Non-Violent Agile, The Microsoft Way
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Non-Violent Agile, The Microsoft Way

This article first appeared in Emergence, The Journal of Business Agility June 2021

Since the turn of the millennium the market had valued Microsoft with little change, hovering at around US$300B. Then something happened. In the past five years Microsoft's market cap has shot up over 600%. With a recent increase of over US$1.5 trillion to near $2T, it grew six times faster than the DOW index. Appointed in 2014, CEO Satya Nadella oversaw this rapid growth to be named the best CEO in America with Microsoft becoming the most valuable company in the world.

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?Author pictured during a Microsoft visit regarding their agile transformation journey

To What Would You Attribute Microsoft’s Remarkable Turnaround?

In his book Hit Refresh describing Microsoft’s transformation journey, Nadella explained, “I found out the key was agility, agility, agility.”[i] But what was it about their approach to agility that worked when so many others fail? Microsoft fostered an inclusive approach we might call NVA, Non-Violent Agile, a pattern for transformation to a more human-centric company by leveraging the principle of polarities in their early agile organization design and then widely enculturating it through non-violent communication.

Since Microsoft began their journey in 2008[ii] at least thirty studies from organizations the size of Microsoft on down show the clear case for transformation and 90% of CEOs now believe it is critical.[iii]?Yet what Microsoft achieved has been elusive to many. A recently retired senior partner from a premier global consulting company admitted to a friend that half of their transformations fail. If only half fail, that might be a good rate of success. “While many companies are striving to become Agile, only four percent of survey respondents have completed an organization-wide transformation”?a McKinsey survey reports.[iv]

Convergence has Accelerated Each Wave of the Agile Movement

Business agility can be contextualized within the “three waves” of the agile movement.[v] The first wave occurred around the signing of the Agile Manifesto twenty years ago. The agile community converged on team success patterns and became reliably and repeatedly able to form teams that worked extraordinary more productive than the hierarchical and sequential ways dominating the time.

Based on the patterns for how large numbers of teams successfully interact it appears there is convergence on the second wave of agile. An order of magnitude greater in complexity, it has taken a while, but self-similar patterns appeared in SAFe, Scrum@Scale, LeSS, Self-Management, and other approaches. At one point I wondered if “scaling agile” would mean how the entire enterprise could become agile[vi]?— what we now call “business agility”.[vii] However, scaled agile delivery transformations were incomplete and ran into tension at the boundaries with the rest of the enterprise.[viii] Case in point, only with last year’s release of SAFe 5.0 were more considerations added for “business agility.” Prior to that, the entire SAFe “big picture” merely left a small box in the upper left called “Enterprise” to represent the goings on with the rest of the organization outside of delivery.[ix]

The need now is to converge on patterns for business agility, an even more complex undertaking of yet another order of magnitude. In 2015 I helped convene a peer-to-peer learning group with eleven different companies aimed at understanding the emerging patterns for how entire enterprises become agile.[x] Findings were published, and reported at the Drucker Forum management conference [xi] which helped raise the awareness about the primacy of the “agile mindset”,[xii] a powerful observation that successful transformation leaders had something common in their mindsets, even in different contexts and applying various methods.

?The popular Peter Drucker quote that “culture eats strategy for breakfast” affirms what McKinsey reports, that culture is a chief impediment to transformation.[xiii] What then is culture? Microsoft CEO Nadella observed that culture is the “complex system made up of individual mindsets.”[xiv] So, we might say “If culture eats strategy for breakfast, then mindsets feasts on culture.” Mindset is now identified as the number two challenge to business agility.[xv] However, observing that mindset is the key to transformation just begs the question: “What is a mindset?”

What Do We Mean by “Mindset’?

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A mindset[xvi] is like any other complex system, in this case — a sense-making system. If a mindset were an iceberg, the part you see above the water represents the observable behaviors, the kinds of things a camera could record. The part below the water we can think of in two parts. At the lowest level are the underlying values. Values represent who I am, such as, I am nice, open, or cautious, compared to how I decide (my principles), or what I do (my behavior).[xvii]

The Need to Converge on The Third Wave of Agile

There is widespread agreement on what are effective agile teams and scaling behaviors, and the supporting principles such as those in the Agile Manifesto, and values such as the FROCC Scrum values.[xviii] We can also define a traditional, administrative, or managerial mindset as reflected in their different values, principles, and behaviors. Once examined, or experienced, we can easily perceive the opposing tension between a managerial mindset and an agile mindset.

