It is a fact that several agile transformation initiatives (if not the majority) do not succeed. Maybe you have experienced related discussions about missing buy-in from management, top-down or bottom up transformation strategies and of course the famous discussions about mindset issues.
There is indeed mind shift required to generally change things, but what kind of mindset change is really necessary for a successful agile transformation? What is the specific buy-in agile transformations needs from management? Is mindset-change the goal or is there something else that has to change?
The goal is business agility
I suggest that there would be hardly anybody in an organisation that would oppose to the idea of becoming more agile. Large companies recognise clearly the need to be able to react fast to market changes. Specifically they would like to profit by continuous adaptation of existing business models or creation of new ones. It is usually not explicitly defined what agility means for them, but implicitly defined through expectations about the delivery speed of value to the customer.
Let us interpret the definition of delivery speed in 2 dimensions as the fast flow of the feedback from the customer as well as the fast delivery of new potentially profitable ideas to the customer.
I can personally imagine that there is no-one in an organisation that would not favour this situation. But what is causing so much resistance in agile transformations if the benefit is so clear? Are workers that are often imposed to apply agile methodologies just stuck in old mindset and old habits that do not allow them to see the new possibilities? I tend to believe that this is NOT the case since we are talking about intelligent knowledge workers the are experienced in life-long learning. So where is the mindset issue?
A mind shift towards strategical agility
Learning is necessary in order to adapt and has to happen at strategical and also operational level. The speed of delivery at operational level is not enough if you cannot incorporate the feedback back into a flexible strategy. A traditional long term strategy is not designed to change every now and then. It assumes an opportunity stays in the market for very long. This is unfortunately not the case and senior management needs to learn to cope with a constantly adapting strategy that allows you to enter the game, have a clear exit strategy, manage your risk, earn money, learn and adapt.
This is a mindset change that has to happen at the strategical level of the organisation: Strategical agility goes hand in hand with operational agility (speed of delivery) and as we will see in the following also with organisational agility (the ability to process information and learn in the organisation).
Changing the strategy every now and then sounds very scary (otherwise it would not be a real mind shift) for most of the senior management not because they cannot cope with change, but especially because the way of thinking also outside of the companies (shareholders as an example) includes the illusion of control and safety based on a a long term (e.g. 5-10 years) strategy. This is indeed a very large conflict companies are facing and usually it is the responsibility of the senior management to manage those external and internal expectations and move towards strategical agility. That is where the management needs support and not to understand the necessity of change. In order to gain support from your shareholders it is needed to explain that stability comes from the ability to manage change and adapt your strategy and not from a quasi static long term strategy. To repeat myself and put it differently, the first point in your strategy should be to increase the ability of adapting your strategy.
Fast flow of information enables learning, thus adaptivity
Let us try to learn from the analogy of day traders in the financial markets. They aim for profit but can handle a lot of small losses. Successful day trader use these loses as learning experiences to understand at some extend the current state of the markets and aim for a few big wins so that they consistently make profit overall. The strategy of many small losses, constant adaptation aiming for a few big wins that outperform the losses in the long run is created just before the trading day based on data but remains adaptable during the whole day. During the trading day the trader has to react to the fast changes in the markets. This is a very extreme example of an adaptive strategy and the secret for being able to execute it while adapting it, is the speed of information with which the trader receives and processes data and feedback. The fastest the financial data and other information is consumed the better they can adjust their strategy.
If you just consider your company as someone who has to adapt very fast to changing conditions then it is clear that information has to flow fast and decisions have to be taken also very fast. The pace of information update depends on the demand of your market.
A mind shift towards structural changes
How to make information flow fast?
As Peter Senge points out, boundaries limit the flow of information. In other words silos, hierarchies and resulting reporting and coordination activities slow down the flow of information and inhibit fast learning. As a consequence the degree of adaptiveness is also reduced.
Since the flow of information is important then one of the goals of a transformation is to break down silos, stop unnecessary reporting and eliminate coordination overhead. Less handovers, coordination and roles. Introducing agile methodologies, frameworks and scaling mechanisms at operational level is not addressing the topic of organisational agility. This “type” of agility allows information to flow and learning to happen company wide. As a consequence of this a transformation should be focusing also on significant structural change and have less to do with a change in the mindset of the workers or of the middle management.
So why does change fail so often?
The major goal of a strong hierarchical organisation is to protect status quo. Why is that? Because it is human to protect what it took you years to build up. Status, power, headcount. It is also natural in such organisations to protect their structure. I do not want to criticise at this point. On the contrary I would like to empathise with the people in an organisation that worked hard in this system to reach some degree of success as it was defined by the system.
Larman’s Law: Organizations are implicitly optimized to avoid changing the status quo middle- and first-level manager and “specialist” positions & power structures.
A lot of transformations are baptised as mindset transformations and focus on discussions and initiatives to change the mindset of people. This situation creates a blaming culture (because hardly anything changes) and makes us forget the responsibility the management has for the organisational development. Most of the times there is hardly any change in structures and I am sure that you have seen initiatives re-painting old roles, giving them new names, but are basically still representing the status quo. These initiatives just manage to let the problems become more and more transparent and lead to more frustration about applying agile methodologies. “Agile does not work for us” is often the end result.
Only few are in the position and have power to initiate structural changes in a company. Nevertheless is it possible that they can only drive significant change?
A possibility for change
I do not know if any of us can expect from a few senior managers to initiate a Big-Bang and quasi eliminate unnecessary hierarchies and power positions. They would be needing support from others within the organisation. I think though that it is naive and maybe a paradox to look for people that would consciously agree to give up their position and step aside when it comes to necessary structural changes. In such times leadership is challenged to create an environment of safety. But even if job safety versus role safety is propagated and lived consistently, I consider it extremely difficult to drive change under the conditions where people could practically fight for their position.
There is though an alternative that some companies choose: The creation of a new organisation parallel to the old one that focuses on a specific value stream of the company. This new organisation is designed to function with less hierarchical structures. It can follow the agile principles which can thrive due to the new structures that allow direct collaboration and minimise political conflicts across silos. I will not elaborate in detail in this article how to setup such an organisation but some things you need to consider are
- the size of the new organisation and its growth rate,
- the current ability of people to work with a larger degree of autonomy. Flat hierarchies create a different cultural environment and people are often overwhelmed from the new degree of empowerment. They need support to get used to work in this new culture and please keep in mind that according to my experience there is no need to change any mindset, but to show the people different ways of collaborating with each other so that they can find their maximum contribution themselves.
- As a consequence, coaching support is required at team level (also coaches as team member) as well as at management level to adapt to these new conditions (traditional versus servant leadership, less management and more)
- Last but not least let us not forget the importance of fast delivery/feedback from users and customers and the need for preparation also on technical level.
There is no blueprint for an agile transformation. It seems though that if we want to succeed we have to deal less with changing the mindset of the workers. When you feel that your transformation has reached a dead-end think about supporting the senior management to learn to work adaptively on strategical level and explain why and how to enable fast flow of information from customers to product development teams.