Business Agility and the Problem with Management
Join Murray Robinson and Shane Gibson in a no-nonsense Agile discussion. In this podcast, Murray and Shane discuss why Agile change must come from the top. Why do some managers support an agile transformation and others block it? How agile transformations are done by big management consulting firms and how they should be done. Agile as cost-cutting vs evolutionary change. The politics of management and the gulf between words and actions. The importance of servant leadership and the adverse effects of power politics.
Shane Gibson
Today, we decided to talk about the whole world of business agility and why senior executives don't support the move to an Agile way of working.
Murray Robinson
Agile, lean and design thinking are very popular these days. Everybody's saying that they're doing it, and executives claim to be on board. They talk about it at conferences, and they hire big consulting firms to help them implement it. But I don't see much support for Agile in practice. Executives often put up barriers that prevent their organization's becoming Agile. Have you seen anything like that?
Shane Gibson
I've never been lucky enough to go into an organisation that's doing Agile from the top. That is adopting an Agile way of working for the business and then changing how the organisation works and behaves. I've always gone in at a team or department level because that's where the data teams sit. Usually, a forward-thinking executive brings me in when a senior team member advocates for agile. Then, as the teams start to experiment, they realise that coaching help may be helpful. So the executive sponsors the cost and permission to do it. Those are the engagements I like because we have somebody senior who's holding the shit umbrella. They hold an umbrella above the team, and they give them time to learn. I've worked at the team level in other organisations where we don't have that senior sponsorship, and we're constantly fighting a rearguard action. So we have people asking why we are working in this weird and wonderful way? Why aren't we writing six months worth of requirements documents? I don't know why some execs are willing to take the risk and experiment with Agile, and others are not ready to.
Murray Robinson
I have been an executive in a leadership team. I was a Delivery General Manager at a midsize digital agency and then the Consulting Director and Chief Product Officer. That organisation went Agile because it had got itself into serious trouble by overpromising and underestimating projects. I know another organisation that went agile when they couldn't get the revenue they were expecting. The CEO of their Digital arm was running his business unit successfully using a fast, iterative agile approach. So they made him CEO of the whole organisation. He implemented this mindset to the entire organization, and it seemed to be going very well.
Shane Gibson
So, there is a compelling event that drives organizations to make changes, and there are execs who are open to trying an Agile approach because they have to do something different. I’ve always wondered if senior people who've had success with an Agile way of working would do it again when they changed organisation. You said that the person that came into the CEO role from the Digital team had been through it before, was convinced that it was successful and, therefore, adopted it from the top because why wouldn't you. I wonder if there are any stats about how many times people do it more than once?
Murray Robinson
I've seen Agile rolled back a few times. It's always been because there's been a change of leadership. The new leader is a traditional authoritarian, command control person who believes in big design and big plans upfront. They are someone who wants everybody to do what they're told. That doesn't mean that they're old, they can be young, but they have an aggressive mindset. They’re usually men too. It tends to be a macho thing.
Shane Gibson
How do execs make that decision to take a risk and go agile? Are they going to the shiny suit consulting companies and drinking the agile digital transformation kool-aid? Or do they have cohorts of executives they trust who said: “we tried it and it seems to be working for us”? Do you think they're getting taught it when they do their ongoing education stuff?
Murray Robinson
When you're an executive, you're in a highly political environment. It's usually tough to tell what caused what. There are many people claiming success for things that other people did or that were indirectly related to what they did. Then there's a lot of people blaming others for something that they did themselves. Being an executive is like being a politician in parliament. Some execs are honest, open, caring, compassionate, and straightforward, but they tend not to do as well as very political people.
