DI in Industry (DIiI)
Neu-Ulm University of Applied Sciences
April 4, 2026
Agile organizations are both stable and dynamic at the same time. They design stable backbone elements that evolve slowly and support dynamic capabilities that can adapt quickly to new challenges and opportunities. McKinsey & Company
What does agility in a general business context mean?
The term agility has been increasingly used in management literature since the late 20th century (Harraf et al., 2015).
Around the same time, agile approaches gained prominence in software development, leading to the publication of the agile manifesto in 2001 (Beck et al., 2001).
Over the past two decades, organizational theorists have focused extensively on how agile performance enable companies to successfully adapt to rapidly changing and unpredictably disruptive environments (see e.g., Adler et al., 1999; Grewal & Tansuhaj, 2001; Judge & Miller, 1991; Smith & Lewis, 2011).
Several common themes in literature Harraf et al. (2015) have identified:
Literature suggests that organizational agility can neither be reduced to a singular dimension nor is it appropriately calibrated in absolute terms. In terms of the four key points outlined before, organizational agility can be formally defined as follows:
It is the ability of a firm to sense and respond to the environment by intentionally changing (1) magnitude of variety and/or (2) the rate at which it generates this variety relative to its competitors (Harraf et al., 2015).
It is a firm’s ability to sense changes in its environment (like customer preferences, new technologies, etc.) and respond effectively and intentionally by adjusting what it does.
Agile organizations explore and exploit opportunities for innovation and competitive performance by resolving the efficiency/flexibility tradeoff to simultaneously pursue both. Sambamurthy et al. (2003)
In general, ambidexterity refers to the combination of both incremental, more efficiency-oriented innovation (i.e., exploitation) and radical, novelty-oriented innovation practices (i.e., exploration) (Clauss et al., 2021).
Operational ambidexterity “relates to a firm’s dual capacity to simultaneously pursue not only the implementation of disruptive ideas [… ] but also the enhancement of the firm’s current operational speed, reliability, and cost” (Lee et al., 2015, p. 401).
IT ambidexterity relates to “the ability of firms to simultaneously explore new IT resources and practices (IT exploration) as well as exploit their current IT resources and practices (IT exploitation)” (Lee et al., 2015, p. 398).
Lee et al. (2015) shows that IT ambidexterity enables operational ambidexterity, which enhances organizational agility.
How does IT relate to organizational agility?
IT competence describes a firm’s ability to translate available IT resources into strategic digital options (Sambamurthy et al., 2003).
Digital options are IT-enabled capabilities in the form of digitized work processes and knowledge systems (e.g., digital process capital3 and digital knowledge capital4) that the firm can exercise selectively as conditions evolve (Sambamurthy et al., 2003).
These capabilities are not acquired instantaneously. They emerge from a series of linked strategic decisions about IT investment over time (Sambamurthy et al., 2003).
The richness of a firm’s digital option set therefore depends on how its digital artifacts are architected, i.e., which properties make options broad, fast, and externally extensible.
Strategic agility demands a sense-respond loop. Three structural properties of digital artifacts determine how fast and how broadly that loop can operate: modularity, reprogrammability, and programmatic interfaces.
The structural properties of digital artifacts are the architectural enablers of the two agility dimensions Harraf et al. (2015) identify: they determine how broadly a firm can change its variety (magnitude) and how fast it can do so (rate).
Modularity decomposes a system into loosely coupled, independently deployable components.
Modular architectures therefore directly increase the magnitude of variety change (Harraf et al., 2015): the same component pool yields a wide range of differentiated products, services, and processes on demand.
Reprogrammability allows a digital artifact’s encoded logic to be altered without changing its physical substrate (Yoo et al., 2010).
This decoupling is the primary digital lever on the rate of variety change (Harraf et al., 2015): the speed at which a firm executes, tests, and revises a strategic move.
Programmatic interfaces (APIs) standardize the terms on which a firm’s digital capabilities connect to and draw upon external parties.
APIs are therefore the digital foundation of partnering agility (Sambamurthy et al., 2003): the ability to marshal external assets and knowledge rapidly in response to market opportunities or threats.
| Digital trait | Mechanism | Strategic outcome |
|---|---|---|
| Modularity | Recombinability | Maneuverability: breadth of feasible responses |
| Reprogrammability | Logic fluidity | Versatility: speed of operational change |
| Interfaces (APIs) | Interconnectivity | Ecosystem agility: depth of externally leveraged capacity |
Each trait generates digital options: pre-positioned capabilities the firm can exercise selectively as environmental conditions evolve (Sambamurthy et al., 2003).
The same structural properties that make digital systems agile must be present in organizational design for digital options to be exercisable.
| Organizational design | Mechanism | Agility outcome |
|---|---|---|
| End-to-end teams | Team recombination (i.e., recombinability) | Structural maneuverability |
| Sprint / PI planning | Priority reconfiguration (i.e., fluidity) | Strategic versatility |
| Defined team contracts | Reduced coupling (i.e., interconnectivity) | Inter-team agility |
A modular technology stack paired with siloed departments cannot recombine quickly; both layers must be co-designed (Sanchez & Mahoney, 1996; Skelton & Pais, 2019).
Types of agility supported by IT as identified by Sambamurthy et al. (2003):
The approach to IT project management defines how IT resources are developed, orchestrated, and, best case, translated into strategic digital options.
The foundation of methods to agile IT project management is the agile manifesto (Beck et al., 2001), which defines following key values and principles:
These key values and principles aim to enable organizations to better deal with rapid changes in customer demands, markets and technology by, e.g., decreasing lead-time, increasing change rate, and the degree of variety change.
How do agile methods like scrum implement the key values and principles?
