Doing Agile and Being Agile

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One of the questions that often comes up in the workshops on organisational agility that I run with senior leadership teams is when are agile, iterative processes appropriate and conversely when are they not?

My belief is that in general, many of the principles that surround agile (like data-driven decision making, regular delivery of value, customer-focus, continuous learning, adaptability) are undervalued in business and should be more broadly applied in an environment of rapidly changing competitive, consumer and company contexts. But the wider point is that agile is not just a process, it defines a culture. This is what agile practitioner Michael Sahota described as the difference between doing agile and being agile.  It’s the difference between practices and mindset. And as Michael points out, being agile should not be an isolated goal — it needs to run alongside other objectives that give direction. An agile mindset and culture can be a powerful enabler to progress, but it’s about progressing towards those organisational goals in an agile way.

In my experience this is a significant mindset change for leaders schooled in more structured, waterfall-like, processes and thinking, operating in an environment characterised by embedded organisational practice, routines and conventions that are far from agile.

But what of agile as a process? Whilst doing agile (and more generally iterative, sprint working) is, I think, also undervalued and overly confined in most businesses, it is not applicable to absolutely everything. Simon Wardley talks a lot of sense about this when he describes the reasons that you need multiple methods within a company,  appropriate for different evolutionary stages of a value proposition or components to a system. Such components can mature from the new and uncharted (characterised by discovery, higher levels of unpredictability, uncertainty, and potential differential), to the more common and industrialised (more certain and predictable, appearance of linear order). Agile is naturally suited to charting new territory and building new value in an environment of rapid change since it is far more adaptive. More industrialised, well-established and well-understood components that are highly stable and repeatable are more effectively managed by a highly structured method (like six-sigma for example).

It makes sense that different methodologies are appropriate for different contexts. My point to many leadership teams though, is that in the context of a modern operating environment that is characterised by heightened levels of change and uncertainty, we need far greater emphasis on emergent strategy, experimentation and adaptive, iterative, agile ways of working. Put simply, we need to completely reset the balance.

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High Velocity Decision-Making

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In the book we talk about how organisational agility is not just about speed. Speed is desirable of-course, and an increase in velocity may well be an outcome and a benefit of becoming more agile as a business but heightened agility is really all about manoeuvrability (or speed of response) and momentum, which is not quite the same thing.

Key to this idea of manoeuvrability is how you make decisions. In his most recent shareholders letter Jeff Bezos of Amazon talks about how focused they are on ‘high velocity decision-making’ as a way of retaining agility as they scale. Many larger, well-established businesses, he says, make high-quality decisions, but they make them slowly. So making high quality but also high-velocity decisions helps retain the nimble, responsive abilities of a much smaller, younger business.

It’s important not to operate by a one-size-fits-all decision-making process. Many less complex, more easily adapted decisions can be subjected to a more light-weight process. In many cases, decisions can be made with around 70% of the information you wish you had, which is important since waiting for the 90% can easily mean you’ll be too slow, and slow decision-making can be more costly than needing to do a quick course correction if necessary as long as you jump on misalignment quickly. At Amazon they also use the phrase “disagree and commit” as a useful way of acknowledging disagreement whist preventing a lack of consensus from slowing things down.

In my experience there is also a high correlation between the degree of empowerment and autonomy present in teams and how quickly you’re able to make decisions and therefore the manoeuvrability of the organisation. In slow-moving environments it might work to have most of the decision-making power centralised at the top of the company but amongst rapidly shifting contexts this practice is not fit for purpose. Yet as Mark Raheja points out, there are many different things that can contribute to this greater (but safe) devolvement of authority including the clarity that comes from being more explicit about decision rights, how you set the team up, more agile forms of governance, the ownership of team members and the willingness of senior staff to let go. And there’s a whole bunch more intangible (but no less powerful) factors that I think contribute to this, not least whether the culture supports greater autonomy or acts to stifle it, the behaviour and expectation of leaders in the organisation (at every level), and the degree of trust that permeates the business.

Once again, the ability to make decisions quickly and become a more responsive organisation is as much about culture and people as it is about process.

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Building Momentum for Change: The Progress Principle

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In Building the Agile Business, we focus on how sprint working can be a powerful driver of both rapid organisational learning and strategic adaptability. Done right it can not only create new value and be applied in the creation of new products and services, but can support far wider organisational change and be used to find a way through key business challenges, and re-orient the business towards heightened levels of experimentation. Learning and continuous improvement are embedded in the fabric of this working methodology (not least in the regular retrospectives that are conducted at the end of each sprint). Flexibility and adaptation are too, in the regular reprioritisation of the backlog or jobs to be done. As continuous learning generates improved ways of getting stuff done and achieving key goals, sprint working can support growing organisational momentum towards an over-arching vision or objective.

But there is something else about sprint working, another way in which it can contribute to building momentum for change, that is less often discussed – it’s role as an inclusive, motivating, energy-generating way of working. When I’ve been demonstrating the benefits of operating in sprints to clients in talks and workshops, a couple of people have mentioned to me Teresa Amabile’s concept of the Progress Principle.

