Investigation of Enablers and Barriers for Enterprise Agility A Study from Traditional Organizations in Sweden Master’s Thesis in the Master’s Programme Management and Economics of Innovation Thai Tan Bui David Sjölenius Department of Technology Management and Economics Division of Innovation and R&D Management CHALMERS UNIVERSITY OF TECHNOLOGY Gothenburg, Sweden 2018 Report No. E 2018:020 MASTER’S THESIS E 2018:020 Investigation of Enablers and Barriers for Enterprise Agility A Study from Traditional Organizations in Sweden THAI TAN BUI DAVID SJÖLENIUS Tutor, Chalmers: Hans Löfsten Tutor, company: Sofia Ydkvist Department of Technology Management and Economics Division of Innovation and R&D Management CHALMERS UNIVERSITY OF TECHNOLOGY Gothenburg, Sweden 2018 Investigation of Enablers and Barriers for Enterprise Agility A Study from Traditional Organizations in Sweden THAI TAN BUI & DAVID SJÖLENIUS © THAI TAN BUI & DAVID SJÖLENIUS, 2018. Master’s Thesis E 2018:020 Department of Technology Management and Economics Division of Innovation and R&D Management Chalmers University of Technology SE-412 96 Gothenburg, Sweden Telephone: + 46 (0)31-772 1000 Chalmers Reproservice Gothenburg, Sweden 2018 I Acknowledgements This research has been conducted as a master’s thesis with the purpose of finalizing the authors’ enrollment in the master’s programme Management and Economics of Innovation at Chalmers University of Technology in Gothenburg, Sweden. The authors would first of all like to thank their partner company Crepido for the opportunity to write the thesis with them within a very interesting area of research. Secondly, the authors would like to thank their supervisor, Hans Löfsten, for always providing support and directions. Finally, the authors would like to express their deepest gratitude towards the interviewed companies for their time and insights, which have been key for the outcome of the thesis. _____________________________ _____________________________ Thai Tan Bui David Sjölenius II Abstract As a consequence of the shift in the global economy, it has changed the way that companies do business. New customer demand and expectations has put pressure on companies to rejuvenate themselves in order to be able to meet said changes. Adaptability and flexibility can therefore be regarded as hygiene factors which are essential for companies to compete in such a dynamic business environment. Therefore, enterprise agility is becoming more prominent by the years, and can serve as a way to gain adaptability and flexibility. The aim of this thesis is thus to examine which factors might serve as an enabler or barrier to the adoption of agile methodologies and ultimately becoming an agile enterprise. Literature revolving organizational structure, project management, and enterprise agility in combination with interviews with case companies, is used in order to answer the defined research questions. The researchers can conclude that the context in which agility is applied plays a role in the companies’ feasibility and decision to pursue agility. Furthermore, the authors present barriers and enablers, called agility elements in this study, and in which enterprise dimensions they can be found. In order to become an agile enterprise, there is a need to bear the enablers and barriers in mind, leverage and to overcome them respectively. Keywords: agile, enterprise agility, agility barriers, agility enablers, organizational change, agility management III Table of Contents ACKNOWLEDGEMENTS ........................................................................................................... I ABSTRACT ................................................................................................................................... II LIST OF FIGURES ...................................................................................................................... V LIST OF TABLES ....................................................................................................................... VI 1. INTRODUCTION ..................................................................................................................... 1 1.1 BACKGROUND ......................................................................................................................... 1 1.2 AIM ......................................................................................................................................... 2 1.3 LIMITATIONS ........................................................................................................................... 3 2. LITERATURE REVIEW ......................................................................................................... 4 2.1 PROJECT MANAGEMENT .......................................................................................................... 4 2.2 THE CONCEPT OF AGILITY ....................................................................................................... 8 2.3 ORGANIZATIONAL CHANGE ................................................................................................... 15 2.4 THEORETICAL FRAMEWORK .................................................................................................. 19 3. METHODOLOGY .................................................................................................................. 21 3.1 RESEARCH STRATEGY ........................................................................................................... 21 3.2 RESEARCH PROCESS .............................................................................................................. 22 3.3 LITERATURE REVIEW ............................................................................................................ 23 3.4 DATA COLLECTION ............................................................................................................... 25 3.5 ANALYSIS OF DATA ............................................................................................................... 27 3.6 RESEARCH QUALITY ............................................................................................................. 29 3.7 ETHICS .................................................................................................................................. 32 4. EMPIRICAL FINDINGS ........................................................................................................ 33 4.1 COMPANY SELECTION AND INTERVIEW FOCUS ..................................................................... 33 4.2 COMPANY A .......................................................................................................................... 34 4.3 COMPANY B .......................................................................................................................... 35 4.4 COMPANY C .......................................................................................................................... 37 4.5 COMPANY D .......................................................................................................................... 38 4.6 COMPANY E .......................................................................................................................... 39 4.7 COMPANY F ........................................................................................................................... 41 4.8 COMPANY G .......................................................................................................................... 42 4.9 COMPANY H .......................................................................................................................... 44 4.10 COMPANY I .......................................................................................................................... 45 4.11 COMPANY J ......................................................................................................................... 47 4.12 CONCLUDING REMARKS ...................................................................................................... 48 5. ANALYSIS ............................................................................................................................... 49 5.1 FOCUS OF ANALYSIS ............................................................................................................. 49 5.2 AGILITY BARRIERS ................................................................................................................ 49 5.3 AGILITY ENABLERS ............................................................................................................... 54 IV 5.4 CONCLUDING REMARKS ........................................................................................................ 59 6. CONCLUSION ........................................................................................................................ 61 APPENDIX A – INTERVIEW QUESTIONS ........................................................................... 66 APPENDIX B – COMPANY INTERVIEWS ........................................................................... 67 INTERVIEW COMPANY A ............................................................................................................. 67 INTERVIEW COMPANY B ............................................................................................................. 69 INTERVIEW COMPANY C ............................................................................................................. 71 INTERVIEW COMPANY D ............................................................................................................. 73 INTERVIEW COMPANY E .............................................................................................................. 75 INTERVIEW COMPANY F .............................................................................................................. 77 INTERVIEW COMPANY G ............................................................................................................. 79 INTERVIEW COMPANY H ............................................................................................................. 81 INTERVIEW COMPANY I ............................................................................................................... 83 INTERVIEW COMPANY J .............................................................................................................. 85 V List of Figures Figure 1: An illustration of the different groups’ performance trajectories over time (Maylor, 2010) ................................................................................................................................................ 5 Figure 2: Illustration of the stage-gate model (Cooper, 1990) ...................................................... 6 Figure 3: Conceptual model of an agile enterprise (Tseng & Lin, 2011) ..................................... 11 Figure 4: Scaled Agile Framework 4.5 (Scaled Agile Inc., 2017) ................................................. 13 Figure 5: Conceptual model for identifying and analyzing relevant enablers and barriers to agility adoption. ............................................................................................................................. 19 Figure 6: The Research Process .................................................................................................... 22 Figure 7: The review process (Easterby-Smith et al., 2015) ......................................................... 24 Figure 8: Grounded theory data analysis (Noble and Mitchell, 2016) ......................................... 28 VI List of Tables Table 1: The four values in the Agile Manifesto .............................................................................. 7 Table 2: Extension of Laanti’s (2014) introduction of Agility (Laanti, 2014) ................................. 8 Table 3: Reasons for resistance to change (Rosenberg and Mosca, 2011) ................................... 