How does a business agility transformation proceed when it is made up of apparently opposing mindsets? I have encountered three typical strategies. Attempt to change the non-agile mindsets to agile ones, banish from the organization those with the “old” mindset, or keep the two apart with a dual operating system. As those involved in enabling transformation, let us at least agree that leading with the intent of changing other people who are not asking to be changed is an immoral, even violent approach.

Here is where Microsoft provides a more human-centric design guide that leverages these seemingly opposing mindsets to a common end. In 2008 Microsoft engineer and program manager Aaron Bjork formed the first agile team as an experiment on his own. Within a couple of years agile teams had spread among his “DevDiv” group and by 2010 they had 25 teams. The next year the whole unit decided to “go agile”[xix] and received support from senior leadership, including the soon-to-be-named-CEO Satya Nadella. Eventually about 4000 people in the DevDiv unit moved to agile ways of working.

The simple set of values Aaron’s group brought to the forefront are from Daniel Pink’s language.[xx] Aaron says, “We've found that the key motivating factors for people are?autonomy, mastery,?and?purpose.”[xxi]?As good as this is, if Aaron stopped at this, they would probably have seen the typical tensions arise between the agile operations and the rest of the traditional enterprise. Instead, they discovered how to converge on a new harmonized and synergistic way forward by leveraging two vital mindset polarities. Aaron explained it this way: “Two items we heavily consider for our approach are?alignment?and?autonomy:

Alignment: Happens from the top down, ensures people understand what we're going to do and that people are lined up on business goals, aspects, and why we're trying to do what we're doing

?Autonomy: Happens from the bottom up, ensures people come into work every day and feel like they have a big impact on day-to-day activities and decisions.

?There is a delicate balance between the two - too much alignment and a negative culture gets created where people punch in, punch out, because that's what the "manual" says to do; too much autonomy and there's no structure or direction, leading to inefficient decisions and plans."[xxii]

Aaron depicted this as a triangle that infers the span of control increases as you move up the org and the number of team members increases as you move down. I heard it said that a lot of conversations went into harmonizing these polarities. It appeared to me that the conversations of what constitutes alignment and what autonomy never entirely subsided. The line between appears more like a zone that is always being reviewed and adjusted.[xxiii]

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Valuing polarities is seen in the ancient wisdom of the Chinese yin-yang, or the two-faced Greek god Janus.[xxiv]?The goal is not a compromise but a creative synthesis. The alignment <> autonomy dynamic is one necessary polarity that appears in any larger organization. By recognizing this Microsoft did not attempt to change, dismiss, or hold at bay one mindset over another.

One example for applying this to organizations goes back to Barry Johnson’s 1992 work Polarity Management who writes, “Many of the current trends in business and industry are polarities to manage, not problems to solve. These trends are often described as movements from one way of thinking or acting to another.”?Johnson cites trends like to shift “from autocratic management to participatory management” that we see Microsoft successfully harmonized.

Other trends Professor Johnson warns to avoid are:

from neglect of the customer to focusing on the customer
from individual to team
from competition to collaboration
from rigid structures to flexible arrangements

When properly understood, the Agile Manifesto’s four principles are also polarities that the signatories perceived needed to be rebalanced to better fit their challenges for complex product (software) development. Polarity patterns appear often. For example, in the right and left domains of the Cynefin model, also between puzzles (known-unknowns solvable by experts and good practices) and mysteries (unknown-unknowns best solved by teams and emergent practices). Or in the design-deliver or dev-ops loops.

While there were plenty of motivators for their change, Microsoft did not fall into the trap of viewing agile transformation like so many agilists have, that of seeing the organization as a move from a set of problems they were experiencing, and to agile as the solution. We see this conventional from-to approach with business pundits like Gary Hamel with his recommendation to move from “bureaucracy” (problem) to “humanocracy” (solution). Or the move from command and control (problem), and to agility (solution). Or a move from hierarchy (problem) to a network (solution).

