Leaders need to accept that business agility will be critical in the
Forget deep technical competencies for the moment. The new essential organisational capabilities – at least until the pandemic is over – are flexibility (to be able to switch direction), innovation (to meet fresh challenges in new ways), agility (to rapidly respond to changing requirements), and resilience (to sustain the organisation through difficult times).
Let’s focus on agility. Agility involves more than setting up a few teams and telling them to do things quickly. There are skills to develop and tools to prepare, of course, but agility is not about tools, techniques, and teams. Instead, it is about the leaders and managers of the organisation – that’s where agile initiatives succeed or fail.
However, the apparent success of agility in many organisations may be a negative thing: it looks easy and logical and is such an obvious choice that many executives miss its downsides.
Let’s look at the upsides first. The benefits of an agile approach are clear:
- Rapid response to changing customer requirements – better product quality
- Customer intimacy – high customer satisfaction
- High team morale – self-managed teams
- Increased collaboration – cross-functional teams
- Fit for purpose teams – focused on results, not outputs
- Performance visibility – short feedback and measurement cycles
- Reduced risk – Incremental successes and failures provide risk-reducing options
- Reduced investment – Incremental investment in what works
This list could prompt executives to rush to agile at scale, but there are downsides too:
- “Indefinite projects” where the outcome is, as yet, unknown – time and costs are also unpredictable
- Skill-dependent teams – agile requires a higher level of skills and decision-making from individuals
- Neglect of documentation – self-documenting processes must be implemented
- Financing in increments is not easy – most GAAP practices are based on annual cycles
Nevertheless, executives may suggest that the pros outweigh the cons, but the Project Management Institute (PMI) reports that 44% of projects are predictive (waterfall) in nature, and only 30% are agile, while the rest are hybrid. This suggests that there are many projects, indeed many functions, within an organisation that would not benefit from a purely agile approach.
Predictive projects (and functions) are appropriate where:
- There is a sequential workflow, and where a specific outcome is needed
- The expected results are predictable and well-defined
- Processes and results are highly regulated, such as in pharmaceuticals, engineering, and some manufacturing
- Customers play a limited role in the outcome
- Intensive documentation is needed
Most organisations have predictive and regulated operations, but there will be some functions and projects that can benefit from an agile approach – the trick is to separate them. Neither will the predictive/agile split be a clean one – there will be flavours of each in all departments.
Perhaps the approach to adopt is a “test and refine” route, as a way of analysing which functions could be moved to agile, and which should remain within the traditional sequential and linear command structure. The test and refine approach is an agile technique, and the first step is to adopt agile thinking in the leadership team.
A quick review:
- An agile team works closely with customers.
- The teams break large and complex problems into separate components.
- They devise solutions for each component by rapidly prototyping and testing and refining their solution with customers.
- The feedback from their customers is included in the next cycle, and eventually, the separate solutions are combined into a logical outcome.
When leaders adopt agile thinking, they regard various parts of the organisation as their customer. Organisations are more successful where their agile leadership team takes a hands-on and collaborative approach to organisational change. They consult with their internal customers, develop prototype solutions, test them, and solicit feedback – all in short cycles. They concentrate on removing constraints rather than delegating tasks. They focus on staff satisfaction and on results rather than controls and bureaucracy. Finally, they become agile advocates, rather than micro-managers.
A leadership team that has adopted agile thinking will be first to recognise that the final outcome cannot be predicted. They don’t know how many agile teams will result from their efforts, nor do they know which department will be fully agile, and which will adopt a hybrid approach. Neither will they know what bureaucratic and governance roadblocks will be thrown up or uncovered. But because this team has the power to make decisions and change things, their potential to implement agility successfully is much greater than ordinary agile teams.