Key Takeaways
- Agile management reflects fundamentally different goals, values, principles and methods from traditional 20th Century management.
- Agile management involves a different mindset, not just different processes or methodologies.
- Firms need to go beyond Operational Agility and embrace Strategic Agility, i.e. generating market-creating innovations that generate new customers and greater financial returns.
- Implementing an Agile transformation in a large organization depends on creating an agile mindset that fosters a culture of trust and transparency throughout the whole organization.
- Agile management faces four strong “headwinds” that often kill Agile transformations.
The book The Age of Agile by Steve Denning defines the goals, values, principles, and techniques for Agile management together with stories about how large organizations are applying this to deliver value on a large scale.
InfoQ readers can download a sample of the Age of Agile.
InfoQ interviewed Denning about the common practices of agile teams, how having small Agile teams impact the way that the work and workers are managed and how networks operate effectively, what strategic Agility is and how organizations can benefit from it, why Agile transformations fail and what can be done to prevent this, how a strategy with Agile differs from a traditional strategy, and how organizations can adopt Agile management.
InfoQ: What made you decide to write this book?
Steve Denning: We have all learned a great deal about Agile management since the publication of my last book in 2010: The Leader’s Guide To Radical Management, which was mainly about Agile at the level of a team or a unit. I have written over 700 articles about Agile management for Forbes.com, particularly the challenge of making the whole organization Agile and the headwinds facing Agile transformations. My new book is a synthesis of these insights and experiences.
InfoQ: For whom is this book intended?
Denning: The primary audience comprises several million managers who are confronting the challenge of a marketplace with a faster pace of change and increasing complexity, those who want to understand more about the potential Agile management to meet those challenges, as well as those involved in Agile implementations.
InfoQ: What are the common practices of Agile small teams?
Denning: The book describes ten common practices of Agile small teams.
- Work is disaggregated into small batches:
- Small cross-functional teams.
- Limited work in process.
- Autonomous teams.
- Getting to “done” each cycle.
- Teams work without interruption.
- Daily standups.
- Radical transparency.
- Customer feedback each cycle.
- Retrospective reviews.
Working in small teams in short cycles with direct feedback from customers is the aspect of management that received most of the attention of the early Agile implementations. In a world that is volatile, uncertain, complex and ambiguous—the so-called VUCA world— big difficult problems need to be disaggregated into small batches and performed by small cross-functional autonomous teams, working iteratively in short cycles in a state of flow, with fast feedback from customers and end-users.
In essence, what these steps reflect is an intent to descale big complex problems into small manageable pieces, that groups of small teams can understand and resolve, rather than trying to scale up the organization to handle big complex problems.
Yet the practices of working in such small teams only have real benefit if they take place in an organization that is committed to adding value to customers as its principal goal, and that operates as a fluid network of teams, rather than a top-down hierarchy controlling separate units.
InfoQ: How does having small Agile teams impact the way that the work and workers are managed?
Denning: By itself, having small Agile teams has no impact. It’s more important to think about: how does having an Agile mindset affect the operation of teams and the way the work is managed? The Agile mindset, ideally shared by everyone in the organization, includes a preoccupation with creating more value for customers and descaling work into batches that can be handled by networks of small teams. A key role of first-line managers is to ensure that teams have a clear line of sight to the ultimate customer/end-user and to resolve any impediments to the creation of that value. At higher levels, a key role of managers includes ensuring that the whole organization has an agile mindset.
In effect, managers need to become leaders who embody the Agile mindset in their own conduct and who can inspire others to embrace it. This requires reliance on persuasion rather than systems and control processes.
InfoQ: How do large networks, consisting of people and teams, operate effectively?
Denning: Here are some of the more important keys:
One is to ensure that everyone in the organization embraces an Agile mindset.
Another is to ensure that everyone in the organization understands and embraces the primacy of adding value to customers.
Yet another is to create a culture of transparency and trust throughout the organization, with communications flowing freely both vertically and horizontally; anyone can talk to anyone.
