Agile Boards – A necessity? An illusion? Or an achievable state?

Now, here, you see, it takes all the running YOU can do, to keep in the same place. If you want to get somewhere else, you must run at least twice as fast as that!” “I'd rather not try, please!” said Alice. [Lewis Carroll]

The opening quote is known as the Red Queen theory; and is often used to explain evolution through natural selection. It may just as well describe the survival challenge facing boards –under suspicion from stakeholders, under the hammer from regulators and under scrutiny from investors, under water with information, under the pump with workload, under time pressure, often under gunned with skills gaps in ‘new age’ technology expertise and diversity of thought and experience….

In response, we hear ‘agile’ bandied around so much – not just in juxtaposition to ‘waterfall’ project management but in terms of behaviour of leaders and managers. But how about when a board talks about being agile? And where a company decides to embrace agile, should the board do so too? Is this a desirable and achievable option? And how does it do so?

Interestingly, when looking up ‘agile boards’ on Google, almost all of the references relate to ‘Agile (scrum) boards’ on Jira.

I was talking earlier this week to a group of high profile, seasoned New Zealand directors about this very topic.

Firstly, the imperative…

The going-in assertion is that boards will need to work in more agile and organic ways – specially to come to grips with fast-moving changes and the VUCA nature of things. Planned, sequential ‘waterfall’ approaches to board paper preparation, meetings, discussions and initiatives will lose ground to agile. Fast iterating of options and controlled experimentation will be required- not at all times, but increasingly often. Directors will need to have more frequent, unchoreographed, real-time interactions with management and key stakeholders (think agile meetings); and will be constantly plugged into performance and ‘AWAC’ systems – think dynamic, not static.

Net net: In a VUCA world with emergence and unpredictability, a more programmed and regimented approach (“waterfall”, by another name) seems ill-suited to dealing with a different pace and tempo.

Having made the case that a different response and “posture” is needed, what can boards draw from Agile theory and practice? A quick review of the four core values of Agile, gives food for thought (there are also 12 guiding principles):

?1.?????Individuals and interactions over processes and tools

2.?????Working software over comprehensive documentation

3.?????Customer collaboration over contract negotiation

4.?????Responding to change over following a plan.

?How might a board apply each of these four attributes and what does this mean for necessary changes in their ways of working?

1.?????Individuals and interactions over processes and tools: A frequent lament from directors is how to create time for meaningful conversations and interactions. How does one carve out more time for sense-making and strategic thinking? Through sequestered time for strategy at the start of each agenda (not crammed at the end)? Sure, that could work, but that takes time and good chairmanship not to sacrifice other critical aspects of the agenda. More board offsites? Definitely, as long as directors can make the time and the strategy process itself is open for exploration and fluidity.

Besides that, what if, in the spirit of agile, we agreed to going off-piste and explore topics, rather than following the standard agenda rigidly? Or about each director coming to the board meeting with a fresh or provocative perspective on a key strategic assumption about the business and its context?

What needs to change behaviourally for this to work? Think about some the successful experimentation and lessons’ learned from Covid. Look at how many board meetings became far more fluid; with regular check ins; agenda-less or ‘loosely agenda’ed’; fewer pre-prepared board packs, etc. But there was still an unstated focus on the urgent and the important. Think about the effectiveness and benefits of those meetings. These were/are akin to the daily stand-ups of the Agile world.

One of the NZ directors present commented: ‘During Covid, behaviour change happened – but has it been sustained?’ and asked ‘How do we retain the best qualities of that time of heightened energy and hyper awareness?”. So, what is stopping us (you) from doing that again; or are we already reverting to the status quo ante?

At first, relaxing processes and formalities may sound like heresy to those who are procedural beasts, but let’s consider what embracing this first value may require: it means a board has to be explicitly (not tacitly) willing to be more organic, less procedural. It means management must be actively encouraged and relaxed about going with the flow of the meeting; not being as scripted. This could be a challenge for some teams but with good chairmanship they will still “get the business done”.