16 Table 4: Examples of potential agility enablers and barriers within the enterprise elements. ..... 20 Table 5: Interviewee roles ............................................................................................................. 27 Table 6: Findings from interview with company A ........................................................................ 34 Table 7: Findings from interview with company B ........................................................................ 35 Table 8: Findings from interview with company C ....................................................................... 37 Table 9: Findings from interview with company D ....................................................................... 38 Table 10: Findings from interview with company E ...................................................................... 40 Table 11: Findings from interview with company F ...................................................................... 41 Table 12: Findings from interview with company G ..................................................................... 43 Table 13: Findings from interview with company H ..................................................................... 44 Table 14: Findings from interview with company I ....................................................................... 45 Table 15: Findings from interview with company J ...................................................................... 47 Table 16: Agility enablers and barriers within the enterprise dimensions based on company interviews ....................................................................................................................................... 59 1 1. Introduction 1.1 Background The rapid change in the global economy has during the last decade changed the way that many companies conduct business, where parts can be attributed to the developments in technology and digital means of conducting business. Customer demand and expectations for shorter lead times are continuously increasing with the introduction of new innovative changes in the marketplace. Therefore, adaptability and flexibility is crucial for today's companies to react to a dynamic business environment (Bray, 2017; Tseng & Lin 2011) and a continuous revision of the organization’s structures, strategies and policies to manage and react to the changes in a swift manner is needed (Mahapatra & Mangalaraj, 2005). One way of achieving a company’s strategic goals is through the structured process of how the company manages its projects. As advocated by Pinto (2015), project management plays an integral part in achieving a competitive advantage in an increasingly globalized world. It allows for an otherwise complex task to be manageable and structured, where the end-result is shown to be significantly better than those projects who are not managed with a structured approach. Many approaches to project management have been developed throughout the years, where Cooper (2016)’s stage-gate model has been used heavily within traditional development projects. While there are several ways to managing a project, there has been limited research which include agile methodologies as a project management technique in a large business context. Furthermore, while agile methodologies are prominent within the software industry, Boehm & Turner (2005) highlight that it is less common within traditional organizations. Moreover, Hobbs & Petit (2017) state that agile methodologies as a project management tool has historically been adopted due to the clear advantages that it provides, mainly: rapid adaptation to changes, enhancement of creativity and productivity in the working environment, and increased customer value as a result of short iterative development processes over long upfront planning processes. The topic is therefore intriguing as to why the adoption rate of enterprise agility has been negligible in larger traditional organizations, even though the benefits of working agile have been proven successful within a project management context. However, with that said, many companies have 2 during the last decades recognized the competitive advantages which can be derived from agile methodologies according to Mathiassen & Pries-Heje (2006), and Hobbs & Petit (2017) mention in their study that several traditional organizations have started experimenting with scaled agile in a larger business context but have failed to scale up the from the implementation in small teams, to the organization as a whole. In other words, enterprise agility as a concept has been experimented upon, but has seen limited success in traditional organizations. As for organizations who have managed to scale agile, most of the stories come from self-reports and thus there is a need for academic considerations (Turetken et al., 2017). The concept of agility therefore remains rather ambiguous, not only amongst companies, but scholars as well. Various definitions for agility has been stated amongst scholars such as Doz & Kosonen (2008), Tseng & Lin (2011), van Oosterhout et al. (2005) and Lu & Ramamurthy (2011). However, the common objective remains the same where being able to sense and adapt to changes in the business environment in a quick and resource- efficient manner is regarded as crucial. There has been limited research regarding why some traditional organizations have been more incentivized to experiment with agile methodologies, especially in a business context. Thus, factors which might hinder or enable enterprise agility will be studied in order to fill the gap in previous research regarding the enterprise agility domain. 1.2 Aim Derived from the background section, the aim of this research is to examine which factors might be an enabler or barrier to the adoption of agile methodologies and ultimately becoming an agile enterprise. In this study, traditional organizations can be defined as organizations which are believed to use the aforementioned traditional approaches to project management. Thus, traditional organizations are those that emphasize up-front planning approaches i.e. stage-gate or waterfall processes for project management, or is believed to do so. With this in mind, it is however important to emphasize that this will be an exploratory research, aiming to explore 2-3 companies within the energy, industrial, forest, and real estate industry. 3 1.3 Limitations Due to restrictions in resources, some limitations had to be made regarding the scope of the study. As a result, the researchers have chosen to select 2-3 companies each within the energy, industrial, forest and real estate industry. Moreover, for the same reason, naturally limitations had to be made regarding the selection of companies and industries. Thus, the researchers have chosen to narrow down the study to only include Swedish companies. Furthermore, for the same reason as stated above, limitations had to made regarding the size and turn-over of the clients. Thus, the researchers selected clients defined as middle and large size in terms of employees and turnover. The selected definitions were gathered from the EU:s directive for companies (European Commission, 2003). 4 2. Literature Review The following section will present the main body of literature which will be used in this research. The discussed literature includes project management approaches where waterfall techniques such as the stage-gate model is presented as well as agile methodologies. Since this study focuses on the domain of project management and agile methodologies more specifically, it is essential to understand the advantages and disadvantages of each approach. Thereafter, the concept of enterprise agility and scaled agile is discussed, and ultimately, we touch upon change management, which is essential in order to understand the underlying complexity in adopting new ideas or approaches and what factors may be a hindrance in doing so. 2.1 Project Management In order for projects to be successful, management of the project becomes a crucial task. Many scholars have during the years emphasized the importance of different approaches to managing projects depending on the context. There is Maylor (2010) who advocates stringent usage of time plans and up-front planning in order to reduce the risk for extraneous factors that might delay or in other ways hinder the project from moving forward. As a result, you also reduce the costs associated with obstacles during the project process. Thus, cost in regard to time and money is seen as a primary determinant when it comes to planning your project. Needless to state, some companies have more developed project processes than others and according to Maylor (2010), the main reason for that is due to the organizational maturity. An organization’s maturity can be divided into four different groups (see figure 1), and while characterizating an organization is difficult, Maylor (2010) based the four groups on their abilities to meet basic objectives in terms of time, cost and quality. The first group consists of the flatliners and prominent characteristics of organizations in this group are that they have good intentions on improving, but make little to no progress in their project performance, mainly as a consequence of repeating mistakes without learning from them. The general mindset here is that every project is novel and external ideas are rejected due to a “not invented here”-syndrome. The second group are called the improvers as they perform and improve slightly better than the flatliners. Minor processes and systems are in place which are used to facilitate and increase project performance. 5 However, they still lack the discipline to see through their improvement aspirations full out which is needed in order to conform to business objectives in an efficient manner. The wannabes come next as the third group, and are characterized by the fact they try and incorporate best practice techniques for project management in an attempt to keep up with the best and narrowing the discrepancy to the best organizations out there. Lastly, group 4 consists of the world-class performers which are the organizations which the wannabes are trying to catch up to. Group 4 are the small number of organizations that set best practices for project management and thus also those who improve and perform the best where learning is an integral part of the project process. Figure 1: An illustration of the different groups’ performance trajectories over time (Source: Maylor (2010) p. 389) 2.1.1 Stage-Gate Model Several project management paradigms have been developed throughout the years where one of the most common traditional project management technique is the stage-gate model depicted in figure 2 (also known as a waterfall process), which Cooper (2016) explains is a planning process that is derived upon investments needed. More specifically, it follows a logic of different project stages, where the transition to the next phase can only be done if certain criteria has been met at the end of each stage where a screening process in shape of a gate is made. Based on if the predefined criteria have been met or not, the project will either move on to the next phase, or be terminated as a consequence of not fulfilling the requirements and therefore not deemed as a reasonable project to move forward with. Cooper (2016) highlights that the stage-gate model is used as a “macro-planning” process, where the whole project plan is extensively defined before the project launch, in order to determine the resources that needs to be allocated in each stage. Thus, while the advantage is that there is a structured project plan, where the project either moves forward or are terminated, based upon strategically defined criteria, there are also disadvantages. When 6 terminating the project as a consequence of the criteria not being met, all the resources that have been used in the previous stages are now gone, along with the previous expected outcome of the project, not to mention the time and effort put