For example, General Stanley McChrystal in the U.S. Army showed how disparate teams that were individually brilliant but collectively uncollaborative, were brought together in “a team of teams” through a series of measures, including establishing a common decision-making space, creating radical transparency, sharing staff across units and carefully nurturing a spirit of collaboration.
InfoQ: What's strategic Agility and how can organizations benefit from it?
Denning: Strategic Agility is about generating innovations that create entirely new markets and that turn non-customers into customers. Instead of being slightly better than everybody else in a crowded and established field, a firm practicing strategic Agility creates new markets and dominates them. The profit margins are bigger, and the value to society is often larger. Achieving strategic Agility involves mastering a playbook for systematically generating market-creating innovations and the necessary shift in culture that is required.
Agile management, particularly strategic Agility, reflects a different way of thinking, acting and interacting with the world, as compared to 20th Century command-and-control management, which was good at making the existing business more efficient but very poor at creating new businesses. The necessary change in culture is likely to be the work of years, as leaders like Curt Carlson at SRI International have shown, by hammering the change in every conversation every day.
InfoQ: Why do Agile transformations fail and what can be done to prevent this?
Denning: There are many reasons why Agile transformations fail, including lack of understanding of Agile, treating Agile as a process rather than a mindset, “doing Agile” rather than “being Agile,” failing to establish a culture of trust and openness, as well as working on products and services that yield insufficient financial returns. Preventing those problems flows from correctly understanding Agile, embracing Agile as a mindset, “being Agile”, establishing a culture of trust and openness, and ensuring the products and services being worked on have adequate financial returns.
The Age of Agile also identifies four traps that often kill agile transformations:
- The trap of focusing the firm on maximizing shareholder value as reflected in the current stock price;
- The trap of manipulating the firm’s share price through share buybacks;
- The trap of cost-oriented economics that focuses on short-term profits at the expense of customers and the sustainability of the corporation;
- The trap of backward-looking strategy that deduces the future from the past, rather than using abductive logic that derives the present from a different and more fruitful future.
The trap of maximizing shareholder value as reflected in the current stock price is particularly important because it is at odds with the fundamental goal of Agile management, namely, to maximize customer value. Hence, when a firm embraces shareholder value as its goal while also ostensibly implementing Agile management, it sets up an inevitable conflict in which only one goal can prevail. This conflict helps explains the many instances where Agile management has been embraced by a firm for some time with apparent success, only to have Agile practices abandoned when a conflict with short-term share price objectives emerges.
InfoQ: How does a strategy with Agile differ from a traditional strategy?
Denning: Traditional strategy as articulated by such experts as Professor Michael Porter, involved identifying a sustainable competitive advantage, to be deduced from the structure of the industry through the five-force framework: the threat of substitute products or services, the threat of established rivals, the threat of new entrants, the bargaining power of suppliers and the bargaining power of customers. In Agile management, strategy recognizes that most competitive advantages are temporary and focuses attention on the primacy of delivering increasing value to customers through continuous innovation, including the creation of new businesses that bring in new customers.
InfoQ: What’s your advice for organizations that want to adopt Agile management?
Denning: An Agile journey is a large-scale long-term undertaking. Here are a few pointers for a leader to keep in mind when getting started:
- Develop an in-depth understanding of what Agile is
- Assess your current context, its strengths and weaknesses
- Maintain an external focus, giving primacy to the customer
- Don’t get hung up on labels or what to call your transformation journey
- Recognize that an Agile transformation in a large organization takes years
- Make organizational change last.
- Use leadership storytelling to inspire passion for Agile management
- Recognize that an Agile transformation journey never ends: the firm never “arrives.”
About the Book Author
Steve Denning is the author of the new book, The Age of Agile (AMACOM, 2018). Denning is the former program director, Knowledge Management, at the World Bank. He now works with organizations in leadership, innovation, Agile management and organizational storytelling. Denning also is a board member of the SD Learning Consortium, a group of major private sector firms that are sharing knowledge about the Agile transformation journey.
