Agile Controlling - Agility basics - Meaningfully using Agile Methods and an Agile Mindset in Controlling - Controller-Akademie
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Agile Controlling –
Agility basics
Meaningfully using Agile Methods and an Agile Mindset in Controlling.
by Marie-Luise Lehmann / Imke Keimer / Ulrich Egle
Individuals and interactions instead of processes and
tools. Responding to change instead of following a
plan. Even just those two basic values from the Agile
Manifesto likely cause a sense of unease in many con-
trollers. They seem too radical and too far away from
daily controlling practice. Is it not precisely the accura-
cy of the planning, that marks the quality of the con-
trolling? What happens when adhering to the plan is
not required anymore? Is controlling redundant then?
Almost 20 years after publishing the Agile Manifesto (cf.
Beck et al, 2001), agile practices are as relevant as ever. It
seems as if agility is a key criterium for the long-term
success of companies and drivers of innovation. Why is
that? And how can agility be implemented in controlling
in a meaningful way that brings added value for control-
lers and companies both?
Fig. 1: The so-called VUCA-world
6 Controller Magazin | Edition 1 | 2021
AGILITY
Change of the Corporate lersfrequently adopted so far, of delving agile mindset have been proven to master
Environment into their world of figures in a concentrated these complexities. Therein lies the oppor-
manner to develop analyses and possible tunity for the controller. If they adopt the ag-
Let us first take a look at what problem solutions, is no longer expedient here. Be- ile methods and mindset, they will be better
agility actually solves: Driven by globaliza- cause even with great efforts to define and able to cope with the demands of an in-
tion and digitization, the corporate world is analyze all causalities, controllers regularly creasingly complex world and contribute to
undergoing lasting change. For example, fail in everyday professional life when try- the company's success in a sustainable and
exponential data growth, disruptive tech- ing to use the analysis of the past to draw value-creating way. They will strengthen
nologies, new business models or the re- conclusions for the future in this complex their reputation by providing additional val-
duction of market entry barriers are creat- environment. At the same time, the de- ue to management and become the busi-
ing an unsteady environment. This is char- mands on controlling are changing. It is ness partner they should be.
acterized by supposed to fill the role of business partner
■ Constantly changing business conditions and be an advisor to management. In a Agility –
(volatility), study, however, 80% of the CFOs surveyed What does it Mean?
■ unpredictability (uncertainty), expressed concern that their team lacked
■ uncertain cause-and-effect relationships the skills to actually meet these expecta- Agility, as we understand it today, goes back
(complexity) tions (cf. Half, 2016). to a meeting of 17 lateral thinkers from the
■ and of ten not clearly assessable circum- IT industry. They met at a ski resort in Utah
stances (ambiguity) (cf. Fig. 1). Dealing with unpredictability in the face of just over 20 years ago to draw up a new set
constantly changing conditions, uncertain of rules for software development. The fo-
The controlling function is feeling this cause-and-effect relationships, and ambig- cus should no longer be on the actual devel-
change too and is faced with the challenge uous evaluations thus requires not only a opment process, but on the added value for
of confronting the VUCA world (cf. Schäffer new mindset, but also an expansion of the the customer. Based on this idea, the Agile
and Weber, 2019). The approach control- controller's toolbox. Agile methods and an Manifesto was born.
Fig. 2: Overview Agility
Controller Magazin | Edition 1 | 2021 7
AGILITY
What was initially planned as a simple framework for creating business partner, and thus to take an equal
value-based development methods soon kick-started a seat at the table in board and management meetings
revolution in working life. Because it additionally de- as an internal consultant. Controlling accomplishes
scribes a value model based on trust and mutual re- this, for example, by moving confidently in the world of
spect. It promotes working methods based on people, both agility and planning accuracy. It is able to find and
collaboration, and building organizational communities position itself in hybrid organizational structures that
in which you want to work (Psychological Safety). are no longer hierarchical and not yet agile. Further-
more, it is skilled at correctly understanding issues in
In this context, the term agile encompasses the entirety their respective context and selecting an appropriate
Marie-Luise
Lehmann
of mindset (BEING AGILE) and many different operation- solution strategy. Because it knows: Agile methods are
al implementation options (DOING AGILE) (cf. Fig. 2). The not a miracle cure and are not suitable for all issues in a
Is an expert for Agile Finance, basic idea of agile working is to enable innovation so that company and therefore not in controlling either (- but
Keynote Speaker and agile companies can react quickly to changing conditions an agile mindset is!). In general, all necessary methods
founder of Finance Goes and requirements. Agile working is characterized by should also be used in agile controlling if they lead to
Agile. She leads the ICV Work
Group Agile Controlling.