into planning and scoping up the project plan. Figure 2: Illustration of the stage-gate model (Source: Cooper, 1990 p. 46) 2.1.2 Agile Methodologies Another common project management method, mostly known within the IT industry, is agile methodologies (Mahapatra & Mangalaraj, 2005), which Cooper (2016) describes as a contrasting project management technique to the traditional waterfall process. Moreover, agile methodologies, according to Dingsøyr et al (2012), does not place emphasis on the initial planning process before project launch, but rather on delivering a working product to the clients and create value for them as soon as possible, while continuing to develop the product continuously. The most prominent technique for running a project within agile methodologies, and particularly in software development, is the concept of Scrum (Schwaber, 2004), where activities are generated similar to that of Maylor’s (2010) description of a Work Breakdown Structure (WBS) and are put into an activity backlog. The Scrum team (or project team) thereafter work in short iterative cycles called sprints, in order to conduct the activities in a chronological order, with the highest prioritized activity being done first (Schwaber, 2004). These short development cycles allow for unforeseen problems to emerge and thus enabling a learning process (Schwaber, 2004), which would not be feasible in a waterfall process due to the long upfront planning and investments already made in the project (Cooper, 2016). Additionally, to learning from problems, Cooper (2016) advocate that the core advantages of working in short iterative cycles lie in the adaptability to changes in 7 requirements e.g. from the customer, which was not known beforehand and emerged during the project process. The foundation of agile methodologies rests on a set of values, which agile practitioners adhere to. The values are documented in something called The Agile Manifesto and describes what it means to work agile as opposed to the traditional waterfall approaches which are prominent in traditional organizations (Fowler & Highsmith, 2001). Table 1: The four values in the Agile Manifesto Agile Traditional 1 Individuals and interactions Processes and tools 2 Working software Comprehensive documentation 3 Customer collaboration Contract negotiation 4 Responding to change Following a plan Firstly, the Agile Manifesto advocates for individuals and interactions over processes and tools. The meaning of this statement is basically that managing a project with the use of rigid processes and tools will only be detrimental to the end-result. Rather than relying on the tools to guide you through the project, there is a need for continuous interactivity amongst the internal and external stakeholders. By having a continuous involvement facilitation, it is ensured that everyone is working together effectively to achieve a common goal. Secondly, working software over comprehensive documentation touches on the notion that a user of your product or service will prefer having something working right in front of them, rather than a document that describes the intended usage of it. Next up is the customer collaboration over contract negotiation value, which advocates for always listening and adhering to your customers’ needs. Communication is regarded as a necessity in order for projects to be successful, which enables the discovery of customer needs. As a result, listening to changes in customer demand allows you to respond accordingly. Therefore, responding to change over following a plan is interdependent with the third value. Project plans are initiated at the beginning of a project, while customer behavior changes concurrently with the 8 project lifecycle. With that said, processes and tools, documentation, contract negotiation, and plans are continuously essential parts of project management. Thus, working agile does not necessarily mean to eradicate every element that historically has belonged to traditional ways of approaching project manage (Hazzan & Dubinsky, 2014). 2.2 The Concept of Agility Due to the limited research done in agility, there is consequently a fragmented view amongst researchers on how to define agility which naturally leads to different definitions ofthe same objective (Laanti, 2014). Looking at table 2, scholars’ three most common definitions of agility can be depicted. The agile aspects have been inspired and adopted by the researchers of this study, while the definitions have been reviewed independently from the reviews by Laanti (2014). Table 2: Extension of Laanti’s (2014) introduction of Agility (Source: Laanti, 2014, p. 11) Agility Concepts Scholars’ Agility Definitions 1 Strategic Agility The ability to react to changes in the business environment through a balance in real-time strategic sensitivity (perception, awareness and attention), collective commitment (organizational objective) and resource fluidity (reconfiguration and redeployment of people and structures), which allows for a rapid and responsive strategy to meet changes (Doz & Kosonen, 2008). 2 Enterprise Agility Agility refers to the organization’s ability to be flexible, responsive and adaptive, in a constantly changing environment of uncertainty. There is thus a need for a culture of change in order to integrate and mobilize core competencies (Sherehiy et al., 2007). Moreover, there is a need to identify the agile drivers (changes in the business environment, which pressures companies towards an agile approach), agile capabilities (required attributes for an organization to become agile) and agility providers (the fundamental enablers for the agile capabilities) in order to initiate a design for the agile enterprise (Tseng & Lin, 2011). 3 Business Agility Agility explains the ability for a company to cope with unforeseen changes while also being able to take action in a timely manner, and is prevalent on an enterprise and business network level (van Oosterhout et al., 2005). 4 Organizational Agility An organization’s ability to respond to change, as a consequence of increased environmental volatility and uncertainty (Tallon & Pinsonneault, 9 2011). In other words, the ability to quickly respond and act on customers’ needs through continuous monitoring (Lu & Ramamurthy, 2011). Derived from the table, it can be seen that the four concepts of agility definitions are similar and in many parts overlapping. The primary determinants seem to lie in the ability to sense, adapt and react to changes in the business environment in a resource-efficient and timely manner. Therefore, for the remainder of this study, the concepts strategic agility, enterprise agility, business agility and organizational agility can be regarded as synonymous and used interchangeably. However, to mitigate the risk for confusion between the different concepts, enterprise agility will be used throughout the study from here on. 2.2.1 Enterprise Agility Much alike how agility can be beneficial for smaller Scrum teams, it can also become a way of creating a competitive advantage for organizations and enterprises in an uncertain and ever- changing business environment (Tseng & Lin, 2011). Agility can be a fuzzy word and an unknown concept for most companies on a larger scale and consequently the benefits of being agile becomes lost in translation. Tseng & Lin (2011) therefore raise the question of adoption of agility amongst enterprise leaders which is dependent on the types of organizations that they are in accordance to Rogers’ (2003) adoption categories and Maylor’s (2010) organizational maturity groups. Regardless of the type of organization, Tseng & Lin (2011) advocates that it is critical to create an effective integrated procedure within the business which main function is to facilitate agility capabilities and drivers within the organization and ultimately achieving a competitive advantage. According to Tseng & Lin (2011), the main objective of an agile enterprise is to generate a larger value both externally to the customers, but also internally to the employees, where the main benefits are attributed towards rapidly responding to changes in the business environment. Thus, in this case, the business environment does not necessarily only constitute customers in the external environment, but also to the demanding changes of the internal employees. Therefore, regardless of which target groups an organization is trying to satisfy, the common denominator in this case is change. 10 While the different aspects of agility are different amongst organizations, there is a need for an agile vision perpetuating the whole organization in order to respond to the changes. Tseng & Lin (2011) describes five distinguishing types of changes in the business environment, here on defined as agility drivers: (1) market volatility as a direct consequence of growth in niche markets, which provides new products and services that ultimately affect customer demand and behavior; (2) changing markets which induces intense competition, where profit margins are pressured with shorter development times for new products and services; (3) changes in customer demand, who are seeing an increase in expectations about quality and delivery times; (4) technological changes as a result of new and efficient facilities and system integrations; and (5) changes in social factors, such as regulations and workplace expectations are becoming increasingly volatile, i.e. changes both in external and internal forces. In order for an organization to become agile, it is crucial that there is a perpetuating sense of responsiveness in all of its core assets and objectives, from strategies and technologies to personnel, business processes and facilities. This is essential in the sense that identifying the agility capabilities in the organization is difficult if there is no common objective of becoming agile within the whole enterprise. However, Tseng & Lin (2011) have seen four elements of agility capabilities that agile enterprises should have; (1) responsiveness, i.e. the ability to see changes in the business environment and also taking action in a swift manner in order to meet those changes; (2) competency in reaching its strategic objectives in an effective and efficient manner; (3) flexibility/adaptability which concerns the organization's ability to use different approaches in their current processes in order to achieve different objectives in (4) the quickest and shortest possible time. Ultimately, Tseng & Lin (2011) raises the complex issue of aligning, integrating and leveraging the agility capabilities and agility providers in order to meet the different types of changes in the business environment, i.e. agility drivers - only then can the organization become truly agile. Due to the legacy systems in place in traditional organizations, there will always be need for transformation of the organization itself and therefore an alignment strategy for agile needs to be defined. The agile alignment strategy should identify the agile capabilities within the organization which can respond quickly to the changes in the environment by finding synergies and coordinating between the agility drivers and capabilities. In order to visualize an agile enterprise, Tseng & Lin 11 (2011) has developed a conceptual model for how an agile enterprise should look like, which can be depicted in figure 3. Figure 3: Conceptual model of an agile enterprise (Source: Tseng & Lin, 2011, p. 3698) 2.2.2 Scaled Agile In order to guide organizations in the path to becoming an agile enterprise, roadmaps are needed as a basis for decision-making (Turetken et al., 2017). The first models for scaling agility however already exists, where reoccurring ones are Scaled Agile Framework (SAFe) by Laanti (2014) and Disciplined Agile Delivery (DAD) by Ambler & Lines (2012). To reiterate what has previously been said about agile methodologies in a project management context, there are specific benefits which can be attributed to the rapid response of a changing business environment. Laanti (2014) provide further indications of this, stating that early adopters of SAFe have experienced a significant increase in performance, productivity and quality, which are key attributes that are of interests for any organization. Laanti (2014) further argue that the reason for why organizations are 12 looking to agile approaches to increase these attributes is due to (1) increase in speed for time-to- market for new technologies and innovations. Consequently, there is a need for (2) constant innovations, as new innovations are introduced and diminishes the competitive advantages from previous innovations. Therefore, as (3) markets are becoming increasingly unpredictable, flexibility regarding investments and capacity are also needed in order to ensure quick innovation activities. These reasons can therefore also be categorized as Tseng & Lin (2011)’s definition of agility drivers. In order to react and respond to the changes, organizations have turned to SAFe, which has been the framework with the highest adoption rate. SAFe provides a roadmap for enterprises to scale their agile methodologies from small project teams, to the enterprise as a whole. The SAFe framework is distinguished into four interdependent levels: team, program, large solution and portfolio levels. Starting with the team level, it incorporates well-known software development practices, such as sprint plannings, daily plannings etc. Most commonly, the agile teams consist of around seven team members and are most prominent within an IT function of an organization. The primary goal and benefits of a small team allows for continuous interaction and iterations where an exploratory mindset is heavily valued. The iterations are typically structured in sprints, where a common timeframe is two weeks. Within the sprints, the teams are supposed to be able to conduct prioritized tasks in their backlog and present incremental improvements to the final product. Reviews of the delivered increments are then made, which allows the teams to take in new information and feedback regarding deliverables, and thus be able to meet the eventual changes in customer demand in the subsequent sprints (Turutken et al. 2016). 13 Figure 4: Scaled Agile Framework 4.5 (Source: Scaled Agile Inc., 2017) Having the agile teams in place, the program level aims to organize the agile teams on a larger scale, in a manner where requirements are met in a way that optimizes the value derived from it. A program backlog is used on this level, which helps in defining and prioritizing business objectives in which the concurrent sprints are supposed to meet (Turutken et al., 2016). Then, Agile Release Trains (ART) are used in order to execute and deliver incremental improvements in order to reach the business objectives. An ART can be explained as a virtual organization, consisting of several agile teams that exist solely to create value for the end-user. As can be depicted from figure 4, a continuous delivery is advocated, where iteration between exploration, integration and deployment are crucial. Thereafter, after a certain time period, most oftenly 60-120 days, increments are to be released. The ART can thus be seen as a Kanban system which value stream depends on the end- user’s demand, but with the continuous involvement of internal and external stakeholders along the way (Scaled Agile Framework, 2017; Turutken et al., 2017). 14 At the large solution level, the primary aim is to build large scale solutions which single ARTs are not able to do. As opposed to the program level where the solutions are on a smaller scale, there is a need for multiple ARTs in the large solution level due to the increased scale and complexity of the desired solutions. A solution train is therefore used, which primary purpose is to facilitate the multiple ARTs in accordance to the common solution vision, mission and backlog. With the use of a solution train, the benefits from being a small agile team are maintained, while also being able to scale it up as a result of having an organizational element in the solution train which can manage several agile teams at once. For clarification purposes, a solution train is needed and used to manage several smaller agile teams, since having a single large agile team is not feasible (Scaled Agile Framework, 2017). Ultimately, at the top of the enterprise, there is the portfolio level. It contains necessary processes and people which are essential in order to meet the strategic objectives of the enterprise. On the enterprise level, a lean-agile mindset is approached, i.e. embracing lean thinking in terms of having a stout leadership who can drive the enterprise towards new heights by thinking in new innovative ways. Agile which has been the foundation for team-based processes can, with the use of lean- thinking, scale from a team-based process to the entire enterprise. However, can only be done by the enablement from competent lean-agile thinkers which commonly are executives or managers who can eliminate impediments and drive organizational changes while making sure to improve the whole organization rigorously. On the portfolio level, the organization uses value streams, which defines the allocation of resources needed in order to build solutions, in order to meet strategic objectives. This ensures that the organization deliver continuous value to their customers while adhering to the financial metrics specified in the budget (Scaled Agile Framework; Turutken et al., 2017). 2.2.3 The Role of IT in Enterprise Agility As enterprise agility concerns the ability to identify changes in the business environment, Overby et. al. (2006) strongly suggest that IT has a crucial role to play when it comes to enabling a firm’s capability to identify and respond to the changes. This can mainly be done through (1) directly and (2) indirectly creating digital options within a firm. Overby et. al., (2006) further elaborates that 15 (1) directly creating digital options concerns the firm’s IT capability to identify and respond mainly to new technological changes. The main argument for this is that the changing business environment induces changes in information volumes which needs to be processed that goes beyond that of human capacity, and thus IT systems aids the firm to make sense of large volumes of information, which would otherwise overwhelm them. While there is (1) direct relationship between IT and agility, Overby et al. (2006) states that there are also indirect externalities in which IT contributes to. Mainly, while IT aids the firm in (1) identifying and responding to changes, they also (2) provide value for business processes such as product development, manufacturing and supply chain. These kinds of processes are prominent on more traditional organizations and thus IT is seen to contribute to the firm performance by providing an infrastructure which other business processes depend on. There is thus a suggestion from Overby et. al. (2006) that IT (2) indirectly supports agility by providing digitized business processes. 2.3 Organizational Change Melanie (2014) describes agile working as being able to work quickly and easy. Melanie (2014) further argues that the concept has been increasingly popular amongst companies, as they have realized that the traditional ways of hierarchy and time consuming decision-making processes, are not suitable in a world characterized by fast and continuous changes. Moreover, Melanie (2014) advocates that the change itself has become increasingly more complex due to the operating environment, where the connections between partners, systems, processes and subsidiaries have become more interconnected. Thus, defining these connections has become an increased challenge, and the isolation of one connection to exclude unpredicted affection between the rest of the connections is no longer possible. Melanie (2014) further argues that realizing, that change cannot be planned and predicted into every detail is a key component to successfully achieving an agile approach. Where the company instead should focus on allowing the solution, and the driving factors to evolve and emerge as the company gains further knowledge regarding the situation they try to improve. Moreover, the author 16 describes change as a disruptive process, where the change might create fear and requires resources. Thus, change should only be implemented when it can deliver what the company needs, in the time its needed. Due to being a disruptive process, Melanie (2014) advocates the need of understanding how the affected people of the change views the intended approach, and understand their mindset regarding the change. Neglection of this can cause resistors which in turn can jeopardize the success of the change project. Tamilarasu (2012) argues in accordance with Melanie (2014) and further states that the resistance from change can be explained due to the basic human preferability of stability and predictability. Tamilarasu further argues that the success of the project is heavily influenced by the company's management of these resistors. Where resistance should neither be seen as good or bad, as resistance can serve as an indicator that the change can be improved further. 2.3.1 Barriers to Organizational Change Change initiatives have a high rate of failure, managers often understand the importance of organizational change but lack the knowledge of how to implement it effectively. Rosenberg and Mosca (2011) have identified different reasons for organizational resistance as presented in table 3. Table 3: Reasons for resistance to change (Rosenberg and Mosca, 2011, Breaking Down the Barriers to Organizational Change) 1 Employees attitudes/disposition towards change 2 Fear of the unknown (uncertainty) 3 Lack of understanding of the firm’s intentions 4 Fear of failure 5 Disruption of routine 6 Increased workload 7 Lack of rewards for implementing change 8 Perceived loss of control, security or status 9 Poor leadership 10 Dysfunctional organizational culture 17 11 Organizational size and rigidity 12 Lack of management support for the change 13 Lack of trust between management and employees 14 Inability or unwillingness of management to deal with resistance 15 Lack of participation due to top-down steering 16 Organizational politics/conflict 17 Internal conflict for resources 18 Lack of consequences for inadequate or poor performance 19 The content of the change 20 Poor implementation planning The authors further argue that every organization is unique, and in order to implement successfully every manager has to adopt their change strategies to the best suited for their specific company. 2.3.2 Organizational Knowledge Management Changes are typically driven with a top-down approach, basically starting with a seed of thought stemming from the top management’s knowledge. Furthermore, organizational knowledge could, if utilized correctly, create a fundament for competitive advantage according to Paradice & Courtney (1989), who therefore advocates that knowledge sharing within a company is crucial. Managing and sharing knowledge can reduce managerial training time and cost, while also leading better managerial decisions. Gold et. al., (2001) further argue that it is becoming more of a prerequisite to manage the organizational knowledge, rather than historically being a source of competitive advantage. There is thus a need to manage the social capital within the company, which can be done by combining and exchanging knowledge along three dimensions; (1) technology, (2) organizational structure, and (3) organizational culture. When it comes to (1) technology, it concerns the dimension which constitute the structure in order to manage the existing social capital and generating new knowledge. Typically, technology regards a company’s communication systems, which allows for consolidation and increased accessibility 18 of previous knowledge, which in turn allows for internalization and ultimately generation of new knowledge. Moreover, apart from communication systems, the technological dimension constitutes knowledge revolving business intelligence, collaboration, distributed learning, knowledge discovery, knowledge mapping and opportunity generation. (2) Organizational structure is needed in order to leverage the technology, where emphasis should be put on sharing knowledge between individual functions. It is therefore important to manage the internal organizational boundaries in order for the information to flow effectively from one business unit to the other without risking sub optimization for the whole firm. Thus, organizational structures should emphasize flexibility, as opposed to rigidity, which in turn allows for knowledge sharing and collaboration across internal organizational boundaries. The biggest challenge to effectively manage knowledge is probably due to the (3) organizational culture. Communication between the individuals creates the fundamentals for idea and knowledge sharing, which is why a culture which allows for frequent dialogues can be seen as an enabler for more efficient knowledge management. Other ways of allowing the culture to become a driver for knowledge management is to provide and communicate the vision and values to the organization, to which everyone should be committed (Gold et. al., 2001). 