Business Culture and the Competing Values Framework

One of the most important factors for business survival, growth and success is creating the right culture in an organisation. The highest-ranked challenges to adopting and scaling agile methodologies continue to be related to organisational culture, alongside getting senior ‘buy-in’, according to The Annual State of Agile Report. Culture is the result of people’s behaviours within an organisation. The way people think, speak, behave and ultimately ‘get things' done’. Yet culture remains poorly understood – particularly when a company is needing to increase business agility.

The Competing Values Framework (CVF)

Any exploration of the impact of culture on the adoption of agile methodologies should start with a look at how we assess it. There are various culture models out there, and the CVF is considered the most effective. There are two dimensions to the CVF:

• Stability-Flexibility – This covers, on the one hand, those organisations that believe they thrive with high levels of stability and control, and, on the other, businesses that believe they are more effective with high levels of flexibility and adaptability. The former group tends to have clear structures, processes and rules, not to mention lots of up front analysis and planning. They focus on exploiting efficiencies in their existing offerings to see how they can deliver them to customers more cheaply. The latter group tends to focus on people and outcomes, and can respond to changes with speed. They believe exploring new opportunities and offering new products to customers gives them a competitive edge.
• Internal-External – Organisations with internal orientation tend to focus on inward coordination and collaboration, whereas, external orientation focuses on the customer, market, competitors and new trends.

The two dimensions mentioned above define the CVF’s four quadrants; Control, Compete, Create and Collaborate, as displayed in the image below:

The cultural mix

Let’s be clear: there are no right or wrong cultures. Some cultures may suit and/or be more effective in different domains and industries. In fact, in reality, a healthy business will often have a mix of all four culture types, spanning different areas of the business.

For example, a bank may have a ‘control’ culture within its legal and compliance department, but may have a ‘create’ culture in its digital and technology space. Unfortunately, in today’s world, businesses try to have a one-size-fits-all culture which consists of the same values, behaviours, policies and structures across the entire organisation. This tends to result in companies settling for ‘control’ and ‘compete’ (say), but at the expense of innovating new ideas and adapting to changes.

The Agile Manifesto – Values and principles

Some 20 years ago, 17 software developers came together in Snowbird, Utah to propose a new way of developing software “by doing it and helping others do it”. The result was the Agile Manifesto. Interestingly, if we were to map the four values from this visionary work (Individuals and Interactions, Customer Collaboration, Working Software and Responding to Change), they would very much sit in the ‘Collaborate’ and “Create’ quadrants. Whereas, we would see the aspects that the manifesto de-emphasises sit in the bottom left in the “Control’ section, namely: Processes and Tools, Contract Negotiation, Comprehensive Documentation and Following a Plan.

For companies to increase their business agility, they must align with ‘Create’ and ‘Collaborate’ cultures, which encourage high levels of flexibility and experimentation, along with a strong customer focus.

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Key takeaways

• The culture of an organisation is one of the most important factors for survival, growth and success, but it remains poorly understood – particularly when a company is needing to increase business agility.
• The Culture Value Framework is considered the most effective way to assess culture within an organisation. It has four behavioural quadrants: Control, Compete, Create and Collaborate.
• The four values of the Agile Manifesto sit in the CVF’s Collaborate and Create quadrants. To increase business agility, organisations must align with these two behaviours, which encourage high levels of flexibility and experimentation, along with a strong customer focus.
  

About the author

Archie is a Delivery Leader and Coach in Agile Leadership and Business Agility at Mindera, with over 10 years of experience in the software development product space.