flexibility, team orientation and adaptability in the pro- an expedient answer to the problem. Ultimately, effec-
marie-luise@ cess. tiveness and efficiency must be the focus when work-
financegoesagile.com ing to achieve the objectives of situations and tasks.
While the topic of mindset is largely represented Therefore, a general decision for or against agile meth-
through the depiction of values and principles in the Ag- ods should not be made per se. The respective context
ile Manifesto, the area of operational implementation is decisive.
options is constantly expanding through new methods,
practices, and tools. The goal is usually to enable even Agile Methods
better responses to complexity while promoting trans-
parency, collaboration, and adaptation. Almost all agile As explained earlier, agile methods expand the control-
methods have game-like elements and work heavily with ler's toolbox and help address issues where traditional
visualizations (e.g., white boards, flip charts, maps, Post- approaches (e.g., checklists) fail.
Its, digital workspaces). This contributes to transparency
and allows the team to see their tasks and their progress A good decision-making aid when it comes to selecting
at all times. between the multitude of agile and non-agile methods is
the Cynefin model (cf. Snowden and Boonem, 2007). It
One of the best-known agile methods is Scrum. The defines five areas which, depending on the problem, rec-
terms Scrum and agile are often mixed or equated. How- ommend whether to use agile methods or not (cf. Fig. 3).
ever, Scrum is only one of many agile methods that con- The Cynefin model distinguishes tasks and situations de-
Prof. Dr. Imke
sists of fixed roles, processes and events that enable agile pending on the respective approach in the five areas: Ob-
Keimer
work. Examples of other methods are: Design Thinking, vious, Complicated, Complex, Chaotic and Disorder.
Is a professor of Business Lean Start-up, Kanban, Objectives and Key Results (OKR) With knowledge of this system domain, it is possible to
Analytics at the Lucerne or Liberating Structures. This list is by no means exhaus- classify control processes and select the appropriate
University of Applied tive (cf. Sutherland and Schwaber, 2020). method. Following the correct classification of a task or
Sciences and Arts – Business.
situation in the Cynefin model, the controller can select a
Her research focuses on
controlling, where she Agility is therefore not just a suitcase full of methods, it suitable method from a variety of them. This can be both
mainly deals with the topics also encompasses new ways of thinking and approaches agile and non-agile.
of digitization and agility. and thus a new mindset. Collaboration takes place
imke.keimer@hslu.ch
across hierarchical levels and in interdisciplinary teams. One of the most important success factors for projects is
This requires letting go of the original value model – to take the time to really understand the problem. If you
which is often not easy, especially at the beginning. do not work cleanly at this stage and try to solve complex
projects with simple methods, you will fail in the end.
Agility in Controlling However, if it is recognized that there is a number of un-
knowns, then the iterative-learning approach presents
There are many reasons why the topic of agility should itself as an opportunity to maintain the flexibility need-
be tackled in controlling. The arguments so far have ed to solve a complex problem. This is why Cynefin is so
mainly gone in the direction of supporting the compa- successful. It encourages people to analyze the situation,
ny in coping with the challenges of the VUCA world. We select a pattern of action, act on it, evaluate the effect,
want to think a little further. Because it is also a great and adjust their behavior if necessary.
opportunity for controlling to consolidate its own posi-
tion within the company in the long term. To move In the following the individual areas are briefly discussed
from its role as a number cruncher to that of a value- and examples in controlling are shown.
8 Controller Magazin | Edition 1 | 2021
AGILITY
Prof. Dr. Ulrich
Egle
Is a professor for Controlling
and Digital Transformation
at the Institute for Financial
Services Zug IFZ of the
Lucerne University of
Applied Sciences and Arts –
Business. He leads the ICV
Work Group for Agile
Controlling. In spring 2020 he
started with the “Finance
Excellence” podcast.
ulrich.egle@hslu.ch
Fig. 3: Cynefin-Model
Obvious tasks can be delegated and of ten include previously
standardized processes.