19 2.4 Theoretical Framework From the knowledge gained from the literature review, a theoretical framework is designed, which purpose is to be used as a model for analysis. The framework will primarily be used to examine different agility elements, constituting of enablers and barriers, within certain enterprise dimensions; organization, project management, industry and digitalization. The ultimate purpose is thus to map the relevant agility elements which can be derived from data collection revolving the enterprise dimensions. Figure 5: Conceptual model for identifying and analyzing relevant enablers and barriers to agility adoption. The conceptual model will help the researchers move forward with the data collection process as well as the analysis of it. This will be discussed more specifically in the next chapter. However, in brief, questions will be asked to relevant companies about the enterprise dimensions depicted in figure 5, and the agility elements will then be mapped according to whether they are considered enablers or barriers to agility. To further illustrate this, table 4 describes examples of potential enabler and barrier elements for agility within the different enterprise dimensions. 20 Table 4: Examples of potential agility enablers and barriers within the enterprise dimensions. Agility Enablers Examples Agility Barriers Examples Organization • Small size • Agile leadership • Adaptation and flexibility • Rigid structure • Large size • Limited knowledge • Legacy systems Project Management • Cross-functional teams • Agile project leaders • Agile champions • Defined project model • Waterfall approach • Approach been used over a long period of time • No possibility for iterations Industry • Dynamic market • Changing customer behavior • Rapid introduction of technology • Low knowledge about market • Minor market activity • Low innovation activities Digitalization • High technological utilization • Low technological utilization The following research questions have ultimately been formulated in order clarify the research objectives, and their linkage to the theoretical framework: RQ1: What are potential agility elements within companies active in the energy, industrial, forest, and real estate industry? RQ2: In which domains of the enterprise dimensions can the agility elements be identified? 21 3. Methodology Based on the research purpose outlined previously, the methodology that will be used in this study has been designed to answer the research questions. The primary approach to the study will be qualitative, the most common approach used in management and business research. The area of research for this study mainly falls within management, which is why the subsequent approach has been used. 3.1 Research Strategy Bryman and Bell (2003) advocates that there exist two main approaches to research: qualitative and quantitative. Quantitative research can be generalized into being a strategy that aims towards quantification of the empirical findings, while qualitative research places more emphasis on the words in regard to the collection of the data and is according to Hoepfl (1997) and Strauss & Corbin (1990) suitable when the aim is to understand a situation where previous theory is regarded to be inconclusive. Moreover, the empirical findings will be collected through qualitative semi- structured interviews, which the authors describe as an interview having a series of predefined questions, but the interviewer has a certain degree of freedom to ask further questions if deemed necessary. Thus, the research has been primarily conducted in qualitative nature. Moreover, Bryman and Bell (2003) states that the link between theory and research is important to consider while conducting research. The authors further argue that there exist two main clusters: deductive and inductive. Bryman and Bell (2003) distinguishes between the two theories where deductive research is described as an approach where existing theories guides the research conducted. While, generated theory as an outcome of research can be described as an inductive approach. This thesis mainly uses an inductive approach where theories have been generated based on the empirical findings. However, Bryman and Bell (2003) advocates that the link between theory and research can be seen as a complex matter and despite chosen approach, research often entails both approaches to a certain degree. Which, can be seen in this thesis as an inductive approach regarding the collection of data have been used, while a modicum of deductive research has been used to formulate the research questions. 22 In terms of research design, this thesis has been using a cross-sectional approach, where interviews have been conducted from multiple clients within four different industries. Bryman and Bell (2003) further advocates that cross-sectional studies can be defined as a method where the researchers gather data from more than one case at a single point in time in order to compare two or more variables in order to examine and detect patterns. 3.2 Research Process As stated earlier this study has mainly a qualitative nature, as a result the research process model is influenced by the model proposed by Bryman & Bell (2003, figure 13). The model proposed by Bryman & Bell (2003) emphasizes on an iterative process where for instance the researcher can collect further data if deemed necessary. The research process applied in this case is represented in figure 6, where the two-way arrows connecting the initial process from initial literature review to analysis, and indicates an iterative process where the researchers can go back if deemed necessary. Figure 6: The Research Process 23 The initial phase was characterized by an initial literature review and a meeting with Crepido to define the research questions and the purpose of the study. The process was iterative and the researchers went back to the literature review until research questions and a purpose was defined. The research then proceeded on to a more extensive literature review, where a theoretical framework was derived from. Eventually contact was made with relevant companies and meetings were set up either over physical meetings or telephone- or Skype meetings in the cases which physical meetings were not feasible. The process was iterative and the researchers made continuous adjustments to their theoretical framework as a consequence of the empirical findings. When all of the data was collected and the theoretical framework was completed, the researchers moved on to the analysis phase where the empirical findings resulted in a qualitative discussion, enhanced from the theoretical framework and ultimately conclusions were made, while further research was stated. 3.3 Literature Review Easterby-Smith et al. (2015) argues that a literature review is an important part of any study, where the review will provide the researchers with a basic understanding of the topic and how it has developed over time to identify gaps in the field of research. This study has adopted a traditional literature review which Easterby-Smith et al. (2015) describes as “summarizing a body of literature and draws conclusion about the topic in question”. As described earlier, the researchers of this study chose to conduct two literature reviews. The first one was an initial review with the aim to put the research in its context which according to Easterby-Smith et al. (2015) is necessary. For instance, the initial review helped the researchers understand the extent of Enterprise Agility and identify the area which the researchers wanted to undertake. Additionally, the researchers incorporated a theoretical lens in shape of project management approaches in order to investigate whether a company’s project management approaches could be a factor to consider when it comes to a company’s enterprise agility approaches. Moreover, as described earlier the research process had an iterative nature and as a result the literature reviewed continued throughout the whole research, which according to Easterby-Smith et al. (2015) is prevalent regarding most studies. As a result, both the research purpose and the research question were both gradually changed throughout the research process. 24 The later literature review and the theoretical framework was intended to provide the researchers with a basis to gather empirical data and the following analysis. The iterative process was chosen to ensure that a sufficient degree of relevant theory was achieved without applying a systematic literature approach which is described by Easterby-Smith et al. (2015) as a process where all available relevant theory on a topic are summarized. Moreover, Easterby-Smith et al. (2015) argues that a good literature review should include a broad variety of sources, and depending on the topic, the researchers might need to review academic literature that is not peer-reviewed. The topic Enterprise Agility is fairly new within the academic world, and as a result the researchers reviewed a broad area of literature, where insights from the literature review has been used as a foundation for the theoretical framework in order to gain enough contribution for the execution of the empirical study. The extensive literature review enabled the researchers to identify gaps within current literature in regard to this study. Where the framework proposed in this study is based on existing literature and provides an extension of existing literature, as a result the literature review enables the researchers to justify the study being undertaken, which according to Easterby-Smith et al. (2015) is one of the purposes of the literature review. Figure 7: The review process (Easterby-Smith et al., 2015) 25 The researchers followed the review process proposed by Easterby-Smith et al. (2015). The process can be divided into three stages. In the first stage the literature review needs to be defined in terms of topic, breadth and aim. This is important as for instance keywords needs to be selected which can be applied in the second stage, which is that literature needs to be identified and evaluated. In this study, keywords were generated from the initial literature review in regard to scope and aim. These keywords were then used on mainly google and Chalmers online library to identify and evaluate existing research. Moreover, these keywords were also used to identify physical existing literature from mainly Chalmers library. The researchers also slightly adjusted the keywords as well as used synonyms in order to achieve a satisfactory breadth, which is further advocated by Easterby-Smith et al. (2015). In the last stage, the literature was organized and included in the review. The following themes were used: Project Management, Enterprise Agility, Scaled Agile, and Organizational Change. The broad literature review has thus enabled the researchers to achieve a satisfactory degree of background knowledge about the previously mentioned themes, whilst the theoretical framework has provided the researchers with the primary theoretical lens needed in order to conduct a rigorous and focused analysis. Moreover, the researchers used a combination of the search strategies trawling and fishing (Easterby-Smith et al., 2015) where due to restricted previous knowledge of the topic resulted in an initial trawling with the aim of providing the researchers with a comprehensive oversight of the topic, followed by fishing, where the researchers conducted as more targeted search. 