At the heart of this concept is a simple, but very compelling idea – the power of progress:

‘Of all the things that can boost emotions, motivation, and perceptions during a workday, the single most important is making progress in meaningful work. And the more frequently people experience that sense of progress, the more likely they are to be creatively productive in the long run.’

Amabile’s extensive workplace research (based on thousands of daily surveys) has shown that above more visible and extrinsic rewards and incentives, a key driver of creative and productive performance is the quality of what she calls a person’s ‘inner work life’, or that mix of emotions, motivations and perceptions experienced over the course of a work day:

‘…How happy workers feel; how motivated they are by an intrinsic interest in the work; how positively they view their organization, their management, their team, their work, and themselves.’

A positive inner work life, characterised by these qualities, is fundamental in enabling higher levels of achievement, commitment and even collaboration. When the team looked at the triggers that shaped how positive this inner work life was on any given day, it was meaningful progress (however large or small) made by the individual or team that was the key determinant. Setbacks against progress created a negative inner work life. Surrounding this were ‘catalysts’ (those actions that directly support work) and ‘nourishers’ (including encouragement, respect or recognition) that contributed towards positive emotions. ‘Inhibitors’ (things that negate progress), and ‘toxins’ (things that discourage or undermine) had the opposite affect.

This makes intuitive sense, and yet so much in the workplace seems designed to inhibit or discourage. Waterfall processes can often involve lengthy time periods where work is done but with limited visible signs of value (particularly value for the end users) being generated. It is often characterised by large project teams that become unwieldy and difficult to move forwards at pace. How often have we stepped away from a project and returned later only to find that nothing has really moved on from where we left it? Sprint working is not a panacea, but the point about it is that it is designed around tangible, visible progress. Releasing early and often. tracking velocity against goals. Reprioritising based on learning.

It is my belief that digital transformation is as much about employee experience as it is about customer experience. And if employee engagement is so key to the process we need to consider ways of working and operating environments that are intrinsically motivating and emotionally engaging. We need to generate a positive sense of progress to generate momentum.

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Structuring for Change: The Dual Operating System

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In our book, we discuss some key approaches towards structuring for digital transformation and organisational change, and one notably useful model comes from Kotter’s Accelerate, in which he describes a structural model designed to enable the rapid development of new ideas and models whilst still maximising the operational efficiencies needed to manage business as usual. He calls it the dual operating system.

The challenge facing most incumbent businesses is how you deliver against the current targets and short-term business requirements but still leave room to create the next breakthrough. Traditional management hierarchies are well optimised for execution, delivery and efficiency but they are not structured for innovation, concurrent, and responsive working. For that you need a more networked approach that is more agile, adaptive, and able to act at speed to capitalise on opportunity. So Kotter describes the need for a dual operating system that combines the entrepreneurial capability of a network with the organisational efficiency of traditional hierarchy: the network is ‘more like a start-up’s solar system than a mature organization’s Giza pyramid’. But one powerfully complements the other:

Most startups are organised as networks before they evolve into bigger businesses with reporting relationships and org charts, and in large organisations informal networks of change agents (often operating under the hierarchical radar), are frequently the ones making new things happen, and happen faster. But the challenge with informal networks is that they are often not very visible, and are difficult to sustain. If the network is a constantly evolving solar system, says Kotter, then the guiding mechanism is the Sun, strategic initiatives are planets, and sub-initiatives are the moons or satellites.

Having a dual operating system enables you to capitalise on key needs of the modern business – executing against short-term targets and business as usual and managing existing models to be ever more efficient and predictable, whilst still solving new problems, developing new value, disrupting existing norms. One (hierarchy) is more focused on management, the other (network) on leadership, but both are needed.

Kotter has a few key principles to support the effective dual system. He talks about the importance of many people from various parts of the business driving the change, rather than a few appointees – a ‘volunteer army’ if you like. And I do think that there is something very powerful in enabling those who want the change to happen to be the ones to make it happen. In my experience it’s always the people who are really passionate for change that end up really driving it.

He also talks about a ‘get-to’ mindset, not a ‘have-to’ one. And I think the idea of energy here is a useful one. Simple physics tells us that change requires energy, and I think there is far more momentum created when people are minded to want to go in a particular direction rather than being told to. It’s heart, and not just head, supported by a big opportunity that people can believe in.

And he talks about how the two systems need to be inseparable, with a clear line of communication and oversight, whilst still being allowed the freedom to work in their own way. This for me is really important – whilst the networked element might start out small (perhaps only a small percentage of the headcount), the commitment needs to flex and flow between that and the hierarchy as organisational needs change. My own version of the networked system is small, multidisciplinary teams focused on solving a particular business challenge. As the requirements of the company shifts, the initial teams might be joined by more small teams, each tackling a different problem. Over time, the proportion of headcount that is working in this way might grow, but the cycling of staff through the network can enable the spread of new ways of working and thinking. A focus on maintaining a close connection between the two systems but also the freedom to operate differently ensures suitable governance whilst preventing a drift back to hierarchically-driven priorities.