I've seen many executives get on board with Agile because it's the new shiny thing that will be good for their careers and get them promoted. It shows that they're innovative and forward-looking. Some of them will develop a belief in Agile because of their involvement. Others will discard it as soon as it becomes difficult or the next shiny thing comes along. Some people believe in it because they have seen that it's valuable, like the guy I was talking about, who became CEO of a company after running their digital arm. He was firmly committed to Agile, and it was working well for them. There were people like me when I was in senior management. I could see that it was going to solve a lot of problems. But a lot of people are doing Agile because it sounds good. Project Directors and Executives all say that they're doing Agile. They don't know what it is, but they can't admit that. So when they implement Agile, they get in the big management consulting firms to tell them what to do. And as we've discussed before, they usually don't know how to do it either.
Shane Gibson
I've seen that political environment. That corporate gladiatorial colosseum where you either win or lose. And if you lose you look for another job. That's why I have the utmost respect for the senior people that have sponsored me to go in and help their teams do this experiment and to try changing the way they work. What I've never known is why they're taking a risk. I don't believe they take the risk without having a good understanding of what Agile is. They're not Cowboys. They don't shoot from the hip. Most of them would have done the research and considered it. They would have thought that it's worth taking the risk because it looks like the rewards for the organisation and themselves are there. If you're an exec, what do you need to know? I'm assuming that an Agile Scrum 101 course is not good value for them. It's not valuable enough for them to free up two or three days of their time. In your experience, what does an exec need to know about Agile to take the risk to let it go?
Murray Robinson
Fundamentally, they need to learn to trust their teams. You've got executives who will find Agile a good fit for them because they are servant leaders. Somebody who is a servant leader will find Agile fits well with them and their way of doing things. They need to focus on restructuring into product teams, improving their processes with lean, and taking a very different approach to projects. People like that could be helped by getting in trainers and coaches. You can get an intro to Agile by doing a two-day course, but you can't learn it deeply. You need experienced people to help you because there's a lot of change. Implementing Agile and becoming an Agile organisation is one of the most significant changes an organisation can make because it challenges the factory model. Most organisations are set up like a Ford factory where you've got a function that does a specialised thing very efficiently. They pass it to the following function who do their bit, and eventually, a car pops out the end. That's a very efficient system, but it only works when you build the same thing over and over again. It doesn't work when you're trying to do anything new. In my experience, managers don't understand that. They've been brought up in a factory model and a factory mindset. They don't know how different you have to work when you're developing products or software. Apart from training, they need experts to come in and help them, and they need new leaders.
Shane Gibson
It's important to differentiate between people who manage teams and people who lead companies. If I were having a conversation with a team manager, I would tell them different things about Agile than an exec. I would tell Execs what Agile is and why they should take the risk and let their team have a go. But more importantly, I would tell them what's likely to happen so they can manage the political risk. If I were having a conversation with a team manager, I would say that the team would start to self-organise. All the task management will disappear, and you're going to end up doing something else. I'd also tell them that the team will start working with velocity, and then they will be constrained by other groups. They're going to be reliant on them, and those teams will not deliver on time. So you will need to start focusing on unblocking the team or bringing skills from those teams into your team so that you're an end to end product team.
Murray Robinson
You're talking about middle-level managers there.
Shane Gibson
If I go into the exec, and again, you play more in the exec space than I have, I would say that in the first three months, if we're doing Scrum, the team will deliver less than they've ever delivered before because they are completely changing the way they work. So if it's a very political organisation, you're going to be exposed for not doing what you and your team promised in those first three months. So figure out how you're going to deal with it.
Murray Robinson
That’s not a problem for them because they never deliver anything in the first three months. It takes years to get things.
Shane Gibson
I would say to them that your team will be successful after six to nine months if we're using Scrum. After that, every other exec will want your team doing something for them for free because they need stuff done, and your team is now recognised as the one team that can get shit done. So you’ve got to figure out what you do there. I’ve seen what happened. They trade. They build alliances, let the team help the people in their alliance, and often don't let their team help other people.
Murray Robinson
I still think you're talking about middle management level Shane.
Shane Gibson
Oh, I've seen that in more senior levels.