3.4 Data Collection The empirical data has been gathered with the use of client interviews within the four chosen industries: energy, industrial, forest and real estate. The interviews have been conducted using different platforms such as google meet, Skype and over the phone, but also by physical meetings. Moreover, 10 interviews of approximately 40-60 minutes each have been conducted within companies of the target industries. Out of these companies only one company had previous affiliation with Crepido. All companies operate in Sweden and have an estimated size of between 100 - 1000 employees. The number of employees have been the only search criterion used where the reasoning behind this is that the researchers assumed that mid-sized companies are more 26 frequent in a transition state in comparison to large and small companies and would thus provide the researchers with more valuable insights to this study. The chosen companies were found using either contact information provided from Crepido or with the use of the companies’ websites and/or LinkedIn profiles. The chosen representatives from the client companies are rather homogenous where the main title was IT manager, but HR manager and Project Managers have also been prevalent, as presented in table 5. The similarity of titles goes in line with the reasoning applied by the researchers regarding the selection of companies. The IT managers have primarily been targeted due to their knowledge of agile methodologies, while project managers and HR managers have secondarily been targeted due to the possibility of knowledge spillover from the IT section within the companies. Furthermore, it is believed that IT and the rest of the organization have different business priorities which might be a colliding factor for an agile transition. The interviewees have been contacted primarily through emails, where the initial contact has been made either through the reception or directly to the targeted interviewee. The interviews were conducted with the use of an interview template which is presented in Appendix A, questions were divided into four different areas: organization, project management, industry and digitalization. An initial question regarding the interviewees background was also applied. The questions regarding the organization were formulated to provide the researchers with an insight regarding how the company manages change, the culture and an overall insight into the company. The project management section had the primary aim to provide the researchers with insight regarding project models used by the company and the reasoning behind the chosen models. Further questions regarding agile methodologies were also asked to gain an understanding of the interviewees knowledge of agile but also the departments knowledge of agile overall. The section competition/industry specific was included with the aim to understand how the company interacts with competitors and their customers. The last section digitalization was included in order to gain an understanding of the company's own perception of the term digitalization and how the company utilizes digitalization within the department or company as a whole. Moreover, the interviews were structured using a semi-structure, where the researchers had a predefined interview template, but could ask follow-up questions and change the order of the 27 questions depending on how the interview developed. Bryman and Bell (2003) argues that semi- structured and unstructured interviews are prevalent when conducting qualitative research, where the approach tends to be more unstructured as the researchers have a greater interest in the interviewees perspective, as structured interviews does not provide the researchers with the desired degree of flexibility to follow up potential leads that might arise during the interview. Thus, the structured approach is not suitable when conducting qualitative research. Table 5: Interviewee roles Company Position A IT Manager B IT Manager C Project Manager D Marketing & Logistics Manager E IT Project Manager F Managing Director G HR Manager and IT Manager H Project Manager I Project Manager J IT Manager and Head of Strategy 3.5 Analysis of data As stated earlier in this research, the nature of the research is rather qualitative, and as a result the empirical data is also of qualitative nature. As a result, the data analysis needs to be managed accordingly to these preconditions. 28 3.5.1 Qualitative Data Analysis Easterby-Smith et al. (2015) argues that there exist numerous ways to analyze qualitative data, the most prevalent method being used however is the grounded theory. Corbet (2017) describes the process of grounded theory as: “The methodological process utilizes actual data gathered through field work to identify, develop, and integrate concepts” (Corbin 2017, p. 301) Easterby-Smith et al. (2015) further argues that the comparative method is another common method to analyze data within qualitative research, which is described as a process where the researchers studies a certain event or process applied in different situations. The researchers however chose the grounded theory due to the methods process of deriving theory after the data collection and not prior (Corbet, 2017). Due to this study's research process as illustrated before in figure 5. As a result, the researchers concluded that the grounded theory would align well as a way to analyze the gathered qualitative data. In comparison, the comparative method was concluded to be less suitable as the method relies upon predefined theory and is considered as less iterative in comparison to the grounded theory (Easterby-Smith et al., 2015). Noble and Mitchell (2016) describes the process of analysis of data as a three-step process as illustrated in figure 8. Figure 8: Grounded theory data analysis by Noble and Mitchell (2016) The process starts with codes, where the aim is to perform an open coding where the researchers identifies and highlights phrases and move them into subcategories followed by categories. The categories are then grouped together, which enables the researchers to form theory. This process 29 provides the researchers with the opportunity to reflect and theorize over the gathered data, thus enabling the researchers to understand the gathered data. Moreover, data will be compared to identify similarities and anomalies (Noble and Mitchell, 2016). Since the researchers have conducted the data analysis in accordance with the grounded analysis approach, figure 8 serves as a description of the steps taken by the researchers, where the researchers initially gathered all the data in one place. The researchers primarily used the online tool google drive to store all the data, which enabled the researcher with easy access and an overview of the data. The data in google drive also served as a backup in the event that something would happen to the original data. The coding process followed a continuous process and was done in parallel with the data collection over a 9-week period. Moreover, the coding process was iterative and the researchers went back to previous data as new data were collected to identify new relationships between the data or strengthen previous relationships as well as to identify anomalies. After the initial overview and an initial coding the researchers identified one core category which served as the main phenomena around which other categories were built. The core category were barriers and enablers, as a result the following data collections and coding primarily targeted the keywords barrier and enablers, and keywords that might be related to these words in accordance to the theoretical framework. Over time, more categories were included which eventually led to theory being formed and discussed further in the analysis. 3.6 Research Quality An essential part of any research is the quality of the research which needs to be assessed in regard to certain criterias (Easterby-Smith et al., 2015). The most prevalent criterias are reliability and validity. Where reliability is used to assess if the research can successfully generate the same result on every occasion it is tested, and if the result can be applied in different contexts (Easterby-Smith et al., 2015). While validity is used to assess the determination of alternative plausible explanations to the researchers results and the generalizability of the research (Easterby-Smith et al., 2015). However, these criterias are more suitable for quantitative research, and as qualitative and quantitative research are fundamentally diversified, other criterias should be applied in order to assess the quality of qualitative research in regard to reliability and validity, which is further 30 advocated by Bryman et al. (2011) and Stenbacka (2001). Moreover, Bryman et al. (2011) advocates that as a replacement qualitative research should be assessed in regard to four different criterias: Credibility, Transferability, Dependability and Confirmability. In order to ensure that research will be useful, the quality of it needs to be assessed (Easterby-Smith et al., 2015). The quality of research refers to the assessment or evaluation of research that has been conducted and to do so, two commonly applied assessment criterias are validity and reliability; the criterias are concerned with ensuring integrity and reliability of the research respectively (Bryman & Bell, 2003). However, the relevance of these criteria for qualitative research have been questioned since, for instance, the definitions of the criteria are more concerned with aspects which are more related to quantitative research. This is of concern for this research, which is of qualitative nature, and therefore an alternative means to assess research quality is applied. This is based on different aspects of trustworthiness, which are: credibility, transferability, dependability and confirmability (Bryman et al. 2011). Moreover, Bryman et al (2011) argues that credibility and transferability corresponds to internal and external validity. While, dependability and confirmability corresponds to reliability and objectivity in quantitative research. 3.6.1 Credibility Credibility corresponds to internal validity which ensures that the researchers have a correct understanding of the conducted observations (Bryman and Bell, 2003). As a result, this research has taken steps to ensure that the generated theoretical ideas which are built upon the gathered data matches the conducted observations. The conducted interviews which were allowed to be recorded enabled the researchers to review them multiple times and thus increase the credibility of this research. Moreover, the interviews were always conducted with both the researchers present where one took notes while the other asked the questions. This enabled the researchers to achieve a replacement for transcript for instances where recordings were not allowed. Furthermore, all notes from interviews were gathered and uploaded into google drive and were reviewed continuously throughout the research, thus also increasing the credibility of this research. On the negative side, most of the interviews were held in Swedish, which consequently had to be translated into English by the researchers which can negatively affect the credibility. The translated interviews were then sent to the interviewees, which allows for revision and correction of misinterpreted data. This 31 ensured an increased internal validity in terms of data gathered. Ultimately, as this research examined and identified trends and anomalies in regard to all the conducted interviews and existing literature, it can be argued that the researchers applied triangulation, which according to Bryman and Bell (2003) is a method which can be used to increase the credibility and validity of the research, which is further advocated by Jick (1979). 