Advantages of Agile organizations

Questions on Spotify

Question 1

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Agile organizations can change rapidly in a manner that creates new alignment when the business environment changes. As a result, many organizations have begun to pursue agility in their operations due to the advantages it promises. Five trademarks define agile organizations.

The first one is NorthStar which is embodied across the organization. The agile organization has an entirely different perception of how they create vale and whom they create it for (Aghina, np). They include various stakeholders to make value, such as suppliers, customers, and the local communities. Furthermore, agile organizations have a network of empowered teams. Spotify, an example of an organization that has embraced agility, has semi-autonomous terms know as a squad that works towards the company’s missions and goals (Aghina, np). Agile organizations are rapid in decision-making and have an entrenched learning culture. They also have a dynamic people model that spurs creativity and innovation.

Advantages of Agile organizations

Organizational agility enhances the adaptability of the organization, which is good for the dynamic business environment. An agile structure breaks down bureaucracies and complexities within an organization, making change easy. Furthermore, agile teams lead to increased alignment between teams’ activities and the company’s mission (Agnihotri & Bhattacharya, 9). Also, it enhances product quality and innovation. Agile organizations also promote continuous learning and improvement, as in the case of Spotify.

Disadvantages of agility in organizations

Despite its advantages, agility in an organization has its drawback, including loss of employees due to redundancy. Also, implementing the agile model requires substantial investment in human resources and technology, which could be capital intensive. Furthermore, there might be productivity losses due to the learning process needed, especially at Finance corp.


Question 2: Why an Agile structure contributed to Spotify’s Fast growth

Spotify managed to have more than 159 million subscribers by 2018 and a revenue of more than USD 4.9 billion, making it a global leader in music streaming services (Agnihotri & Bhattacharya, 5). The main reason for the accelerated growth at Spotify is the adoption of an agile structure of operation. An agile system at Spotify enabled it to place more trust than control on its employee. Trusting employees boosts Morales and leads to higher productivity. In addition, the agile structure at Spotify created a perfect environment for learning and continuous development, enabling the company to produce many innovative products. The learning atmosphere also helped Spotify to address customer concerns adequately.

The agile structure at Spotify encouraged experimenting. Employees were encouraged to test and learn software development with regards to customized music for its customers. Experimental failures were not penalized at Spotify. Instead, the management encouraged the employees to perceive the failure as a learning opportunity. This not only spurred innovation and creativity but also enhanced employee motivation hence boosting productivity.

Part of the management philosophy of agile organizations has a highly vibrant and well-networked team within the organization. For example, Spotify had well-established squads, each with a distinct mission. Each team’s mission complemented the mission of the other units and was aligned to the company’s overall mission (Agnihotri & Bhattacharya, 7). According to Spotify, the teams created made Spotify able to swiftly address the changes in the marketplace through fast decision making. In addition, having the power to make decisions and initiate product development ideas, the squads enabled Spotify to tame competition on time and prevent other behemoths such as Netflix and apple from taking their market share away.

Question 3:

How Spotify’s agile structure created Impediments for its Financial Growth

Despite its accelerated growth in subscribers and revenue size, Spotify’s bottom line was unimpressive as it continuously made losses up to the year ended 2018 (Agnihotri & Bhattacharya, 5). Spotify’s costs were higher than its revenues. We could blame, to some extent, the financial woes facing Spotify for the adoption of an agile structure. An agile design may be costly in the short term as it involves acquiring the requisite technology and infrastructure. Furthermore, the learning process required during the initial stages of implementing the agile structure may lead to productivity loss hence the losses witnessed at Spotify.

The leadership and management required to ensure the smooth operation of the autonomous squads are significant. Spotify had to use many resources to address the challenge and provide that even as the teams were independent, they had to optimize its goals and mission (Ahlback, 2019). Implementation of an agile structure would necessitate new talent management approaches and systems. Spotty had to invest in capacity-building programs. It also had to re-envision its management and hiring practices which could have increased its costs substantially.