This type of either/or, from/to thinking ignores the vital capabilities that are needed to create a greater unitary whole. Like trying to put two magnets together the wrong way it also adds a source of resistance to the change. Professor Johnson recommends inclusive conversations with both polarities such as, “How do you bring adequate clarity to a situation without being rigid?” This brings forth the benefits of each pole, while respecting, and including all involved. Polarity mapping exercises can also facilitate leveraging all insights.

Microsoft essentially asked a similar question ‘How might we create alignment (clarity) so to enable effective autonomy (flexibility)?’ If Microsoft had started with ‘How do I get management out of the way (problem) so my agile teams (solution) can perform?’ They would have ended up like the 96% of transformations McKinsey report have not achieved the hoped-for transformation benefits.?

Following this Microsoft model has served me well when designing and enabling agile organizations. I have leveraged polarities at two regulated utility companies to launch agile transformations, resolved a contentious culture-clashing M&A integration, transformed a multinational software company across culturally different geographies, and leveraged both analytic mindsets and design thinkers to help transform a consulting behemoth, among others.

Yet I have not seen a model for business agility that leverages polarities until now, from my friends at VORSPRUNGatwork in Germany.[xxv] “Vorsprung” evokes the image of springing off a diving board and might help us leap forward toward converging on a business agility model.?

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VORSPRUNGatwork has brought their “High Impact Business Transformation” approach to over thirty successful transformations including a tier-one automaker. While I cannot do it justice in this brief look, at a high level we can see VORSPRUNGatwork provides a view of the entire organization along two vital polarities shown here with the Microsoft dynamic turned to left/right. VORSPRUNGatwork labels these the “Business System” and the “Operating System” with dynamics such as stability <> agility and exploit <> explore.

With the VORSPRUNGatwork HIBT approach the Business and Operating system dynamics and mindsets are brought out of opposition and into a continual dance, appreciating them as two sides of the same coin that are never truly separate or apart. Like in the yin-yang symbol which has a spot of dark in the light and visa-versa, both system elements are ever present in each other.

This is not a from-to approach, not a move from the current state to a new state as traditional strategy planning would suggest. However, by skillfully leveraging the polarities, a new (or renewed) organizational capability emerges for “persistent self-transformability.” As Nadella says, it is not "as much about any particular strategy or anything, it's a meta framework for how one pursues this constant process of renewal".[xxvi] The VORSPRUNGatwork HIBT provides a model for business agility meta framework.

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Fortunately for Aaron and his group, Satya Nadella was promoted to became only Microsoft’s third CEO ever and he greatly expanded transformation efforts. Fast Company’s technology editor Harry McCracken wrote that Nadella set out to “run the company differently from his well-known predecessors, Bill Gates and Steve Ballmer, and address Microsoft’s long-standing reputation as a hive of intense corporate infighting”[xxvii] as was wonderfully satirized by programmer/cartoonist Manu Cornet in this 2011 org chart spoof [xxvii] the truth of which bothered Nadella.[xxix] I had the privilege to study Eastern and Western philosophy and am not surprised that it took a person of both cultures like Nadella to sense and respond to “that disharmony” and refresh Microsoft’s innovation and teamwork capabilities.[xxx]?

Nadella Begins CEO Tenure by Harmonizing Polarities Company-Wide

McCracken continues, “One of Nadella’s first acts after becoming CEO, in February 2014, was to ask the company’s top executives to read?Marshall Rosenberg’s?Nonviolent Communication, a treatise on empathic collaboration.” I was surprised and delighted to hear this. I am a longtime fan and recommender of his work and had the privilege of workshopping with Rosenberg. NVC begins with appreciating polarities. For example, rather than merely dismissing, or reacting to someone we take a step like we see with Professor Johnson’s polarity mapping and flip to another pole to consider “what is the positive intent behind this person’s position?”?

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?Working with polarity is nicely depicted in the NVC logo.?

