THE THREE LAWS OF AGILE

I recently read the book “The Age of Agile” by Steve Denning, which illustrates how smart companies are transforming the way work gets done in the modern world using Agile.

I highly recommend the Lean-Agile transformation leads and business executives to read this before the start of their organization’s Agile implementation journey to reap the full benefit of it.

Below is the essence of the book:

When we say the words, “agile” or “Lean” you might think about a squirrel or an elegant ballet dancer or a champion soccer player. You probably wouldn’t think of a large organization which is clumsy, clunky, sluggish, out to make money from the customer, and basically unfriendly.

We’re accustomed to dealing with companies that are frustratingly set in their ways and preoccupied with their internal processes. Their motto could be: “You take what we make, and that’s the way it is.” The possibility that companies could become agile and lean is thus not distinct.

When we look closely, we can see that organizations that have embraced Agile have three core characteristics.

Agile operates under three laws.

1. The Law of the Small Team
2. The Law of the Customer
3. The Law of the Network

Together they generate the basics of the Agile organization. Methods may change, but the Agile mindset applying the three laws of Agile endures. They offer a lasting guide to what’s involved in an organization becoming Agile.

1. The Law of the Small Team

The first universal characteristic of Agile organizations is the Law of the Small Team. Agile practitioners share a mindset that work should, in principle, be done in small autonomous cross-functional teams working in short cycles on relatively small tasks and getting continuous feedback from the ultimate customer or end-user. When we are involved in a small team where communications flow effortlessly, and the group seems to think and act as one. When we are members of such a team, we can analyse a situation, decide, and act as though it is a single, uninterrupted (flow) motion. There is no one in charge, telling us what to do. We trust the other members of the team. The performance rewards that trust. It’s almost as if the group has a mind of its own. Face-to-face (now maybe virtual Face-to-face) conversation sorts out any differences in point of view. Work becomes fun.

Whereas work in most conventional organizations is very different. Big systems implemented big plans delivering large quantities of a standard product. Work is broken down into small meaningless pieces. Individuals reports to bosses who ensure consistent and accurate performance by the specifications. The boss’s boss does the same, and so on, up the line. Plans and budgets are generated and allocated, division by division. Immense internally focused systems often hid the connection between any particular piece of work and its impact on a customer. The result? Only two in five workers today is fully engaged in his or her work, and even fewer are genuinely passionate—a disaster for firms that increasingly depend on a motivated workforce.

Still, most organizations stay stubbornly bureaucratic. One reason is the pervasive management believes that the teams can’t deliver disciplined, efficient performance at scale: they are useful for solving complex one-off problems, but for the run-of-the-mill work in a big organization, the conventional wisdom is that bureaucracy is better.

Another reason is that most teams in the conventional organizations are teams in name only. Most of them aren’t real teams at all. The team leader acts like any other boss in a bureaucracy.

2. The Law of the Customer

The second characteristic of Agile organizations is the Law of the Customer. Agile practitioners are obsessed with delivering value to customers. The primary importance of the customer is recognized in the first principle of the Agile Manifesto.

Globalization, deregulation, and new technology, particularly the Internet, provided the customer with choices, reliable information about those choices and the ability to connect with other customers. Suddenly the customer was in charge and expected value that is instant, frictionless, and intimate.

As a result, firms had to think about the customer in a new way. conventional firms had gotten used to the notion that they could exploit and manipulate customers. If a customer didn’t like something they were offering, the firm would say, “We hear what you’re saying, but that’s what we’re offering. We’ll consider introducing changes in our next model, now some years away.” In today’s more competitive marketplace, in which customers expect instant, frictionless, intimate responsiveness at scale, this approach is steadily less effective. The customer is thinking: “Why are we waiting a couple of years? If you don’t fix it now, I will find someone who will.”

It’s not that these bureaucratic organizations ignore the customer. They do what they can for the customer—but only within the limits and constraints of their internal systems and processes. Firms may say they are customer-focused, but if the information they need to answer simple questions from customers is hidden in multiple systems that don’t talk to each other, or if customer services must be cut to meet a quarterly profit target, then it’s too bad for the customer. The customer gets the short end of the stick. In a top-down bureaucracy, “the customer is number one” is just a slogan: internal systems, processes and goals take precedence.

In the Agile organization, “customer focus” means something very different. In genuinely Agile organizations, everyone is passionately obsessed with delivering more value to customers. Everyone in the organization has a clear line of sight to the ultimate customer and can see how their work is adding value to that customer—or not. If their work isn’t adding value to any customer or user, then an immediate question arises as to why the work is being done at all. The firm adjusts everything—goals, values, principles, processes, systems, practices, data structures, incentives —to generate continuous new value for customers and ruthlessly eliminate anything that doesn’t contribute.

3. The Law of the Network

The third characteristic is the Law of the Network. Agile practitioners view the organization as fluid and transparent network of players that are collaborating towards a common goal of delighting customers.

In the early years of the Agile movement, it was generally assumed that if you could get high-performance teams going, then the organization would be “Agile.” It turned out not to be the case. It isn’t enough to have Agile teams focused on delivering more value to the customer if the rest of the organization is being run as a top-down bureaucracy concentrate on cutting costs or increasing the current stock price. The downward dynamic undermines, and if continued, eventually kills the Agile teams.

Moreover, when Agile teams are housed within a bureaucracy, a collaboration between teams can be just as much a problem as it is between silos in a transparent administration.

The problem is widespread, even in organizations that are actively embracing Agile at the team level. A survey found that some 80-90% of Agile teams perceived tension between the way the Agile team is run and the way the whole organization is run. In half of those cases, the pressure was rated as “serious.”

The Law of the Network is the new frontier of the Agile movement—how to make the whole organization Agile. It’s a tough nut to crack because Agile represents a radically different concept of an organization.

The fortress is run from the top, with an assumption that the top knows best. The fort is “built to minimize risk and keep people in their boxes and silos,” as renowned Harvard Business School professor John Kotter writes. People “are working with a system that is designed to get today’s job done. A system that asks most people, usually benignly, to be quiet, take orders, and repetitively do their jobs.”The exploitation of the existing business model takes precedence over the exploration of new possibilities.

Over many decades, multiple fixes were explored to alleviate the static nature of the organization, including task forces, special project groups, strategy departments, tiger teams, skunkworks, R&D, dual operating systems, knowledge funnels, design thinking and so on. But these were still fixed to the same concept of the corporation as a static machine with a vertical reporting dynamic. Big bosses continued to appoint little bosses, and so on down the line. The organization continued to operate like a giant warship. Big and efficient but slow and hard to manoeuvre.

By contrast, when the whole organization truly embraces Agile, the organization is less like a giant warship, and more like a flotilla of tiny speedboats. Instead of a steady-state machine, the organization is an organic living network of high-performance teams. In these organizations, managers recognize that competence resides throughout the organization and that innovation can come from anywhere. The whole organization, including the top, is obsessed with delivering more value to customers. Agile teams take the initiative on their own and interact with other Agile teams to solve everyday problems. In effect, the whole organization shares a collective mindset in which the organization is viewed and operated as a network of high-performance teams. This how Business agility can be created in an organisation to reap the fullest benefit of the Agile.