Murray Robinson
I know two examples of executives of a bank and a telco who did an Agile transformation. I've talked to the consultants and coaches who were in there at the top, and they told me why they did it and how it went. In both cases, the CEOs struggled to deliver the profit that their shareholders and boards expected. They talked to the big three management consulting firms, McKinsey, Bain and BCG, as they always do. One said they had helped ING bank use Agile to cut costs by 15% and drastically increase their profits. They promised the execs that they could do the same because Agile makes you more efficient. Agile requires fewer managers, so you can fire 15% of your managers and staff and make a big profit. The big consulting firms say they've done it all before. They've got an extensive playbook. They have all of the structures and the processes you need and all the international experts. You bring them in for $12,000 a day per person, and after a few tens of millions of dollars, they'll reorganise your organisation into an Agile one using the Spotify model and SAFe. They will implement Spotify tribes and guilds organised around products, and they will do a big bang transformation because they're good at change management. There'll be lots of secret meetings in closed rooms to develop a new organisational structure and work out who's going to make the cut. They will design and implement the change for you, and there'll be lots of videos and PowerPoint packs to persuade people. You can implement the new roles in one big bang, and suddenly you've doubled or tripled your profit overnight. Executives signed up for this on the basis that if they get half of what was promised, it'll still be good.
Shane Gibson
It'll be good for profit, but it won't be good for the people who are being changed and managed in yet another restructure.
Murray Robinson
Well, this is the way executives think. It's not about the people, it's about how they deal with the pressure from their shareholders. Of course, executives want their people to be happy, and they want to produce good products, and they want their customers to be satisfied. But that's all after making a significant profit.
Shane Gibson
Okay, what you're saying, though, is that if an executive is interested in Agile and talking to the big three, they're not getting a description of what Agile is; they are getting the benefits. If you do this Agile thing, these are the benefits for you, so go forth and conquer
Murray Robinson
It's like a black box.
Shane Gibson
That's part of the problem. They're not providing an umbrella. They're not providing a change in the way the organisation works. Another thing is that as your team changes, you can no longer budget and plan the way you used to.
Murray Robinson
The consulting companies will help you change the budgeting process to go to quarterly budgeting.
Shane Gibson
Okay, so the executives are getting the education they need to empower the organisation to change.
Murray Robinson
The management consulting firms are restructuring the organisation and defining roles and responsibilities. They're doing change management, and they are coaching and teaching the execs. Usually, they have one person who knows what they're doing and many young people following a playbook. But these execs are intelligent people. They will buy a book and learn about it. They know they have to get on board this new thing, so they'll be enthusiastically on board with it. What's driving the change is the profit outcomes they expect. Agile transformation is being sold to increase profit by improving efficiency and making you faster and more innovative like Amazon. It's sold on an outcome basis. Once it's implemented the CEO, and the next layer down is keen on cutting costs and getting the profit that we're talking about. But after that, everybody else and even the executive team is going with the political climate. They'll be saying that they are entirely on board with Agile and enthusiastic about it. But at the same time, they'll be trying very hard to defend their territory. This is what's going on. There's a lot of saying A and doing B. That takes a large amount of an executive's time. They're focused on defending their territory and trying to grab new territory.
Shane Gibson
If I walked into one of those organisations and went to one of the teams, would I have the perception that the organisation is behaving in an Agile way, not just the team?
Murray Robinson
Well, you would undoubtedly see a lot of packs and videos saying that.
Shane Gibson
I know I’d see a lot less hierarchy in the titles. We had one of those organisations help one of our telecommunication companies in New Zealand. My understanding is that around six levels of middle management were removed from that organisation. I've seen a lot of cases where middle management is removed, but the people doing those roles move into equivalent Agile roles such as product owners. We move the slippers, but we don't change the feet. But in this case, they took a large number of people out of the organisation from middle management roles.
Murray Robinson
Agile change is sold based on profit and cost. So there's a target they have to meet for reducing the number of managers. So that's what they'll do.
