Would you work agile and (nevertheless) perform strategic planning?! An expert interview

Most of my blog posts emerge from my reflections, experiences, and insights on noteworthy topics, which I then pass on to others. Today I invited my colleague, Lukas Michel, to share his experiences and findings directly with you, simply because I believe that he has very valuable insights to talk about.

Lukas and I have been working together for years and frequently exchanged new ideas. He brings in aspects from a different angle and, together with my insights, we often get to better-founded insights or new perspectives. 

With THE PERFORMANCE TRIANGLE and his book on MANAGEMENT DESIGN, Lukas has developed and introduced a reflection tool on organisational agility years ago, which many, especially some large consultancies, are still working on today. At this point, it is good to know that they cannot replicate his extensive experience quickly enough. He is also one of my mentors, and I consider myself extremely happy to work with him (and the other members of the AGILITYINSIGHTS network that he has nurtured up over the years). 

The Interview

Lukas, you have been working on agile topics at a time when literally no one could even associate with the term. Today it is a hype. You have more experience and expertise than most others in this field. What does the term mean to you and where do you see the greatest benefit for companies?

Thank you, Guido. For 16 years, agility has been the dominant theme of my activities. To be successful in a rapidly changing environment, agile entrepreneurial actions and behaviours are required. Our aim was always to help companies become more agile, fast and resilient. As such, these organisations built up dynamic capabilities. Dynamic capabilities enable anticipation, adaptation, and the development of change capabilities without the disruptive elements of traditional change processes. Our research confirms that organizations with these three dynamic capabilities are better off in dealing with VUCA (V=Volatility, U=Insecurity, C=Complexity, A=Ambiguity). As a result, these organisations are able to fully engage the talents of their employees for superior performance, innovation, and growth. In modern organizations, I see the right design of dynamic capabilities as the real key to sustainable superior results. 

A few weeks ago, we talked about the relationship between strategic planning and agility or the added value of agile design checks. What do you think has changed?

In a dynamic environment with rapid changes, recurring annually strategy exercises and budget rounds are no more adequate. In such contexts, performance targets are obsolete the moment they have been agreed upon. Rising bureaucracy around target setting is the result. The costs for companies with disruptive managerial practices are enormous and their ability to enhance control is negligible. Planning as an annual event is a relic of bygone times. 

Traditional strategic planning and budgeting focuses on what you can see and what you can count. But, the factors that are relevant for value creation are invisible and difficult to measure. For example, I am thinking of the quality of leadership, culture, management systems, cooperation, purpose, and relationships. It is the invisible "parts of the iceberg" that need the attention of strategy and planning. 

And, in modern companies, knowledge sits with employees. They know what is going on. Leadership teams see only about 15% of the action and behaviours in organizations. With distributed knowledge, traditional top-down planning definitely is outdated. 

Moreover, in today’s dynamic market environment, there is a great need for control and monitoring, and thus for security. As in the past, management teams will not perform without adequate control. To enhance control, I recommend non-routine, institutionalized and systematic reflection. This helps executives and employees to raise the awareness for the things that require their attention and further development. Our Agile Design Check is the practical application of such a reflection tool.

In the past, strategic planning initiatives provided valuable information for the development of the company and served the allocation of resources such as employees and budgets to be aligned accordingly. What particular advantages do you see in linking this type of reflection with strategic planning initiatives?

Firstly, strategy and planning must be freed from a rigid time schedule. I recommend unscheduled thinking whenever changes require it. In a dynamic context, strategy and planning become the daily work of executives and employees. 

Secondly, with the appropriate institutional framework, strategy and planning become the responsibility of all those who care about and can contribute to the future of the company.  

Thirdly, it must be acknowledged that managers do not always have the full or right answers. Systematic reflection helps to see the entire iceberg by including the knowledge of all. 

The Agile Design Check combines Chris Argyris' "Double-loop Learning" with Nick Luhmann's and Stafford Beer's "Second Order Observation Systems" for monitoring dynamic skills. Observation creates awareness and awareness leads to meaningful decisions and actions.

How would you proceed today in the context of a strategic planning in order to create this awareness ideally? Where do you see the differences to the past?

For me today, planning and strategy are equally important as in the past. But in the past, it was an annual event for managers. Today, it is part of modern corporate management and communication. Traditional SWOT analyses give way to collaborative monitoring. 

For example, I recommend carrying out an assessment of the invisible dynamic capabilities at irregular intervals. Today, this can be done quickly and easily with standardized diagnostic instruments such as the Agile Design Check. Being clear about the immaterial capabilities of an organization thus becomes the starting point for strategy and planning work. 

Modern strategy and planning instruments promote exchange and dialogue. More people see more. And, people that are involved take charge and are responsible. This is exactly what we actively promote with the Design Checks. We involve managers and employees in the diagnosis with the Design Check, and we help them in a one-day workshop to translate their findings into actionable initiatives. Modern moderation techniques align participants with solutions, leave the responsibility with them, and integrate diverge ideas into a coherent stream of activities. 

From your point of view, what are the advantages of an Agile Design Check? What perspectives does it open up? Which stains may remain blind and why?

If 90% of the knowledge lies with employees and the majority of the skills are invisible, then my goal as a manager must be to release this knowledge and drain the iceberg, or in other words, to focus on the aspects that are relevant for value creation. Such diagnostic strategizing and planning make organisational standards, patterns, profiles, and maturity levels transparent and ‘manageable’. You can only design what you see. Thus, the Agile Design Check becomes the strategy, planning and design tool for dynamic capabilities. 

To what extent should employees be involved here, or is it sufficient to involve managers in the reflection in order to obtain valid statements?

All companies strive to “only hire the best employees". In this sense, it is important to sensibly involve these employees in planning and strategy. With the Agile Design Check, this is very easy. By answering the questions of our online diagnostic tool, reflection starts, and awareness builds up. This means, all participants contribute with their knowledge to the strategy and planning workshops. Involving employees offers access to more knowledge and the possibility for managers to exert direct influence. This enhances clarity and increases control to the extent way beyond what traditional managerial processes ever were able to deliver. 

The Agile Design Check offers more certainty and better predictability for delicate decisions. It is the foundation for a better way to deal with an uncertain, volatile, and complex market environment. 

Dear Lukas, many thanks for sharing your profound experiences. 

Lukas Michel is CEO and founder of AGILITYINSIGHTS.NET - a community of experienced consultants to executives in the areas of organization, management, and agility. His books, THE PERFORMANCE TRIANGLE, and MANAGEMENT DESIGN have pioneered the agile design of management and organization. He is a lecturer for agile leadership at universities and advises companies worldwide on issues of corporate management in a dynamic market context.

05 September 2018 - ZUKUNFTheute - erfolgreicher.zusammen.wirken

Guido Bosbach is the founder and CEO of ZUKUNFTheute, consultant & mentor for top management. He's a leading expert in designing and implementing successful collaboration patterns and contemporary management design.

He has recently been listed amongst the 3 TOP HR-Influencer in Germany by "personalmagazin" and was named one of the 25 LinkedIn Top Voices 2017 D-A-CH in Dec 2017.

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