?Nadella recalls a time when he and his colleagues at Microsoft used to attend “a class on ‘precision questions’ to destroy everybody’s idea in the first five minutes by asking these highly analytical questions [but] it was being used as a tool for offence….to be an effective leadership team, we will have to practice non-violent communication” Nadella told his senior managers at the start of his CEO tenure.[xxxi] "It was a little bit of a surprise," said Microsoft President Brad Smith. “There was definitely a sense that this was something different."[xxxii]

Some rightfully decry the “agile industrial complex” and others have given unbalanced approaches nicknames such as "Sweatshop Agile", "Fake Agile",[xxxiii]?or?"Dark Agile”.[xxxiv] Transformations too heavy on “alignment” are easy to spot because right from the start they are being imposed by management, typically with the help of external consultants, using off the shelf methodologies, and without the realignment needed to structure and policies. In short, the very antithesis of agile. The business agility transformation journey itself must seek coherence from the start. As Myron Rogers stated so succinctly, “The process you get to the future is the future you get.”?

?At Microsoft I asked an engineer off the cuff how their transformation so far had gone for him. He said it had not always been easy. I asked, “Would you go back to the way it was?” He said, “No way!”?It is said “all models are wrong, and some are useful” and useful it will be with more convergence on the business agility third wave of agile. We will accelerate the transformation of more organizations like Microsoft to become more vital, human-centric places to work. By leveraging polarities let us leap forward non-violently into a better future for the lives of many, and for our planet.

After a few decades of operating and scaling-fast growth tech companies, Jay Stanton Goldstein is an agile organization design and transformation enablement coach and consultant for fast growth and Fortune clients. Jay has developed and delivered entrepreneurship and agile leadership courses for Fortune companies, and Northwestern, Chicago, and Trinity International Universities. Jay holds an MBA from Kellogg School of Management and can be reached at [email protected] , and https://www.dhirubhai.net/in/jaygoldstein

END NOTES

[1] Satya Nadella, Hit Refresh, The Quest to Discover Microsoft’s Soul and Imagine a Better Future for Everyone (New York: Harper Collins Business, 2017) 51.

[ii] Microsoft’s earliest sustained change to agile ways of working our Learning Consortium identified in 2015 to be in the DevDiv unit starting in 2008. https://www.forbes.com/sites/stevedenning/2015/10/27/surprise-microsoft-is-agile

[iii] 95% increase in productivity, 37% revenue growth, 40% improvement in employee satisfaction, and 30% increase in productivity. Indeed the benefits of agile transformation are now so well proven that 90% of CEO’s believe business agility transformation is critical for their future success.– HBR Embracing Agile & HBR Agile Practice: The Competitive Advantage for a Digital Age, and https://www.cfoinnovation.com/organisational-agility-how-business-can-survive-and-thrive-turbulent-times

[iv] https://www.mckinsey.com/business-functions/organization/our-insights/the-organization-blog/culture-can-make-or-break-agility

[v] Charlie Rudd, https://www.solutionsiq.com/resource/white-paper/the-third-wave-of-agile-2

[vi] https://www.dhirubhai.net/pulse/what-does-scaling-agile-really-mean-jay-stanton-goldstein/

[vii] At the time of this writing there are several names besides “Business Agility” such as 21st Century Management, Agile, Management 3.0, Human-Centric Management, The Adaptive Organization, Elastic Enterprise, Future of Work, New Ways of Working, et al.

[viii] In webinars I helped conduct during 2015 as part of the Learning Consortium (sponsored by the Scrum Alliance) we polled hundreds of agilists and 86% reported some or significant tension between the agile operating groups and the rest of the organization.

[ix] See SAFe 4.0 image here for example. https://www.solutionsiq.com/resource/blog-post/look-whats-new-with-safe-4-0

[x] https://www.dhirubhai.net/pulse/learning-consortium-creative-economy-jay-stanton-goldstein

[xi]https://www.scrumalliance.org/scrum/media/ScrumAllianceMedia/Files%20and%20PDFs/Learning%20Consortium/Learning-Consortium-for-the-Creative-Economy-Report-2015.pdf

[xii] A frequently quoted portion of the report is as follows: “Although there is no “one size fits all”, the site visits revealed a family resemblance among the goals, principles and values of the companies visited [and] a recognition that achieving these benefits is dependent on the requisite?leadership mindset. Where the management practices and methodologies were implemented without the requisite mindset, no benefits were observed. Individually, none of the observed management practices are new. What is new is the way that the new management goals, practices, and values constitute a coherent and integrated system, driven by and lubricated with a common leadership mindset.”