Shane Gibson
So the big three are doing the old restructure to save money using the Agile brand as their excuse. I remember that we used to do time and motion studies for this.
Murray Robinson
It used to be business processing reengineering, total quality management and Lean Six Sigma.
Shane Gibson
Okay, let's park that for now. If I'm an exec that has heard about the benefits of Agile, where do I go to understand what Agile is? There's no Agile MBA.
Murray Robinson
You can do an entrepreneurial MBA where they talk about Lean Startup.
Shane Gibson
But where do execs understand what Agile is, why they should do it and what it means for them if they commit to going down that path?
Murray Robinson
Well, they could come and talk to people like me. That's my shameless sales pitch.
Shane Gibson
I've seen organisations, and consulting companies use the two-day SAFE course to educate an exec. I struggled with that because it gets into the weeds. The execs I talked to said it was great. They were immersed, and in two days, they learned lots of jargon and saw a big picture that made sense to them. Because there were lots of boxes and that fitted with the organisation they have now. Then they went back to their desks and got involved in the next fire. That's not something that I would recommend.
Murray Robinson
I need to make a distinction between what execs do and what they should do. Execs usually ask the big management consulting firms to make them Agile. Then those firms implement a cookie-cutter rollout. Most management consultants don't know what they're talking about when it comes to Agile, but they've read stuff in books and are implementing it. What execs should do, is get in a bunch of very experienced Agile coaches like me to help them. But they tend to go for the big brand name firms. Execs should start by going on a short Agile course to learn the basics with other senior managers. A course that's not going to be embarrassing for them. Then you need to hire and engage people who know what they're doing, to work with you at a senior level.
Shane Gibson
I've got a slightly different flavour on that one. I am a contract Agile coach. I do work not as a permanent, but as a consultant. My view is that you should only bring in external Agile coaches if you've already created a small Agile coaching team, and you need to upskill them. The Agile way of working is a lifestyle that will carry on forever, and you're always going to need coaches. Sometimes getting experienced coaches who want to be permanent for an organisation is hard. We have value when we go in and help those organisations, but one of our goals should be to make other people as good as us to leave and help the next one. So they've now got a sustainable way of coaching within their organisation.
Murray Robinson
We've said repeatedly in our podcast that an organisation should start small, prove that it works, do experimentation and roll it out. Then, scale it up but not in a great big bang. Scale up the things that work evolutionarily and exponentially. Use Agile to implement Agile.
Shane Gibson
That's important. Another tip is that once your team's successful, you should help another exec and their team implement what you've done. Expanding that way of working across the organisation will require the executive team to support other teams because they are all new. Often when execs are in a siloed hierarchy, they are not going to help anybody else. But if we want the organisation to change, we have to seed that behaviour across the organisation. You need to bear the cost of helping because you can't let them go and do it on their own. Why would you let another part of the organisation go through the same mistakes you made if you could help them do it quicker and better?
Murray Robinson
Business agility is not about implementing Scrum at the team level. That's not going to get you very far. Agility requires a significant change to your mindset, structure, and basic assumptions about business and organisations. As I said, it's a change from a factory mindset to an exploratory mindset. A lot of people say they're having trouble with Agile because of the culture of the organisation. If we look at the Agile surveys, they say that culture is the biggest thing. We don't do this here, and the execs are not supporting us. But culture is not something you can change directly. Culture is a result of management behaviour. Managers reward some things and punish others, and then everybody follows it. That's what creates your culture. To get a supportive environment for Agile, you need to get your executives and managers to change their behaviour. That's only going to happen if you change the structure and what's rewarded.
Shane Gibson
And how they are rewarded as well. Most of those financial structures are based around individuals, not around teams. How do you change the compensation structure to be more team-based to match what we're asking for. How do you change the executive compensation structure to support this new way of working across the organisation? Not just focusing on their group being successful, so they get their bonus?