3.6.2 Transferability Transferability corresponds to external validity (Bryman et al., 2011). Which refers to the degree of generalizability the research has. Easterby-Smith et al. (2015) advocates that qualitative research has been under negative criticism in regard to the research ability to be applied to other setting. This criticism can be applied to this specific research as well as this research has limits and specific settings. As the research have been geographically limited to companies operating primarily within Sweden and an employee size of between 100 - 1000 employees it is concluded that this research cannot be applied in other context, and as a result has a low degree of transferability. However, transferability can be achieved by further research that extends this research. For instance, similar research can be conducted within a setting that includes companies of all sizes that primarily operates within Sweden. Thus, by comparing similar research with this research, transferability can be achieved. 3.6.3 Dependability Dependability corresponds to reliability, which refers to the degree of which random errors has been eliminated in the research (Bryman and Bell, 2003). In order to achieve a common understanding of the gathered data, the researcher had a discussion after each interview to ensure that the understanding of the interview was common. Moreover, the researchers also reviewed the notes taken during the interview in regard to the discussion to ensure that the notes reflected the common understanding. If there were any diversifying opinions, a review of the recording or the notes was done, depending on whether the researchers were allowed to be recorded or not. Moreover, steps taken to ensure that the research could be replicated were done by describing the chosen client cases in terms of operating industry and employee size. The anonymity of the client cases, may however lead to that the exact same client cases might not be selected. Moreover, the researchers also described the representatives interviewed which also enables further research to 32 conduct similar research. Ultimately, the researchers also specified the research process and the reasoning behind every step, it is therefore concluded that the researchers have taken several steps in order to increase the dependability of this research. 3.6.4 Confirmability Confirmability corresponds to objectivity, which is described as the degree of which the research has been conducted in good faith (Bryman et al., 2011). It is argued that the researchers have not in any way tried to affect the result of this research. Moreover, Crepido had no previous relationship with the researchers and the researchers did not receive any compensation for the conducted research. Crepidos functions and expertise enabled the researchers to undertake the study, but the research was undertaken primarily for academic purposes, it is therefore argued that Crepidos involvement does not affect the result of the research. Moreover, although one client company had previous affiliation with Crepido, the researchers chose to present all data with anonymity which means that no data can be traced back. It is therefore argued by the researchers that the result of this research has not been or neglectable been affected in any direction. 3.7 Ethics Research within social sciences almost always involve gathering data from people, and research ethics concerns the management of information provided to the researchers by people (Oliver, 2010). The purpose of research ethics is to guide the researchers to avoid conducting research that might harm another party (Resnik, 2011) where Shamoo and Resnik (2009) advocates the importance to recognize the conflict between research and business interest. This thesis has been conducted in partnership with Crepido, where the thesis was requested from the researchers. Therefore, it is argued that there has been no conflict of interest regarding potential business interest and the research. Moreover, this study did not harm any participants, as the researchers ensured that consent was given from the case companies as well as anonymity were provided. Therefore, it is argued that the researchers have taken the necessary steps in order to ensure that a satisfactory degree of research ethics were achieved. 33 4. Empirical Findings In this section, the empirical findings will be presented in the shape of cases. The primary purpose is to consolidate and present findings gathered from interviews amongst traditional organizations with interviewees from top management who have insights about the organization as a whole. The interviews can also be found in appendix B, where the researchers have refrained from asserting their own interpretations. 4.1 Company Selection and Interview Focus The companies selected for interviews have been screened in regard to company size and industry, as previously mentioned in 3.4. The industries chosen, have thus been the energy, industrial, forest and real estate industries, constituting what the researchers define as traditional organizations. The interviewees are in managing positions constituting the business side as well as the IT side of the organization. The main reason for doing this is due to the researchers’ beliefs, derived from the background and literature review, that different parts of the organization have differing knowledge about enterprise agility. With that said, since the interviewees are in managing positions, they have the knowledge and ability to answer questions regarding the enterprise dimensions. Thus, this approach allows the researchers to gain insights from different sides of an organization in regard to potential enablers and barriers to enterprise agility. Questions have been formulated specifically with the purpose to identify factors which might be an enabler or barrier to enterprise agility, within each of the enterprise dimensions which for clarifying purposes consists of organization, project management, industry, and digitalization. Adaptability within the industry dimension is defined according to: low = do not actively identify customer trends and take a longer time to adapt, intermediate = actively try to identify customer trends but have difficulties in adapting quickly, and high = actively try to identify new customer trends and can adapt quickly to changes. 34 4.2 Company A Company A is large actor which is part of a larger conglomerate within the forest industry. The company is a commodity manufacturer, specializing mainly in the refinement of wood and timber. The interviewee is an IT project manager who has worked at the company for 7 years. Table 6: Findings from interview with company A Enterprise Dimensions Findings from interviews Organization • Hierarchical structure • Continuous organizational changes • Changes were difficult due to a high average age • Has designated improvement teams for product development and digitalization Project Management • Use a defined project model called Wenell, basically a stage-gate model which is used widely used by many, but not all functions • Have experienced clashes in resource allocation where autonomy has been given to project teams • Have started looking at the Scaled Agile Framework in order to manage resource allocation issues • Largest issue with enterprise agility is the alignment between IT who has specialized knowledge in agile, and the rest of the organization’s interests Industry • Increasing customer demands • Demographic shift occurring • Increased digital aptitude • Intermediate to high adaptability - strives to align strategies to meet customer demands and believes that adapting is easy and frictionless depending on the task Digitalization • Concerns securing data and information that are critical to business processes, in order to take action on the information at hand • Use centralized systems to become more efficient • Digitalization within the company has become more prominent in recent years, with self-service portals being implemented which reduces manual labor. 35 The interviewee brought a nuanced perspective to the adoption of enterprise agility. Mainly, it can be seen that the interviewee was overall positive to the agile methodologies, but can see the difficulties in getting the rest of the organization to understand the advantages of being an agile enterprise. However, it can be seen that enterprise agility could be an alternative to meeting the shifts in the industry dynamics, as the company is perceived to have an intermediate to high adaptability, meaning there is a desire to identify and adapt to new demands. An intriguing finding from the interview is that the company has actually looked into the SAFe framework as a means of trying to allocate their resources properly. It can thus be derived that it is not only changes or issues within the external business environment which drives the agility agenda, but also internal issues. The initial outlook for enterprise agility for company A seems somewhat challenging, seeing as the company’s change culture seems as a huge threshold to overcome, as well as the hierarchical structure which might make change a complex task to undertake. 4.3 Company B Company B’s core business revolves around owning and administering forest and is evidently active within the forest industry. The company owns forest constituting of approximately 50B SEK and have around 120 employees. The interviewee is the IT manager for company B who has a background within system development and project management. Table 7: Findings from interview with company B Enterprise Dimensions Findings from interviews Organization • Hierarchical, but described as non-existent on a daily basis • Joint venture between two larger forest companies and thus have found challenges in integrating two different cultures • Changes within the organization has been made where a centralized intranet was implemented with the purpose of consolidating communication channels • Resistance from employees was substantial, but was successfully managed through involving them in the process Project Management • Outsource most of their projects to consultants, who bring their own project models with them • Most common project management models are XLPM, Wenell and Scrum 36 • Agile mindset only within IT, rest of the organization unfamiliar with the concept of agile • Biggest challenge is to bridge the gap between specialized knowledge of agile within IT, to the rest of the organization who are unfamiliar with the concept Industry • Competition well known amongst actors in the industry, thus everyone has insights in each other’s working methodologies • Policy changes are of great importance and is something they monitor continuously • Intermediate adaptability - do not actively identify new customer trends, but are trying to do so moving forward although it is perceived as difficult to react swiftly to new information Digitalization • Iterative process of the combination of technology which drives new services and generate new customer expectations, which in turn generate new demands for new technology • New customer demands come from young people with high digital aptitude • Greater understanding of digital has come from the onboarding of younger employees Similar to company A, company B also has a hierarchical structure. However, the hierarchical structure is described as “something on the organizational chart” by the interviewee, and highlights that it is rather non-existent on a daily basis. Word of caution here is that interviewees are normally biased and thus comments which might be detrimental to their reputation are usually brushed off as non-impactful. Therefore, the researchers have chosen to be cautious in the analysis of such answers in the subsequent chapter. Something that stands out for company B is that they have successfully managed resistance to the changes from their employees in regard to historical organizational changes, which bodes well for future changes as well. Here, it can also be seen that the agile mind-set is most prominent within the IT function, and the interviewee explicitly state that the rest of the organization have little to no knowledge about agile. The knowledge about agile is also not their own, seeing as they outsource most of their projects to other consultants. In the case that the consultants leave the company, the knowledge about agile disappears with them. The interviewee also state that they are in a complex supplier-customer relationship, as their customers are also their suppliers. Therefore, they do not actively try to monitor new customer trends, but have been giving thoughts to how they can meet new demands from young people, seeing as there is a demographic and technological shift occurring to younger people who have a larger digital aptitude. 