The Agility Paradox

Most companies start agile transformation for all the wrong reason – without cultural conditions and pre-requisites in place. No agile frameworks are designed to set these conditions and pre-requisites right. In the end, this explains why a large majority agile transformation fail and jeopardize future relevance. Here are my thoughts about the Agility Paradox.

During the last 15 years, I have been studying and working with Agile Transformations in business and organizations. It has been a journey of different frameworks, principles, routines, and roles with a common denominator in supporting business agility – but also an ongoing deviation from the original agile manifesto developed in 2001. The initial purpose of the “agile revolution” was to address the unpredictable business environment (driven by increased digitalization, globalization, and urbanization) and deliver faster value to customers. Rapid technical evolution, new customer behavior and fierce competition from new digital companies are daily challenges for business leaders today. The rate of change has never been this high in history. Only the company able to absorb the unpredictability, speed and variety were likely to survive. An agile transformation is today necessary for most companies and organization to remain relevant and successful for the future. 91% of organizations state that it is a strategic priority to adopt agile principles (source KPMG).?

At the same time, research shows that 84% of all agile implementation have severe challenges (source: Flow Leadership) – difficulties to get the agile methodology to work in practice and deliver business value. Key research companies (such as Institute for Digital Transformation) conclude that agile transformation is in “decline” phase where the importance and interest of agile is decreasing generally. The key challenges of implementing agile (source: Digital.ai ) relate to inconsistencies in process and practices, cultural clashes, general organizational resistance to change, lack of skills and experience, absence of leadership participation, and inadequate management support and sponsorship (driven by complexity and friction). These challenges describe a situation where organization, governance and leadership are neither prepared nor committed to the agile transformation. These statistics are surprising given the strategic importance of all companies and organizations to address the market unpredictability.?

“Corporate productivity growth in Western Europe is at its lowest level (zero or negative) since the early days of the industrial revolution.”

To understand the agile transformation challenges, we need to understand the background to why leadership teams decide to prioritize a new agile way of working. We see that corporate productivity growth in Western Europe is at its lowest level (zero or negative) since the early days of the industrial revolution. It means that companies and organizations require more and more resources to fulfill daily obligations and business goals – resulting is lower business margins and profits. Additionally, we know that complexity, organizational inertia, and bureaucracy increase by 6% annually due to the Parkinson Law. This means that most companies today have financial challenges and need some way to improve cost efficiency – productivity of the organization. This is the point where agile transformation is proposed – not to manage unpredictability (and remaining relevant in the market) but rather to address low productivity/cost efficiency. Nothing could be further from the truth – the agile transformation is NOT a productivity framework – it is an agile framework! So, when leaders sell the agile concept internally - it is to reduce cost (like other cost reduction initiatives) and not as an initiative to save the business.??How interesting and urgent is that?

Implementing an agile way of working is a long (many years) and difficult process where a new agile operating model need to be implemented. Research show that the agile transformation requires complete commitment from all employees and leaders and be part of the corporate culture and DNA. The emphasis is truly on the word “transformation” rather than the word “agile”. What we need to understand is that implementing a new agile operating model will during some time increase complexity and friction – lowering productivity significantly. Only those able to address complexity, change inertia and friction simultaneously will have a chance of keeping productivity at a reasonable level. But for most companies, productivity will fall creating a scare and worry on the business side. This is not what they signed up for! They were promised cost efficiency and productivity gains! An agile resistance emerges with more command and control to force increased cost efficiency. In the long run, the business managers will win, and the agile transformation is cancelled. It is the same story repeatedly!

What can we learn from agile implementation and why some companies are more successful that others??

1. Always start with?why!?What is the business rationale behind implementing agile? What are you trying to achieve? What is your future vision? Are you ready for few years of reduced productivity and cost efficiency to achieve this goal? If not – do not go into agile!
2. The organization need to be geared for transformation!?In most cases we experience high level of complexity and friction (up to 75%) in the organization that will challenge the organization’s ability to change. It is an organizational inertia that will stagnate the change and productivity – and place doubts in every manager’s head whether this was the right decision or not. Successful companies address complexity and friction BEFORE the agile transformation to improve probability of success (by over 50%). They understand that agile transformation is change in mindset and culture – and start in that end. It all starts with business excellence!

• Full commitment – no excuses!?An agile transformation can never be limited to the IT organization or a few roles (such as Scrum-masters and agile coaches). Agile transformation requires full commitment from all employees and leaders from strategic to operative level. Too often I see a glass ceiling where leaders and business managers are excluded from the agile transformation – because it is not their responsibility. Nothing could be further from the truth!!

What I find interesting about these three learnings is that none of these are addressed by the agile frameworks (such as SAFe) and agile coaches. It is assumed that these pre-requisites are in place to begin with, and no agile coaches or scrum masters (running the show) can influence the situation Let’s face it, if senior managers are doing SAFe as a cost efficiency project without commitment – not agile coach, product owner or RTE can ever change that. For me, this is the main reason why 84% of all agile transformations have severe challenge (and will fail). The right conditions and pre-requisites for the agile transformation are not fulfilled in the first place.?

Let us summarize the learnings is one theorem that all managers and leaders need to understand – for a successful agile transformation. If managers and leaders do not understand (and commit to) this theorem it is recommended not to go agile (regardless of framework and tools).?

The Agile Paradox:?Companies implementing agile way of working (for example SAFe) by the book - without right cultural conditions and pre-requisites in place - will risk becoming less agile and relevant in the future.

?Agile Transformation is still a strategic priority for many companies and organizations today. But what we need to understand is how it will help our company – and what scarifies are we willing to make to implement agile way of working? Agile Transformation (for example implementing SAFe) is not a “silver bullet” that will solve all corporate performance challenges but rather an idea that need to be massaged and designed for your specific purpose and context. Agile Transformation will never be easy and in most cases it will not work. But for some companies it will be successful, and they will remain relevant, profitable, and competitive in the future. The difference is between believing and trusting in what others say or finding out for yourself why some are successful. It is the difference between success and failure – between being a rock star and a failure!

Hans Gillior

Agile Transformation Coach / Business Excellence Expert

[email protected]