[xiii] https://www.mckinsey.com/business-functions/organization/our-insights/the-organization-blog/culture-can-make-or-break-agility

[xiv] Nadella, Hit Refresh, 91

[xv] https://api.businessagility.institute/storage/files/download-research/bai-business-agility-report-2020c.pdf , p21

[xvi] https://www.dhirubhai.net/pulse/you-ready-agile-paradigm-shift-native-jay-stanton-goldstein

[xvii] Ahmed Sidky has published a similar model on what constitutes an agile mindset. Full disclosure, Ahmed was a member of the 2015 Learning Consortium through his role at Riot Games. See for example his recent talk, https://medium.com/icagile/the-agile-mindset-5e8328452a23

[vxiii]?https://www.dhirubhai.net/pulse/remembering-agile-scrum-values-jay-stanton-goldstein/

[xix] https://www.forbes.com/sites/stevedenning/2015/10/27/surprise-microsoft-is-agile

[xx] https://www.danpink.com/drive-the-summaries

[xxi] https://docs.microsoft.com/en-us/azure/devops/learn/devops-at-microsoft/agile-principles-in-practice

[xxii] Ibid

[xxiii] For Aaron’s group they decided the alignment elements included organization, roles, teams, cadence, and taxonomy (taxonomy referring to clarity on the shared meaning of their internal language used to describe how they work together). Engineering also enacted a move from functional teams (UI, API, Data) to cross-discipline teams of 10-12 people that can deliver a full feature across all functions, while acting with clear charters on a rolling 12–18-month basis. Other alignment dynamics I observed include a uniformity to the delightful and outside-windowed team rooms and the widespread use of rolling, standing/sitting desks, among other details. New team roles were aligned as “PMs: Responsible for what we're building and why we're building it.?Engineers: Responsible for how we're building it and ensuring we build it with quality.”?

[xiv] There are several polarity models we can consider applying. Recently I had the privilege to learn from Pete Behrens in his Agile Leadership Journey, the Competing Values Framework from University of Michigan published first in 1983. See https://agileleadershipjourney.com/ and https://community.astc.org/ccli/resources-for-action/supporting-documents/competing-values-framework

[xxv] https://vorsprungat.work

[xxvi] https://www.wired.co.uk/article/microsoft-ai-satya-nadella-company-tech-business

[xxvii] https://www.fastcompany.com/40457458/satya-nadella-rewrites-microsofts-code

[xviii] https://bonkersworld.net/organizational-charts

[xxix] Nadella, Hit Refresh, 1

[xxx]Ibid, 1-2

[xxxi] https://www.the-chiefexecutive.com/features/featuremicrosofts-latest-ceo-6086114/index.html

[xxxii] https://www.usatoday.com/story/tech/2017/09/25/satya-nadella-aims-make-microsoft-mighty-and-mindful/701763001/

[xxxiii] https://www.forbes.com/sites/stevedenning/2019/08/18/another-form-of-fake-agile-the-agile-sweatshop

[xxxiv]https://darkagilemanifesto.org/

Dr. Laurence Lock Lee

Chief Scientist & Co-Founder, SWOOP Analytics | Organizational Radiologist | Social and Collaboration Analytics Specialist | Social Business Evangelist|

3 年

Your push back on “from-to” transformation and Microsoft has got me thinking about a specific “tension” around how a “team” is defined in organisations. Microsoft in their Teams product supports 2 ways … one is as specified in the active directory (read formal org chart) the other is in the digital teams that are formed organically. I think this is a direct analogy to the Business System and Operating System dance you describe …which is going on right now …. We are long overdue for a catch-up …..

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Padma Satyamurthy

Building Excellence through new ways of working

3 年

I highly recommend this article

Very interesting. thanks for sharing

Cameron Powell

Generative AI Law and Policy | First Amendment/Voting Rights | Evidence-based Storyteller | Strategic Communicator | Startup Whisperer | Board Advisor

3 年

Well done, Jay! Very interesting take on agile

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