FROM AGILE PROJECTS TO AGILE MANAGEMENT

Opening remarks

Traditional software engineering applying the waterfall method could not cope with changes, and in 2001 a small group of IT programmers set in the Agile Manifesto the 4 values and the 12 principles of Agile Projects. Since, many methods have introduced, there are reams of books on the subject, and there are good seminars. (1)

Agile Management follows the values and principles of the Agile Manifesto, and it is a brainchild of Agile Projects. (2) Some of the software-based companies, which had introduced Agile Projects to run their IT programming, started by extending the agile approach first to a part and then to all of their organization. Companies like Amazon, Google, Microsoft, and some banks are among the early implementors of Agile Management.

According to a recent executive survey by McKinsey, 4% of the respondents said they had already implemented an agile transformation, 37% are carrying out a company-wide agile transformation, and 80% of them indicated that, in the agile business-units, performances had increased considerably since the beginning of the transformation. Volatility, unpredictability, complexity, and ambiguity will not relent, and Agile Management is standing out the only way to sustain success in such a challenging business environment.

In this short-paper, I t explain the similarities and the differences between Agile Projects and Agile Management; it provides some clues on how the leadership should approach the introduction of Agile Management in order to boost the strategic and operational agility of the enterprise.

Agile Projects

Typically, a small group of IT programmers are given a task, which must fit in the outlined IT program as well as in the operating system of the company. Moreover, the task must be completed rapidly because the other programmers and the customers cannot wait, and it must be adaptive because there may be frequent changes, possibly big changes.

Of course, there are methods that facilitate Agile Projects such as Scrum, lean, and just-in-time. But, the Agile Manifesto, which serves as the backbone of Agile Projects, is not about processes, it is about peoples and product interactions. The Agile Manifesto is about it is about people, it is about attitudes, it is about behaviors. It is an approach to management that – for a change – does not come from academics or consultants - but from the practice of IT programmers. Let us summarize hereafter the key points that are applicable to Agile Projects as well as to Agile Management.

-1- The interactions of individuals and of teams - not practices and procedures - are what

     creates value in the business with and for the stakeholders. These interactions gestate

     commitment, collaboration, and collective creativity.

-2- Projects are managed by motivated individuals who should be trusted, empowered, and

    recognized for their contributions.

-3- Individuals and teams must constantly strive to satisfy the internal and external

    customers, reflect on how to become more effective, and welcome changes, even last-

    minute changes.

-4- The entrusted task must be completed rapidly and product delivered frequently because

     the internal and/or external customers cannot wait. Informatics and now management by

     and large are working at electronic speed.

-5- Agility requires that the objectives be broken down in small and relatively simple tasks

    that are entrusted to small teams that can manage them smartly and swiftly.

Of course, IT programmers are used to work together because they all hang on the same management-information system, they share the same lingo, their overall objectives can easily be broken down into small and simple tasks. Large, traditional organizations do not work that way. Thus, the introduction of Agile Management may require a fitting approach such as outlined hereafter.

Agile Management

We used to think “big is better”, now we realize that “small can be superior”. Many large corporations have tried to cut down the size of their business-units, but in fact corporations are getting more and more complex. BCG’s Index of complicatedness has been swelling by roughly 7% per year over the past 50 years. Often, the corporate complicatedness has become unbearable in a business environment that has become increasingly changeable and complex.

So, for many traditional organizations the question is not whether or not to introduce Agile Management, but how best to do it. Of course, there are many road-blocs on the way to innovating a traditional management and to create an agile innovative enterprise. An old saying suggests: “where there is a will there is a way”. A strong CEO and his/her executive committee can see the need to  boost the strategic and operational agility of their organization, and they can be determined to launch a program of agile management innovation. But, they are unlikely to ignore that the batting average for such programs is dismally low. So, let us turn around “where there is a will there is a way” and focus on “where there is a way, there is a will”. Let us look at some of the basics.

