Agile mindset

The mindset issue with agile

Have you ever wondered why so many agile transformation initiatives fall short of expectations? You may have experienced related discussions about lack of management-in, top-down or bottom up transformation strategies and, of course, the famous discussions about mindset issues.

It takes a mindset shift to change things in general, but what kind of mindset change is really required for a successful agile transformation? What is the specific management buy-in required for agile transformations? Is mindset-change the goal or is there something else that needs to change? 

The goal is business agility

I suspect there would be few people in an organisation who would be against the idea of becoming more agile. From Fortune 500 giants to startups, organisations recognise the need to be able to react fast to market changes and deliver value to customers. In particular, they wish to benefit from the continuous adaptation of existing business models or the creation of new ones. What agility means for them is usually not explicitly defined, but implicitly 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. 

Personally, I can imagine there is no one in an organisation who would not favour this situation. But why is there so much resistance to agile transformation when the benefits are so clear? Are workers who are often forced to apply agile methodologies just stuck in old ways of thinking and old habits that do not allow them to see the new possibilities? I tend to believe that this is NOT the case as we are talking about intelligent knowledge workers who are experienced in life-long learning. So where is the mindset issue?  

A mind shift towards strategical agility

Learning is necessary to adapt and must take place at both strategical and operational level. The speed of delivery at the 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 that an opportunity will stay in the market for a very long time. Unfortunately, this is not the case and senior management must 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 needs 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 below, 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) to most senior management, not because they cannot cope with change, but mainly because the mindset outside the companies (e.g. shareholders) includes the illusion of control and safety based on a a long term (e.g. 5-10 years) strategy. This is indeed a big conflict that companies face and usually the responsibility of senior management to manage these external and internal expectations and move towards strategical agility.  This is where management needs support, not to understand the need for change. To gain the support of your shareholders, you need to explain that stability comes from the ability to manage change and adapt your strategy, not from a quasi-static long term strategy. To repeat myself, the first point in your strategy should be to increase the ability to adap 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 traders use these losses as learning experiences to understand the current state of the markets and aim for a few big wins so that they can consistently make a profit overall. The strategy of many small losses adjustment, aiming for a few big wins that will outperform the losses in the long run, is created just before the trading day based on data, but remains adaptable throughout the whole day. During the trading day, the trader has to react to fast changes in the markets. This is a very extreme example of an adaptive strategy and the secret to being able to execute it while adapting is the speed at which the trader receives and processes data and feedback. The fastest they can access to financial data and other information, the better they can adjust their strategy.

If you think of 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 very quickly. The pace at which information is updated depends on the demands 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 the resulting reporting and coordination activities slow down the flow of information and inhibit fast learning. As a consequence the degree of adaptability is also reduced. 

Since information flow is important, 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 the operational level does not address the issue of organisational agility. This “type” of agility allows information to flow and learning to take place throughout the organisation. As a result, transformation should also focus on significant structural change and be less about changing the mindset of the workers or middle management.  

So why does change fail so often?

The main goal of a strong hierarchical  organisation is to protect the status quo. Why is that? Because it is human to protect what you have spent years building. Status, power, headcount. It is also natural for such organisations to protect their structure. I am not here to criticise. On the contrary, I want to empathise with the people in an organisation who have worked hard within that system to achieve some degree of success as 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.

Many transformations are called mindset transformations and focus on discussions and initiatives to change people’s mindset. This situation creates a blaming culture (because very little changes) and makes us forget that management is responsible for the development of the organisation. Most of the time 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 basically still representing the status quo. These initiatives only serve to make problems more transparent and lead to more frustration in applying agile methodologies. “Agile does not work for us” is often the end result.

Few people have the ability and power to initiate structural changes in an organisation. But, 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 need the support of others in the organisation. But I think it is naive and maybe a paradox to look for people who 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 applied consistently, I find it extremely difficult to drive change in conditions where people could effectively fight for their position.  

However, there is an alternative that some companies choose: The creation of a new organisation parallel to the old one, focused on a specific value stream of the company. This new organisation is designed to function with less hierarchical structures. It can follow agile principles, which can thrive due in new structures that allow direct collaboration and minimise political conflicts across silos. I will not go into detail in this article on 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 by the new level of empowerment. They need support to get used to work in this new culture and please remember that in my experience it is not a question of changing a mindset, but of showing people different ways of working together so that they can find their maximum contribution.
  • 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, we should not forget the importance of fast delivery/feedback from users and customers and the need for technical preparation.

In Conclusion

There is no blueprint for agile transformation. However, it seems that if we want to succeed, we need to focus less on changing the mindset of the workforce. If you feel that your transformation has reached a dead-end, consider supporting senior management to learn to work adaptively at a  strategical level, explaining why and how to enable the fast flow of information from customers to product development teams.

Don’t let mindset challenges hold you back. Contact me today to learn how we can support your efforts.

Photo by kylie De Guia on Unsplash