Agile team structures may stunt innovation and creativity, study finds

July 5, 2022, 1:55 PM UTC
Making the switch to agile or flat team structures can lead to culture issues.

Many organizations have switched to agile, or flat, team structures, with few levels of middle management between leadership and employees. The common belief is that a flat structure offers workers more autonomy, improves decision-making, and spurs innovation. Yet new research shows that it may also give rise to informal management structures that lead to peer pressure and reduce innovative output.

A recent paper published in the Journal of Product Innovation Management examines the connections between agile teams and innovation, and finds that despite the increasing popularity of self-managing teams, they do not always enhance innovation.

Agile teams typically work autonomously and are able to plan, manage, and execute tasks interdependently to attain a common goal, the authors say. But these types of teams typically lack critical control systems, which the authors define as mechanisms that ensure alignment between employees’ capabilities, actions, and performance with organizational goals and aspirations.

“If managers believe that they just take [agile structures] off the shelf and implement it…it may be a big mistake,”  says Saeed Khanaga, an associate professor of strategy at Vrije University Amsterdam and lead author. Agility is a good concept in theory, he tells Fortune, “but it’s something that needs to be adjusted as you implement it, according to some issues that may arise and according to the needs of the organization.”

The authors collected data from 97 research and development teams at a Fortune 500 telecommunications company, assessing team dynamics, workloads, and perceptions of team innovation. Agile teams reported feeling a higher sense of peer pressure and restrained from pursuing new projects that don’t contribute to product plans or short-term deadlines.

“They want to do something different, something creative, but they feel pressure to comply,” Khagan says.

Researchers warn that this kind of peer pressure hurts innovation. While managers may be inclined to believe agile teams can run themselves, teams need structure, especially when tackling complex tasks. Managers must scrutinize and alter existing processes to ensure that teams have time to pursue big, innovative ideas.

Khanaga says that when leading agile teams, the manager’s role becomes “extra important.” Managers who set clear targets and manage employee workloads well are better able to mitigate peer pressure and give team members some freedom to pursue new, creative projects.

Some may think slight pressure to perform at work is a positive. But Khanaga says it’s detrimental to creativity. He adds that a strong focus on meeting short-term deadlines can prevent long-term success and reduce employees’ intrinsic motivation, a trait that is tied to discretionary effort and innovative outcomes.

“Peer pressure implies that team members adhere to collective norms and rules, with violations resulting in various forms of sanctioning by the team,” the paper says. For these individuals, “a sense of introjection arises because they are driven by external regulation…[they] are not operating in response to explicit directives but are instead following the expectations of others.”

This results in a culture that discourages new ideas and novel ways of doing things.

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