Agile project management methods were originally designed for use in small, single-team projects (Boehm & Turner, 2005).
Compared to small projects and teams, large projects and organizations require additional coordination (i.e., inter-team coordination)
In addition, adopting agile at scale often requires tradeoffs as interacting with organizational units that are often non-agile in nature is required (e.g., HR) and/or a change of the entire organizational culture (Misra et al., 2010) .
Another key challenge is that management must move away from traditional hierarchical models (e.g., lifecycle-based) to autonomous, iterative models (e.g., feature-based), which requires a change of mindset.
Dikert et al. (2016) define large-scale as software development organizations with 50 or more employees or at least six teams.
All people do not need to be developers, but must belong to the same organization and develop a common product or project, and thus have a need to collaborate.
This definition includes both software development companies and as the parts of larger (non-software) organizations that develop software (i.e., the application development unit within corporate IT).
Dikert et al. (2016) identified challenges in nine cateogires for large-scale agile transformations
To address challenges to adopting agile methods in large, more traditional organizations, several agile scaling opportunities have been created (Dikert et al., 2016; Uludağ et al., 2021, 2022).
Examples
| Short name | Long name/topic | Publ. year | Cur. year | Stand. org. |
|---|---|---|---|---|
| LeSS | Large-Scale Scrum | 2013 | 2015 | The Less Co. |
| Nexus | Scaling Scrum | 2015 | 2018 | Scrum.org |
| SAFe | Scaled Agile Framework | 2011 | 2020 | Scal. Ag., Inc. |
| Spotify | Scaling agile | 2014 | 2014 | Spotify |
A framework developed by Dean Leffingwell (2011) as a synthesis of Lean, Agile, and DevOps principles for enterprise-scale delivery
SAFe scales by composing layers. Each configuration adds the layer above to the previous one.
| Configuration | Adds | Suits organizations with |
|---|---|---|
| Essential | One ART, PI cadence, core ceremonies | A single value stream, 50–125 people |
| Large Solution | Solution Train coordinating multiple ARTs | Complex solutions requiring several ARTs and suppliers |
| Portfolio | Lean Portfolio Management, strategic themes, value stream funding | Multiple value streams requiring strategic alignment |
| Full SAFe | All layers active | Enterprises operating across all of the above |
Configurations are not maturity stages. An organization with one value stream stays at Essential and is not “less mature” than one running Full SAFe, but it has a different problem.
All four configuration levels are simultaneously active in one company, here Zalando (Berlin-based online fashion retailer operating across Europe wit approx. 17,000 employees):
SAFe is engineered for adapters more than disrupters (Harraf et al., 2015).
The cadence-based design optimizes the rate of variety change through synchronized inspect-and-adapt loops, but the same cadence limits the magnitude per cycle..
SAFe is not “more agile” in an absolute sense. It is a particular design point in the agility space.
Agile Release Trains instantiate the modularity argument at the organizational level.
ARTs therefore expand the firm’s magnitude of variety change (Harraf et al., 2015): the same pool of teams can be reconfigured to serve a wider range of strategic responses without redesigning the organization.
The Program Increment instantiates reprogrammability at the organizational level.
PI cadence therefore directly governs the rate of variety change (Harraf et al., 2015): the speed at which the organization can intentionally redirect its delivery capacity.
Team interaction patterns instantiate the programmatic interface argument (Skelton & Pais, 2019).
The Architectural Runway is the internal technical equivalent: pre-built code, components, and infrastructure exposed to ARTs as a stable platform on which near-term features can be built without redesign.
How does SAFe structure the exploration–exploitation balance (Lee et al., 2015)?
Exploitation: the PI delivery cadence with committed team and ART objectives drives execution discipline; teams deliver working increments against a known plan.
Exploration: the IP iteration and Architectural Runway provide structural capacity for innovation, debt reduction, and capability building outside normal delivery pressure.
| Digital trait | SAFe analog | Mechanism |
|---|---|---|
| Modularity | ARTs and Solution Trains | Recombinable team-of-teams aligned to value streams |
| Reprogrammability | PI cadence, I&A, IP iteration | Periodic re-prioritization without restructuring |
| Programmatic interfaces | Team interaction patterns, Architectural Runway | Standardized integration points across ARTs |
SAFe is, read this way, an applied instance of Sanchez & Mahoney (1996)’s claim: modular technical architectures both require and produce modular organizational forms.
SAFe addresses the agile challenges discussed by Dikert et al. (2016), but it can also exacerbate them.
Challenges addressed by SAFe’s structural mechanisms
Potentially aggravated by SAFe’s design choices
The framework that scales agility relies on heavy process scaffolding, in tension with the manifesto’s “individuals and interactions over processes and tools.”
Potential dysfunctions
A firm can be procedurally compliant with SAFe and still be an indifferent on the Harraf matrix, going through the motions of synchronized cadence without generating meaningful variety change (Harraf et al., 2015).
SAFe suits organizations with:
SAFe suits less well when:
Magnitude of variety change includes the decision alternatives generated, different strategies deployed, new products and lines introduced, non-routine tasks added to the repertoire of routine tasks, and product variations offered.
Rate of variety change—defines the temporality of change and relates to the change in variety per unit of time.
Digital process capital is the IT-enabled inter- and intra-organizational work processes for automating, informating, and integrating activities (e.g., customer acquisition, order fulfillment, supply chain, product innovation, and manufacturing flow) and creating a seamless flow of information (Sambamurthy et al., 2003, p. 247).
Digitized knowledge capital is the IT enabled repository of knowledge and the systems of interaction among organizational members to generate knowledge sharing of expertise and perspectives (Sambamurthy et al., 2003, p. 247).