Question 4

Ivan, the CEO of Financial Corp, should lead his company in transitioning his company from a hierarchical model into an agile structure. One of the main motivations would be the numerous advantages promised by the adoption of an agile system. The other reason would be due to the desire of the company to cement its position as the industry leader (Agnihotri & Bhattacharya, 6 ). As a result, financial Corp will be a trailblazer in the financial sector to use structure and hence will have the first-mover advantage by transitioning into an agile design.

The business environment is highly dynamic. The financial sector is especially facing sweeping changes and technological disruptions that are likely to disturb the status quo. One of the main advantages of adopting an agile structure is that it would put Financial Corp at par with technological advancement. It will also mitigate the risk of redundancy and being rendered obsolete in the rapidly digitizing economy.

Transitioning to an agile structure would be successful for Financial Corp since it will enhance the speed of service delivery to its customers. It would also provide an enabling environment for financial innovation to create more excellent value to its customers. The future belongs to those organizations that are willing to take a bold and decisive decisions. Transitioning into an agile structure is a bold and decisive move for Financial Corp, which promises more advantages and disadvantages.

Question 5: Improvements that Ivan’s financial firms could make by adopting agile philosophy or agile team structure elements without wholesales transition agile.

There are several aspects of the agile structure that Ivan’s financial firm could borrow without fully transitioning to the agile design. For instance, the company could borrow autonomous squads and well-networked teams (Agnihotri & Bhattacharya, 7). The financial firm could use these teams to spur innovation and accelerate its pace to meet its intended mission. It could also borrow the aspect of continuous learning and development. The management of Financial Corp could implement learning programs for its employees. The administration could organize workshops and seminars to enhance the skills and knowledge of its staff members in several financial areas.

One of the principles of agile structures is embracing failure and promoting experimentation. Therefore, Financial Corp could borrow the aspect of encouraging new ideas and rewarding new opinions on how to conduct particular tasks (Agnihotri & Bhattacharya, 9). Furthermore, it could lessen its hierarchical stance and encourage more collaboration between members of staff who belong to different ranks. Financial Corp’s management should foster effective communication between all employees and strengthen its feedback mechanism. It is the presence of an effective feedback mechanism and effective communication that will facilitate new ideas and solutions in the company.

Question 6: Concepts identified in the case

Several concepts present themselves in the case study analyzed. First, the idea of organizational structure is evident from the case study. Various organizational structures exist. For instance, Financial Corp uses a hierarchical network with several layers and a long chain of command. (Agnihotri & Bhattacharya, 3). On the other hand, Spotify uses an agile structure with fewer bureaucracies and l foster more collaboration. Before Spotify adopted an agile organizational structure, it had a flat structure.

The concept of learning and continuous improvement is clear from the case study.

For organizations to enhance their chances of success, they ought to invest in the training and development of their personnel. Continuous improvement enables the organization to serve the customer better since it involves actioning on customer’s feedback. Another concept evident from the case study is that one of teams and squads. Effective teams can accelerate the growth of an organization to a great extent. The company mission can be divided into small actionable steps that can be acted upon by the individual teams. Other concepts that can be derived from the case study include organizational growth and innovation.

Case Difficulty Cube

A case difficulty cube is a framework that enables the reader to focus on the most challenging aspects of the case. The case difficulty cube analyzes three elements of a case, namely: analytical and conceptual. We would categorize our case study at level 2 in the case difficulty cube. The case study’s decisions are not presented on the analytical aspect but based on the information provided; it is evident what the main problem is. Conceptually the case is at level 2 also as it contains concepts learned in previous courses. Finally, the case study presentation is at level 1 since it is well organized and contains little extraneous information.

Works Cited

Aghina W. “The five trademarks of Agile organizations.” McKinsey & Company, 22 Jan. 2018,

Agnihotri, A., and S. Bhattacharya. “Spotify’s Agile organizational structure: Is it a good fit for a financial services firm?” 2019, doi:10.4135/9781526487230.

Ahlback K. “The drawbacks of agility.” McKinsey & Company, 2019,


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