Murray Robinson
There's got to be something in it for executives. They've got to see how they can do well in an agile organisation. How can they gain personally? People who have built up a functional empire in design, sales, or architecture are focused on getting more budget, more staff, and more influence. Now you're saying that their function is going to be distributed amongst product teams. They are going to find that extremely threatening. They will say that they love it, and then try and do everything they can to stop it. You've got to find a way of showing them what they will get out of it. That they will get new responsibilities, which are going to be as important as their previous ones.
Shane Gibson
People who behave like servant leaders will find that Agile is a natural way of working. They are the best execs I've ever worked with. They allow their teams to experiment, and they still seem to get promoted because their teams do such a good job. The success goes up to those execs, and they tend to get the next level up. Unfortunately, other people don’t behave that way. What should we call them? What's the anti-pattern for a servant leader? Hero leader, super leader? Dictator. Manipulative leader?
Murray Robinson
I call them a politician,
Shane Gibson
A political leader focuses on looking good. Do we think politicians are command and control leaders? So maybe we got three: a servant leader, a political leader and a command control leader. So those are the three personalities.
Murray Robinson
Politicians tend to be into command and control because they're putting out a story that's different from reality. So they have to control communications to prevent people from talking and to make sure that their story is the one that gets accepted.
Shane Gibson
I've seen people come out of organisations that are very factory based that aren't particularly good at politics, but they're very command control.
Murray Robinson
Well, maybe there's authoritarian leaders, political leaders, servant leaders, and bureaucrats.
Shane Gibson
The bureaucrats and the authoritarians are probably the same.
Murray Robinson
I've worked with quite a few bureaucrats who are friendly and easygoing. But all they are focused on is stability, process and harmony.
Shane Gibson
So we're saying that if the exec behaves like a servant leader, we’re in their boots and all helping them because they want to understand and see how Agile helps their team and organisation. Then they'll support everybody as much as they can. What about the other three? Do we think that they will eventually die out? I don't think they will. I'm not convinced. You said age doesn't infer agility. When I was going through school, I was taught factory processes. Lots of economic theory and all that stuff. I know that education systems change, but nothing has changed that much. I don't think we are teaching young people today anything around servant leadership and agility and different ways of working. I'm not convinced we are, not in my country.
Murray Robinson
There's a core of 25% of managers who are this positive type of servant leader. Then the rest are doing what they know and what's worked in the past. But there's quite a lot of people who are capable of change. Before I got into Agile, I was pretty authoritarian at times as a project manager. It was because senior execs told me that I was responsible for the outcome. They told me that I must deliver the project on time no matter what. So I took on that responsibility and tried to make it happen. But I couldn't because other people were doing the work. I was trying to control things and to make people do something to get results. So, I was an authoritarian asshole for a while when I was younger. But I learned over time to let go and share my responsibility with the team. That was a critical moment for me. I've continued to learn how to do that. There's a lot of managers who are frustrated with how management is being done today and are capable of learning servant leadership. Once they've discovered that it's terrific, they want to keep doing it. But there's also a lot of people who don't. I've met many Scrum masters, who are authoritarian, command and control project managers, who are behaving the same way as they were before.
Shane Gibson
We did a podcast about the Agile Project Manager where I was relatively negative about them, and you're more optimistic about them.
Murray Robinson
We switched roles this time.
Shane Gibson
Early in my career, we did Myers Briggs or one of those personality classifications.
Murray Robinson
That's BS, by the way.
Shane Gibson
I'm going to be kinder than you; understanding where somebody is coming from helps you maybe change the way you engage with them to make
Murray Robinson
If you do the 16 PF personality profile, I agree with you, but I object to Myers Briggs.
Shane Gibson
Well, these days, I do the Simpsons one because it's free, online and funny. You'll laugh when you guess which one I usually come out with. If execs are servant leaders, authoritarian, political, and bureaucratic leaders, we need to tailor the conversation based on their personality style.