Obvious situations and tasks are characterized by the
fact that the path to the goal is clearly defined. A cause- Examples: Standardized reporting, simple control calcu-
and-effect relationship can be recognized, and a correct lations, routine diligence tasks.
solution exists.
Agile methods are not strictly necessary for these tasks
In controlling, this means that hardly any prior or expert and can easily become a complexity driver. If used cor-
knowledge is required for these situations and tasks. The rectly, however, they promote transparency here as
well.
Complicated
Summary Complicated situations and tasks have defined objec-
Agility offers controlling the opportunity to meet the tives, but dif ferent approaches to solving them exist.
challenges of the VUCA world. The establishment of Although a cause-and-ef fect relationship exists, it is
the agile mindset and the selective use of agile met- not necessarily obvious and of ten still needs to be
hods brings relevant issues to the fore and enables the analyzed.
controlling function to act quickly and flexibly. The
first part of our series Agile Controlling shows how In controlling, expert knowledge is required for these sit-
agile methods and agile mindset can be used in cont- uations and tasks. In addition, these tasks often require
rolling in a meaningful way. thinking outside the box and working across depart-
ments and disciplines. There are short decision-making
processes and thus a high speed of implementation.
Controller Magazin | Edition 1 | 2021 9
AGILITY
Examples: demanding standard processes Chaotic a culture of learning is established in which
(e.g., reporting/commenting on annual/ new things are tried out and understood as
monthly financial statements with many de- If neither objectives nor potential solutions an opportunity to fulfill (internal) customer
pendencies), establishment of company are known and no known cause-and-effect benefits ever better. It helps to minimize
guidelines. relationship exists, a situation – more com- risks, as there is continuous questioning,
monly than a task - is chaotic. Chaotic situa- learning and, where required, adaptation.
Agile methods are suitable here, for exam- tions require immediate action. Dealing
ple, to address dependencies and resource with them requires a lot of intuition and ex- Agile methods without an agile mindset are
estimates early in the process. Especially in perience. Fortunately, such situations occur doomed to failure because the important
interdisciplinary teams, a common under- rather rarely in comparison. core elements of transparency, respect and
standing of the problem is crucial for the the application of the value model are miss-
successful completion of the project. Chaotic situations arise primarily in extreme ing. A company, and consequentially also a
scenarios where no best practice and no controlling function, does not work in an ag-
Complex past experiences exist. As an example, one ile way if it reduces agility only to the meth-
could cite the sudden loss of the entire com- ods. Agile methods and agile mindset
In complex situations and tasks, there are pany sales or also refer to the lockdown dur- should be seen as a unit like yin and yang
both dif ferent objectives and dif ferent ap- ing the Corona crisis, which presented many and implemented as such. Establishing the
proaches to solving the problem. Dif ferent companies (and thus also the respective mindset is often the more difficult task and
approaches compete, contain unknown pa- controlling functions) with great challenges. one of the reasons why people speak of agile
rameters, and cannot be planned conclu- transformation processes.
sively at the time the task is set. An explora- Here, methods that contribute to rapid deci-
tive approach with iterative phases and sion-making but still actively involve all The challenges on the part of the CFO or the
feedback is often necessary. team members (e.g., 1-2-4-ALL) are helpful. controlling manager therefore lie not only in
imparting methodological competence, but
In controlling, for example, this could be the Disorder also in working on the topic of mindset. This
introduction of a BI-tool. Here, agile meth- requires a willingness to change, which is a
ods are initially suitable for a common un- For these situations and tasks, it is still un- major hurdle for those controllers who value
derstanding of the problem by all stakehold- clear as to which area they should be as- planning security and shy away from disrup-
ers and the project team (e.g., through De- signed to. After they have been classified as tion. All too of ten, the controller's first im-
sign Thinking). Subsequently, the possible one of the other four areas, a decision can pulse is to bring certainty and clarity to an
solutions can be checked for their feasibility then be made about the use of the methods. issue through excessive planning precision.
