Michael Brendgens is a Ph.D. candidate at the Innsbruck University School of Management. Ferry-Michael holds a master's degree in strategic management. His research focuses on strategic agility, agile organizations, and large-scale agile settings. He works as an Agile Master Lead in Munich.

Sebastian Peter Gauster is a Ph.D. candidate, research assistant and lecturer at the Innsbruck University School of Management. Sebastian holds a diploma degree in international business and economics. In his research, he puts a focus on agility and management innovations. Further, he is interested in agile transformations and business model innovation.

Kurt Matzler is professor of Strategic Management at the University of Innsbruck, director of the Executive MBA program at MCI in Innsbruck and partner of IMP, an international consulting firm with its headquarters in Innsbruck. His research interests are in Open Strategy, Top Management Teams, and Disruptive Innovation.

Related articles

All feedback is valuable.

Please share your general feedback

Report an issue or find answers to frequently asked questions

Contact Customer Support

McKinsey & Company and Scrum.org Release Joint Research Study on Agile Teams

How to select and develop individuals for successful agile teams: a practical guide.

Boston – January 22, 2019– Today,  McKinsey & Company , a global management consulting firm, and Scrum.org , the mission-based organization dedicated to improving the profession of software delivery through training, certification assessments and community, released a new research study titled, How to Select and Develop Individuals for Successful Agile Teams: A Practical Guide . This study explores the values and traits that make agile teams successful, helping to guide companies with concepts and ways to better recruit and coach their teams.

“We participated in this study with McKinsey & Company to better understand how organizations can improve their efforts to become more agile,” said Dave West, CEO & Product Owner, Scrum.org. “Agile organizations need to understand how to get, retain and enable the best talent, and this study provides guidance on how they can do so.”

The study looks at the personality traits and work values in two crucial roles for agile teams: The Product Owner and the Team Member, and subsequently covers effective methods of further developing a team’s agility. The findings suggest that the ability to handle ambiguity and agreeableness are most important among personality traits, whereas pride in product outcomes and self-direction are most important among work values. Additionally, the study suggests the importance of customer-centricity as a way to inspire agile teams. It also provides practical questions to support the interview process and good practices for developing agile teams.

“Prior to this study, Scrum.org and McKinsey predicted that the characteristics of types of people that lead to success in an agile team would differ from those in traditional work settings, and wanted to understand how information about how people become successful can help,” said Wouter Aghina, a partner in the McKinsey & Company Amsterdam office. “Understanding how to select and hire for this dynamic, agile future is critical to the team and organization.”

The results and details of the study will be discussed in further detail in a webinar with Dave West, Scrum.org and Wouter Aghina, McKinsey & Company, on February 26, 2019 at 12:00 PM EST. The details to register are here . The report based on the study can be accessed here .

About Scrum.org Based on the values and principles of Scrum and the Agile Manifesto, Scrum.org provides comprehensive training, assessments and certifications to improve the profession of software delivery. Throughout the world, our solutions and community of Professional Scrum Trainers empower people and organizations to achieve agility through Scrum.  Ken Schwaber, the co-creator of Scrum, founded Scrum.org in 2009 as a global organization, dedicating himself to improving the profession of software delivery by reducing the gaps so the work and work products are dependable. Visit Scrum.org for further information on the organization’s Professional Scrum assessments, training and global community; follow us on Twitter @scrumdotorg and read more from our community of experts on the Scrum.org Blog .

About McKinsey & Company McKinsey & Company is a global management consulting firm, deeply committed to helping institutions in the private, public, and social sectors achieve lasting success. For more than 90 years, our primary objective has been to serve as our clients' most trusted external advisor. With consultants in 129 cities in 65 countries, across industries and functions, we bring unparalleled expertise to clients anywhere in the world. We work closely with teams at all levels of an organization to shape winning strategies, mobilize for change, build capabilities, and drive successful execution.

Media Contact: Lindsay Velecina Marketing Communications Manager Scrum.org [email protected]