Murray Robinson
You could do that. I think what happens is that the organisation appoints an innovative servant leader in a senior role. Then that person tries this new approach because it fits with them. Then people under them fall in line with the new direction because that's how the executive wants to go. Then these people will become open to doing agile, and you've got an opportunity to encourage good behaviours, train people, challenge their assumptions and change the structure. Daniel Mezick, who does a lot of work around Open Leadership and Open Space Agility, says that you can change how an organisation works within three days by changing decision rights. Once you do that, the culture will change. If you change who has the power to make decisions, you can change how people behave. And beliefs follow behaviour.
Shane Gibson
It makes sense to me. However, I'd want to see it in practice to understand how many times it causes damage versus how many times it is successful.
Murray Robinson
Look at racism, for example. The research shows that the most racist people are the ones who have the least to do with another race. The least racist people are the ones who live in a mixed-race environment in which people are getting along. People can change depending on the environment they're in. The research has shown pretty strongly that beliefs are about helping you to fit in and do well in the environment you're in. If the climate changes, and you need a different behaviour to do well, then people start behaving differently, and then their values, assumptions and beliefs follow.
Shane Gibson
I've seen that with teams. I will often find that there are people on the team who don't believe that this thing will be successful. They fear being forced to do Agile with daily stand-ups, or they come from a reasonably structured background and this is all mumbo jumbo to them. But as the team changes the way they make decisions and how they work, people change their behaviour and beliefs.
Murray Robinson
Some people won't change, but they're a minority.
Shane Gibson
Some people vote themselves off the island. It's not for everybody, and that's okay. Closing out, I'm going to keep working with teams and departmental people because the politics at that exec level where Agile has been used to cut 15% of staff sucks. I've got to look at those classifications of the servant leader, politician, authoritarian and bureaucrat, and try to work with servant leaders. I'm going to keep the idea that the execs are taking a risk if they sponsor this change.
Murray Robinson
They are. If you're a servant leader trying to implement this change, you take a small risk with tremendous rewards. But it would be easier not to change anything.
Shane Gibson
What’re your takeaways from this discussion about why execs don't get business agility?
Murray Robinson
Execs don't get it because they don't want to, because they're afraid of losing power. I find that problems with agility are not due to what's going on at the team level. Teams accept Agile ways of working quickly and easily because they can see it helps them a lot. The blockers to being Agile are all coming from middle and senior management. Some of them are on board, some pretend to be on board but will undermine you, and some are against it. To become a successful Agile organisation, you need strong support from your leadership because Agile is a significant change. You might say, “So what? Who cares?” Why would they even do Agile? Well, when you become Agile across the whole organisation, you get a lot of benefits. You are more efficient and effective. You are more innovative and successful, and you are much more customer-oriented. Organisations who are creative, fast and efficient because they're doing things in new ways are out-competing the old organisations. People are doing this because they see that Apple, Amazon, Google and Spotify are all doing things differently and being very successful. Organisations that aren't agile or that are paying lip service to it are slowly declining. They won't decline overnight because they’re big and have a lot of money, but they will slowly slip away, losing market share and profit. If you want to be part of the future, you have to try and become a more Agile organisation throughout.
Shane Gibson
And if you want to lead the charge, be a servant leader, because then lots of people will jump on board and help you be successful. So those are the people that make it successful and the people we want to work with.
Murray Robinson
There's a burning need for change in these organisations. Plenty of people recognise that the organisation is dysfunctional, even the ones that appear successful on the surface. A lot of people in management and teams want to improve the way things are done. There's a need for change. It’s like the time before a bushfire. The grass is dry. If you light a match, then change will take off.
Shane Gibson
Well, we'll close it out here. It's been a good chat. We'll catch you next time.
Murray Robinson
Thanks, Shane. That was the no-nonsense Agile podcast from Murray Robinson and Shane Gibson. If you'd like help with Agile, contact Murray at evolve co that evolve with zero. Thanks for listening