37 4.4 Company C The company is active within personal hygiene and healthcare sector. The interviewee currently works as head of project management and has held the position for the previous 10 years. Table 8: Findings from interview with company C Enterprise Dimensions Findings from interviews Organization • Flat structure, but moves towards a hierarchical structure • Have experienced a successful major organizational change • Young organization • No designated team for continuous improvement but works with HMEX, and has a culture characterized by constant improvement Project Management • Works according to a waterfall model, including project manager and project owner • Unsuccessful implementation of agile methodologies • Works according to portfolio management • Leadership and the nature of projects identified as main challenges regarding implementation of agile methodologies Industry • Well informed regarding approaches used by the 3 main competitors • Constantly tries to identify new customer trends, and has a designated department called “Category Executive” • Ability to adjust to emerging customer trends is assessed to be intermediate Digitalization • Defined as: everything one can exploit from the digital world to become more efficient • Have always worked with digitalization, but it has escalated in the last few year The interviewee describes the organizational structure as flat, but are moving more towards a hierarchical, mainly due to the necessity to align and control the way that communication flows. This, in combination with being a rather large company, speaks against the prospects of becoming agile. Additionally, they do not have an exploratory unit which work with continuous improvements which is further detrimental to gaining new knowledge. The company works with waterfall models and is something that the whole organization does as a part of a centralized approach through their Project Management Office (PMO). While they have looked into agile methodologies as a project management approach, they have seen limited success doing so, further corroborating the issue companies have with becoming an agile enterprise. 38 4.5 Company D Company D is a Swedish manufacturer of electronic applications and have approximately 130 employees and 400M SEK in revenues. The interviewee is the COO of the company and is also responsible for commercialization of their products. He has been at the company for 17 years and thus have a great knowledge about the companies as well as their working approaches. Table 9: Findings from interview with company D Enterprise Dimensions Findings from interviews Organization • Historically a flat, but moving more towards a hierarchical organization as a consequence of being acquired by a private equity company • Organizational culture described as Swedish business mindset with short decision- making lead times, flat leadership and open doors • Organizational changes have been made successfully in the past to become more cross functional • Uneasiness amongst employees as a consequence of the change process was overcome with the emphasis from top management that they care about their employees and ensuring that their work will stay where it is • No designated teams for continuous improvements, but have explicit statements on strategic level where adapting to new competences, time-to-market and technology is crucial Project Management • No defined project model, but have been looking at Tietos PPS project management model • Project revolves around internal business development and product development • Product development customer-centric and starts with R&D specifications, then moves on to production and ultimately commercialization • Feel that there is a need for governance and cost control • Visiting customers have had opinions about their working approaches, thus there are internal and external needs to become more structured in their projects • Biggest challenge is the lack of knowledge about agile, but believes it is an effective approach to working, and is one of the reasons to having looked into different project models Industry • Belief that agile is a very uncommon concept in this kind of industry • Rapidly changing customer requirements, but no one works agile to capture and act on the requirements • The company has a high adaptability - constantly look into new customer demands and can meet them in a swift manner Digitalization • The company utilizes different kind of systems to become more efficient in their daily work, mainly by consolidating internal information • Rate of digitalization within the company has increased throughout the years as a consequence of new owners and managers coming in, which puts higher requirements on rapid and accurate reports 39 Company D is an example of an organization in which enterprise agility could have been feasible when being a small company. The organizational culture is described as a Swedish business mindset with short decision-making leadtimes, which is something that agile methodologies emphasize. However, since being acquired by a private equity company, new cultures and influences have penetrated the company, which is becoming more hierarchical in order to accommodate for the organization’s reporting standards. The company has no defined project model that they work with, which is something that customers have given their opinions on. Furthermore, there is no internal process for project management but rather an ad-hoc one. Therefore, it can be seen that while the company could adopt agile methodologies as a way of working in projects, they might need to find an appropriate way of conducting projects first, seeing as agile methodologies puts demand on the organization’s flexibility, something that the company is not perceived to have. The interviewee however state that agile could be an effective way of working and is something that drives the company into looking at different project models. Thus, it can be seen that agility agenda can be grounded on internal or external influences. It is however perceived difficult, seeing as agile is a very uncommon concept within the manufacturing industry, and especially in the electronical applications domain. The interviewee see that the customer demands is changing drastically, but cannot utilize agile methodologies to capture the changing requirements due to the lack of knowledge about agile and the scaling of it, which is something that is a detrimental factor to the adoption in the industry as a whole. 4.6 Company E Company E is a manufacturer who has products ranging from power distribution, climate control and electrical equipment, mainly focused within two divisions: industry and IT. The interviewee at company E is the Business Development Manager within the company’s IT segment. He has been at the company for almost a decade and has had operative as well as strategic roles. 40 Table 10: Findings from interview with company E Enterprise Dimensions Findings from interviews Organization • Argued to be a flat structure with clear line of reporting to divisional managers • Cultural deviations between the industry and IT divisions • Process level changes has included changes in methodology - basically trying to go from waterfall process to becoming agile • Belief that being 100% agile is not feasible due to the company’s current infrastructure - some products require installations which cannot be reverted after a certain point has been reached. Being agile from start to finish may therefore not be feasible • Transitioning from waterfall to agile require changes in methodologies and thus also affect the employees, which therefore require continuous communication from top management about why changes are necessary Project Management • Use a defined stage-gate project model in order to plan and execute projects • Have recently tried adapting some of the stages to the agile principles, creating a compound model for working • Belief that agile is the way to go moving forward • There are similarities between waterfall and agile where project owners controls at the gates, and therefore exist a belief that an agile mindset can be implemented in order to change the way we think about project execution • The biggest challenges lie in creating milestones in order to control the process, while also knowing where you are going. This deviates from agile since iteration cannot be made when a certain point has been reached • Involvement of all parties is seen as a necessity to overcome challenges Industry • The industry standard is the usage of waterfall processes • Company E is one of few who has experimented with agile • High adaptability - have widespread knowledge from different functions while also being able to respond to changes quickly Digitalization • Development in the industry, moving from robotics and automation to Internet of Things (IoT) • Technology is driving changes, which puts requirements on internal processes to keep up to new standards to remain competitive and meet customer demands The interview with company E does not differ much to the previous interviews in terms of organizational structure. However, something intriguing is the cultural deviations in the different departments of the organization, which could be seen as organizational subcultures. This makes it rather difficult to align the decision-making processes to the whole organization if different parts of the organization do not share the same culture. The interviewee believed that the agile is good way of moving forward when it comes to identifying, capturing and acting on customer requirements. However, due to the nature of the 41 company’s current infrastructure, the interviewee believed that being 100% agile is not feasible. This is mainly due to the fact that certain products cannot be reverted to a previous state after that state has been passed, which speaks against the iterative nature of agile. Therefore, it is believed that agile can be incorporated into the current waterfall processes, rather than being a standalone full agile solution. There are certain similarities in both approaches which might make a hybrid waterfall-agile approach feasible. As previously mentioned in the interview with company D, this could be a way of meeting customer requirements continuously, while having a structured approach to conducting projects, something that the industry lacks knowledge within. 4.7 Company F Company F is a manufacturer of circuit boards based in Sweden, but has production facilities outside of Sweden. They have 250 employees, where 100 of them are based outside of Sweden at the production facilities. The interviewee is the C