This should not mean that boards become process free zones, all organic and unstructured; but a healthy balance in the right places, on the right topics and at the right times, will aid agility.

?2.?????Working software over comprehensive documentation means that the board needs to signal clearly to the executive that they won’t be judged adversely if they come to them with more frequent iterations (‘early socialisation matters’) of working drafts, concept papers etc. In fact some of the NZ directors commented that boards feel blindsided with overly perfectionistic presentations, expecting them to make a decision then and there.

The core agile principle of iterative development – fast iterating of options and controlled experimentation of minimal viable products – could also allow boards and management to agree to trial options, not over-commit too early to new investments and products.

What needs to change behaviourally for this to work? For many companies, culture needs to change significantly to accommodate a more iterative approach.

It also requires different ways of engaging in the boardroom. For example, management and boards need to get comfortable with concept papers, evolving thinking and specifications, and informal board feedback. This means adopting a mindset that ‘perfection is the enemy of the good’, and telling CEOs that they won’t be judged for sharing formative thinking and early working drafts of key concept papers.

Maybe the executive team works on major new initiatives as sprints. Review points by the board (key go/ no-go / recycle) decisions would need to match that. So the cadence of board meetings would change to fit management decision- and activity -cycles, not vice versa. That’s a big shift.

?3.?????Customer collaboration over contract negotiation: substituting ‘customers’ for stakeholders in this third value statement, implies far more board and executive collaboration; having shorter feedback loops; having board engagement with key stakeholders (staff, customers, suppliers etc.) that is not choregraphed and curated by the executive. Controlling or defensive CEOs are a real impediment to this; as well as board members who aren’t prepared to put in the discretionary effort and go “walkabout” or “talkabout'.

Data analytical tools and technology that supports ‘virtual deep listening’ is already available to help make this activity more ‘agile’ and to support sentiment analysis.

This also means thinking deliberately about what work can be delegated to advisory boards, working groups, how to rope in ideas/support from other ecosystem partners to help have more ‘networked’ or dispersed governance?

What needs to change behaviourally for this to work? Firstly, chairs agreeing with CEOs that boards will ‘drop in’ on customers, staff, suppliers (with a polite forewarning), sometimes chaperoned but not orchestrated. It means not sticking formally to the ‘contract’ i.e. the board charter, the DOA’s, to respective sides of a hard 'executive : board' boundary line, at all times etc. Yes, boards do need to recognise and acknowledge when they are straying; but management should also not feel shy or protective for asking for more “sleeves rolled up” assistance at times.

?4.?????Responding to change over following a plan is a really critical one for an emergent, VUCA world etc. As a corporate strategist I'm not advocating for no planning (remembering that plans are sometimes useless but planning is invaluable), nor should we be accepting of anarchy; but far greater fluidity is good...on certain topics. So how do we agree to tight-tight-lose approaches and agendas? This also reflects the agile principle of “Simplicity – the art of maximizing the amount of work not done – is essential.”

What does this mean behaviourally? We need encourage/support/train executives to simplify board papers. As boards we need to insist on ‘decomplexifying’ key decisions about what needs to be decided and done, focusing on the critical things that really matter. These are learnt skills. Have we had a recent dialogue with the C-suite how ‘less is more’; how upcoming executives can be trained in the art and science of board paper preparation?

It also includes the agile principle of “Welcome changing requirements, even late in development. Agile processes harness change for the customer’s competitive advantage.”

How important is it for boards to keep relatively open positions and mindsets as they evaluate strategic options, major investments and transactions? Late-breaking developments need to be evaluated and embraced – and the ‘but we agreed’ defence needs to be overridden and the sunk-cost (loss aversion) bias guarded against when, at the 11th hour, critical things change. That is the embodiment of agile: being able to reverse a position or decision you've held for a long time, as new information emerges.

?What are your thoughts?

Are agile boards desirable? Feasible? If so, why? When (in what circumstances)? And what needs to change?

Who can share a great example of an agile board and effective techniques being used?