(e.g., Business Model Canvas) and accept- There is often a lack of awareness that issues
ance criteria for the final result can be devel- Overall, the Cynefin model makes it possible should be solved dif ferently. This is also a
oped (e.g., through Liberating Structures). to select a suitable method as an approach part of the agile mindset. It makes it possi-
This is followed by the implementation of for a situation or a task. It should be noted ble to see the entire range of possibilities
the project (e.g., with Scrum). that the boundaries between the areas are and to decide on a suitable method depend-
fluid and not every situation can be clearly ing on the situation. In summary, we define
classified. Complex, complicated, and cha- agile controlling as follows:
otic situations are particularly suitable for
the use of agile methods. Fundamentally, it If this succeeds, then agility is the opportu-
can be said that the more unclear the path nity for controlling to not only provide sig-
Agile Controlling and objective are, the more sensible it is to nificant support to the company in its own
use agile methods. agile orientation, but to also become a driv-
Agile controlling means that a control- er of agility in the company itself. Con-
ling function places the provision of the Transferring the Cynefin model to the VUCA trolling can expand and consolidate its po-
greatest possible (internal) customer world explains the success and the necessity sition as a business partner if it is actively
added value at the center of its daily of agile methods. involved in the change processes in the
work. To this end, it establishes the agi- company and supports it in setting the
le mindset, draws on a toolbox of clas- Agile Mindset course for agility. In this way, controlling
sic and agile methods, and is able to ap- can not only adapt its own service sector to
ply the method appropriate to a given Beyond the selection of the appropriate the needs of agility, but also play a pioneer-
situation or task (Cynefin model). The method, DOING AGILE, the agile mindset, ing role in the company and establish an
value of agile controlling is that it ena- i.e., BEING AGILE, must not be neglected (cf. agile mindset and agile methods. In the
bles teams to focus on the relevant is- Fig. 2). best case, the controller is an integral part
sues and thus to respond more quickly of every agile team, since he not only plays
and flexibly to the challenges of the Agile mindset is the way in which the indi- the agile keyboard, but also brings the fi-
VUCA world. vidual and the organization handles and ac- nancial perspective and the cost perspec-
cepts uncertainties. To counter uncertainty, tive to the interdisciplinary team.
10 Controller Magazin | Edition 1 | 2021AGILITY
Conclusion
Literature
Agility of fers an opportunity to meet the Beck, Kent, et al. (2001): Agile Manifesto: https://
challenges of the VUCA world. Agile meth- agilemanifesto.org/iso/de/manifesto.html
ods are particularly suitable for these tasks. Half (2016): FINANCE 2020: https://www.roberthalf.de/
sites/roberthalf.de/files/legacy-pdfs/finance2020_ro-
However, an agile mindset is also required
berthalf_de.pdf.
to accept these challenges as a constant and
Schäffer, Utz and Weber, Jürgen (2019): Controllers
to deal with them as a learning organization. Beitrag zum agilen Unternehmen. In: Controlling &
The controller is not redundant here, but in- Management Review. 04, 2019, p. 58-66.
stead plays a decisive role in the company's Snowden, David and Boonem, Mary (2007): A Leader's
activities as a business partner, whose im- Framework for Decision Making. In: Harvard Business
portance is expected to increase even fur- Review. November 2007, p. 69-76.
Sutherland, Jeff and Schwaber, Ken (2020): Scrum-Guide:
ther. Successfully established agile con-
https://www.scrumguides.org/index.html.
trolling is the control center, business part-
ner and advisor of the company and is there-
fore of vital importance.
This article is a part of the series Agile Cont-
rolling. In the next part you will learn more
about the agile toolbox of the controller. ⬛
ICV Work Group Agile Controlling
Ulrich Egle and Marie-Luise Lehmann lead the new ICV Work Group Agile Con
trolling. In the work group, we discuss solutions for setting up and operating agi-
le finance and controlling departments and develop them further. All necessary
agile aspects are considered, from the agile mindset to the adequate use of agile
methods, to flexibly meet the future challenges in finance and controlling de-
partments.
We are looking forward to welcoming interested members. Event information and
registration via the ICV-homepage, heading Work Group Agile Controlling:
www.icv-controlling.com or via e-mail to the heads of the work group.
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