Agile-Organizations

How To Make The Whole Organization Agile

http://www.forbes.com/sites/stevedenning/2015/07/22/how-to-make-the-whole-organization-agile/Surveys show that most Agile teams report tension between the way the teams operate and the way the rest of the organization is run. Is it possible to make the whole organization Agile?

In Agile, the role of the manager is to enable those doing the work to contribute their full talents and capabilities to generate value for customers and eliminate any impediments that may be getting in the way. The manager trusts in the judgment and wisdom of those in touch with customers as to what work needs to be done . The manager also trusts in the talents and capacities of those doing the work to figure out how to do the work in the right way. Agile is neither top-down nor bottom-up: it is outside-in. The focus is on delivering value to customers. The customer is the boss, not the manager.

The role of the manager in traditional management is the opposite. The managerial function is to identify what needs to be done, to tell the employee what to do, and then to ensure the employee completes the work according to instructions. The role of the employee is to follow the directions as given, trusting the judgment and wisdom of the manager to ensure that the right work is being done in the right way. The primary goal is to make money for the firm. The manager is the boss.

In organizations where there is a fundamental belief in the effectiveness of the top-down “the manager is the boss” approach, it’s difficult to implement Agile effectively. There is continuing friction between the different goals and approaches. As a result, when adoption of Agile is limited to the team level, it risks being incomplete and dysfunctional, producing little if any improvement for the organization.

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Why Partial Fixes Don’t Stick

A partial fix to deal with the tension between Agile and management can be to redefine the role of the immediate supervisor of the Agile team in a way that is more consistent with Agile. A new job description can be developed for the supervising manager that is consistent with the enabling ideology of Agile. With luck, this job description may even be formally approved by his or her manager.

A partial fix to deal with the tension between Agile and management can be to redefine the role of the immediate supervisor of the Agile team in a way that is more consistent with Agile. A new job description can be developed for the supervising manager that is consistent with the enabling ideology of Agile. With luck, this job description may even be formally approved by his or her manager.

Yet this approach offers only a partial and temporary solution, for several reasons.

First, how robust will this formal approval be in a big organization where there may be three or more layers above the manager’s manager? In other words, the friction between the Agile team and the hierarchy has simply been moved one layer up the hierarchy. It is unlikely to stick if all the layers above haven’t also bought into the new goal and approach.

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Why Don’t The Upper Layers Like Agile?

Is it feasible to get the upper layers of a large organization to buy into Agile and the new role of managers without reaching agreement on the goal of the organization? Experience suggests not.

One reason for the adherence to top-down command-and-control approaches to management is that the goal of making money for the shareholders and the top executives is inherently uninspiring to those doing the work. Making money for the boss doesn’t put a spring in their step as they come to work.

So the top management has no choice but to use command-and-control in order to get a tight focus on producing strong quarterly profits and a rising stock price. The result is an unholy alliance between shareholder value and hierarchical bureaucracy. The alliance makes for an environment that is hostile to Agile and dispiriting for staff. In effect, the C-suite must compel employees to obey. The consequence is that, economy-wide, only one in five employees is fully engaged in his or her work, and even fewer are passionate.

A Better Way: The Creative Economy

Some organizations, like Apple, Google and Zara, do things differently. These firms constitute what has been called the Creative Economy. They have shifted the goal of the entire organization from maximizing shareholder value to delighting the customer. These are organizations in which all the management layers adopt the philosophy of “customer-value first.” They are Agile-friendly environments. In such firms, management practices at the team level like Agile become self-evident. Making money becomes the result, not the goal of the organization. Paradoxically, as the examples of Apple and Google show, this approach can be hugely profitable.

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Making the transition to Agile includes five major shifts:

  • Instead of a goal of making money for the organization, the goal of the organization is to delight the customer.
  • Instead of those doing the work reporting as individuals to bosses, the work is done in self-organizing team: the role of management is not to check whether those doing the work have done what they were meant to do, but rather to enable those doing the work to contribute all that they can and remove any impediment that might be getting in the way.
  • Instead of work being coordinated by bureaucracy with rules, plans and reports, work is coordinated by Agile methods with iterative work cycles and direct feedback from customers or their proxy.
  • Instead of a preoccupation with efficiency and predictability, the predominant values are transparency and continuous improvement.
  • Instead of one-way top-down commands, communications tend to be in horizontal conversations.

The principles are not a random collection of improvements. Together they also form a mutually reinforcing sequence.
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