Power Distance and Agile Transformation

Many of us have come across a situation where a leader (a senior member of the management or a political leader) has made a mistake or followed a wrong course of action and many of his subordinates, even when they knew it to be wrong, did not correct or confront the leader. Instances like this happen more in some cultures and less in some other cultures. But if you have witnessed a scenario like this, it is a concept called Power Distance at play.

Put simply,  Power Distance is the extent to which power is unequally distributed in a culture or organization. It is also the extent to which a “less powerful” member  accepts the power to be unequally distributed. So in cultures with lower power distance, any difference in power between individuals is not readily accepted and would require a justification. In such cultures, attempts may even be made  to reduce the power distance between individuals. No such justification is required in cultures with a higher power distance.

What does this have to do with Agile Transformation ?

For an Agile Transformation to succeed three outcomes are important – Better Innovation, Higher Throughput and Higher Customer Satisfaction.

Innovation

Small innovations make 80-90% of the companies development portfolio, they are necessary for continuous improvement – making existing products and services better. Most companies will have a process whereby customer feedback is channeled into the development process to make this possible. It really doesn’t matter too much if these are top down or bottom up.

The other 10-20% are the high value innovations, the ones which give the company an edge over the competition, these are the riskier ones. It is these innovations that need to be driven through the front lines with the management giving them support. In cultures with high Power Distance, this is the part that suffers. Opinions that matter are not expressed or discussed. Leaders in these cultures expect employees to follow them unquestioningly, without reason or justification and employees expect the direction of their bosses to supersede everything including organizational welfare.

Throughput

Improvement in throughput is an outcome of removal of waste. Removal of waste can be evolutionary, where the current process is gradually improved or disruptive, where the new process radically changes the approach to fulfilling the same need. Realization of both these approaches need collaboration and leadership across all levels in the organization.

In high power distance cultures people accept hierarchy  and direction as a reality of life. The manager’s position in the power structure and therefore the collaboration grid will ensure that he/she is central to communication with in the team. This will create a bottle neck to collaboration and prevent the team from self-organizing. Also, in such cultures because leadership is derived from positional power, situational and adaptive leadership fails to emerge.

 

All this inevitably affects throughput. In such cultures since failure to improve throughput is viewed as a failure of leadership, you can notice  misrepresentation of data thus preventing any possibility of inspecting and adapting which brings us to the next point.

Customer Satisfaction

One of the key aspects of customer satisfaction is the cultural power distance of the customer. Customers from “high power distance” cultures are more accommodative of deficiencies in service than from “low power distance” cultures. An organization or team with its “high power distance” culture will never be able to satisfy the demands of a “low power distance customer” primarily because it will lack the empowerment to make things happen for the customer in the very short periods of time.

Conclusion

As Peter Drucker once said, “Culture eats strategy for breakfast”. This is true even in the Agile Transformation context.  When an organization wants to develop its capability to be an Agile organization and embarks on the transformation path there are many questions which need to be reflected on like –

  • What is our current culture ?
  • What is our power distance like, are we a High Power Distance or Low Power Distance organization ?
  • What is our National Power Distance ? How does that relate to our organizations power distance ?

Power Distance is a cultural factor which is very often ignored during an Agile Transformation most often with disastrous results because resistance to change due to this factor is difficult to diagnose.

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