First of all, everybody inside and outside the organization must understand that a program of agile management innovation does not turn the whole organization upside-down, it is not a revolution. There will be some changes, but these changes will be beneficial to the people as well as to their organization. Hereafter, I will sketch the approach  that I advocate in my last book as part of a comprehensive, congenial, and connective method. (3)

First of all, while many of the change-management programs that look for quick improvements of their profitability and/or of their market-position focus on the external environment, the program of agile management innovation focuses on the internal environment. So, let me refer to the 5 <S> of my model of the <organizational capital>, namely: the <strategy fundamentals>, the <style of the leadership> or the corporate culture, the <systems of management>, the <structures of the organization>, the <shared critical capabilities>. Of course, the 5 <S> work closely together, but, for simplicity’s sake, hereafter I will take them one by one, and outline what has to be changed and how to do it.

-1- As mentioned earlier, Agile Management puts people in the driver’s seat ! The <style of the leadership> must change from putting <command-control-chastise> in the hands of a few to focusing the business leaders on <steering-sharing-supporting> the actions of the self-managed teams. The CEO and his/her executive committee must get buy in for going agile from a critical mass of people. They must lead seminars that show what needs to be changed and why, and they should lay out the whole implementation program. They must show how the program will be carried out by the live-forces of the organization with the help of facilitators. They must show how they will remain actively involved in the program, for example by participating in the committee that will monitor and facilitate progress as well as in some of the team-reviews.

-2- The <strategy fundamentals> need to get the doers and the planners working as appropriate on the development and on the deployment of the business-strategies so as to spread the understanding and the ownership of the strategies. Based on some of the principles of Hoshin Planning, I propose a participative process of strategic and organizational deployment.

Step by step, the business-strategies must be broken down to relatively small and simple tasks that can be entrusted to self-managed teams.

-3- Prof. emeritus Alfred Chandler submitted that strategy drives structures. Well, consonant with the principle of breaking down the business-strategies into small and simple tasks that are entrusted to self-managed teams, the structure of the organization needs to be changed.

To this effect, I propose that the leadership sets up 3 internal value-chains, respectively for the operations, for the support activities, and for the corporate functions. These 3 internal value-chains cooperate on the management of the 2 external value-chains, namely: the customers’ and the suppliers’ value-chains. Each of the 5 value-chains has its own modus operandi, but the Agile Management is adaptive and it optimizes their synergies.

Basically, the work that is assigned to people does not change all that much. What changes is that management is practiced as a team-sport, that people are empowered and that they cooperate creatively. The structures of the organization amplify the interactions among individuals and among teams across the value-chains. The value-chains enable individuals and teams to see the whole process of management, from suppliers to customers. As they see how their task fits in a broader frame this makes their contribution more rewarding.

-4- The <systems of management> need to include the intangible resources because many interactions among people and among teams create <business value> on the intangible resources. I advocate that the <systems of management> breaks down the planning and the report on the creation of <business value> on my model of the 5 <corporate capitals> - four of which are intangible resources. Moreover, each of the <corporate capitals> breaks down in 5 <capital components>. While the 5 <corporate capitals> consolidate the picture, the <capital components> gets into the details that are understood and managed by the self-managed teams.

-5- The <shared critical capabilities> are considerable enhanced because the many small and empowered teams are more committed, more cooperative, and because their collective creativity is duly recognized and rewarded first of all by those that are close on their value-chain, and then by management. Moreover, many small teams that are deeply involved in their work and in their interactions with others constitute the big wave that will abate the many unnecessary hurdles that some managers may have set up essentially to protect their power. 

Closing remarks

Agile Projects are a natural for IT programmers, and Agile Management may be a natural for software based companies. Yet, for traditional organizations Agile Management involves the innovation of the management. As mentioned in my previous short-paper “The hard- and the soft-side of corporate reorganizations”, large companies reorganize every 2-3 years. People are getting used to the fact that reorganizations are necessary. However, unlike the majority of the corporate reorganizations that focus on external results, the introduction of Agile Management involves an innovation at the core of the management system. Thus, it leverages as appropriate the involvement of all the live-forces of the organization because the change is too deep for a small group of senior managers or for a swat team to carry out. Moreover, the advocated programs of agile management innovation is not a one-time chore but the driveshaft of future management innovations.

Bibliography

1. Agile Alliance see it on Wikipedia

2.The Agile Manifesto see it on Wikipedia

3. W. A. Sussland “The Platform of Agile Management and the Program to Implement It”  2017