What Does It take to be Agile?

There's a lot of discussion in many fora about the meaning of Agile, Agile Leadership and Agile Business, with some pundits even saying that "Agile is dead!" Inevitably many authors feel the need to go back to the Agile Manifesto and quote its principles. However, I feel that they get it wrong.

I have always had problems with the Agile Manifesto. Not because it was not a good thing or a great call to arms, but because, at its core, it just focused on 20% of any project or development activity. This really goes back to how it evolved as the shared set of principles that a dozen different groups found that they could agree upon and the fact that the lowest common denominator was the act of programming.

Just to illustrate the point, if you want to develop a mobile app and ask a man in a garret who specialises in these things, he will probably quote you somewhere around £20K for a simple app. By the time you have run through the whole project and costed all the effort which goes into the development, it will probably cost you around £100K to £120K in its entirety, because you need to go through the activities of planning, budgeting, researching, defining and agreeing requirements, workshops with users or customers, coding, demonstrations, testing, configuration management and publishing to get there, with some overhead for project management and development sourcing (even if this is internally developed).

The Agile Manifesto left out a lot of critical assumptions, such as some analysis is required to get to scope and a prioritised list of requirements. Standards and an architecture are mysteriously deemed to exist so that the developers can use them. Testing and implementation are miraculous things which just happen because working code has been delivered.

If you go into the real world, one of the biggest bottlenecks in delivering projects and products is Financial Approval. Often this has nothing to do with the business case, but more to do with internal organisational politics and the competition for investment funds. If governance is not well aligned to clear and explicit strategy, and the senior management of an organisation don't work well as a team in prioritising investments to deliver strategy and to preserve existing value, then this act can take longer than the actual project. So it was good to see Daniel Lambert's blog on strategy and architecture, discussing its need for success with Agile.

The Agile Business Manifesto is also an interesting document, although to my mind still a bit clunky and lacking focus on Quality, Value and Strict Scope Control (e.g. via MVP concepts). I also think that it is weak around Cultural orientation towards Innovation, Design Thinking and aligning Risk Appetite with Value. The principle around Strategy does not quite get the message across either. You need grand visions and hypotheses about how you will change the rules of your market, but then you need "proximate goals" or deliverable baby steps to address them with constant revalidation. Yet again there is the mistake of forgetting about data as well as informed decision making. Probably this is why awareness of the Manifesto is still low.

So we still need a better model and definition of Agile Businesses. Simply put, an Agile Business Focuses on Strategic Value and Quality, moving quickly and constantly to deliver ever increasing value. In doing this, it adopts an integrated team approach, encourages experimentation, prototypes and feed back, and analyses performance and perception data to fine tune delivery and plans. It never stands still, stops adapting or restlessly looking for new ways to improve value. It exercises a strong moral compass and attunes risk appetite to strategic delivery, innovation and optimal performance. It learns from experience, but also looks outwards for new ideas, inspiration and to understand trends.

Well that's my opinion anyway.

Look Outwards Look Inwards - What Does it Take to Innovate?

The Leadership Crisis In Innovation

Today's Digitalised Business Environment has caused a crisis in leadership within most large global organisations. Many CxOs have come to realise that they and their colleagues in their Senior Management Teams are part of the problem. Though some remain incredibly blind to this fact.

Why is it that business leaders actually inhibit their organisations' efforts to transform, digitalise and innovate? There are many possible answers to this question, though for American and European companies, one of the answers may be that the background of the leaders dose not predispose them towards innovation. Too many organisations are dominated by people with Accounting or Legal backgrounds and unfortunately these professions tend to lean towards conservatism, compliance and enforcement of rules, rather than trying to break the mould or implement business and cultural change.

Another possible answer is that most management teams don't actually function as teams. They are too often populated by people who are locked into functional siloes and turf wars. So whilst it would be simplistic and cruel to accuse them of all conforming to the often quoted idea that only selfish monomaniacs reach these positions, the environments in which they work often pushes them to behave a like they are. This makes it difficult to build the collaborative, innovative and risk taking culture needed to survive and grow in the new digital market place. 

So various people have been researching what it takes to become an Innovative Leader. See HBR and the Conference Board.

A Model Of the Innovator as Leader

The diagram below summarises the findings of a couple of pieces of research and the author's own experience. So it may not be perfect, but it at least represents some contemporary thinking on the subject and, hopefully, is useful.

Whilst it may be too simplistic to state that an innovative mindset requires a leader to look both outwards and inwards, this does underpin a lot of what is needed. In the model, VALUE, CURIOSITY and CONSTRAINTS interact in an almost chicken or egg situation (which came first?). A lot depends upon context and situation as to which is the starting place but a sense of each is crucial to an Innovator. 

VALUE is key because understanding what is valuable to your organisation and its customers (or other stakeholders if it is a Not for Profit one). Almost everything that an organisation does, should be aligned to optimising value, i.e. growing, preserving or protecting it. This includes innovation. So it is fundamental to understand what value means to he organisation and to its customers. Of course if a leader is thinking about starting a new enterprise, then some opportunity identification may be required first.

Understanding the CONSTRAINTS that an organisation operates under and what currently dictates market behaviour in its industry or sector is also fundamental, because this drives the Why questions? Why do we do things this way? why do customers behave like that? why do we not do this. Why are the constraints there and why don't we do things differently? (The why questions are sometimes called the 5 whys or 7 whys and basically, is a process of asking why enough times to get to the root of current behaviour) which then leads to What if questions such as What if this constraint did not exist? what would happen if we did this differently? etc. which lead to some theories about what works now and what would work in the future if the rules were changed, as well as some options for how to make these changes actually happen, which are postulates about how to disrupt the market place and are sometimes called BIG RULES.

CURIOSITY comes in from the other angle of observing what happens in the market place and asking why people do things. It also involves consciously looking outwards into different industries and disciplines through networking, attending industry events and carrying out research to see how they tackle different problems and then thinking about what lessons can be applied to your industry or even would spur new products or a startup business. It has been observed that many innovators are T shaped, as opposed to I shaped. I shaped people, only think about their discipline and nothing else. T shaped people, whilst having deep knowledge in their own area, also exhibit curiosity about understanding wider practices outside their specialism and applying them in a joined up manner. Curiosity identifies opportunities and asks why as well as what value can be derived from change.

These 3 themes of Understanding Value, Reviewing Constraints and Curiosity lead to the development of Vision. However, in most cases it requires an energised team to deliver a vision and successful innovative leaders involve the team in building a SHARED VISION of how things could be. This is an essential step in TEAM BUILDING as it helps motivate the team and encourages it to amplify any innovative efforts. Though a complementary aspect of Innovators is speed. Getting to market with an innovation, delivers most value if an enterprise is either first or second to market with a well targeted product. Hence VELOCITY of delivery is important, though it needs to be tempered with actually meeting a real customer need and being reliably and economically deliverable. This leads to the use of EXPERIMENTATION to test out the understanding of these needs as well as what actually works, and may involve exploration of OPTIONs to optimise the product. VELOCITY is also re-inforced by agreeing mutual stretch targets with the product delivery team. Note, the term mutual is important, as this is part of sharing and building trust. If the team buys into the targets, then trust and openness are more likely to be encouraged, leading to better team performance.

Other aspects of TEAM BUILDING and successful product development include DIVERSITY of the team and fostering an information based culture of decision making. Diversity in the actual structure of the team involves not only building a multi-functional team involving the internal disciplines needed to design, develop, deliver and market the product, but also where practicable a customer element. It also may include multi-cultural, multi-age aspects to encourage creative vitality by encouraging multi faceted view points within the product development process.

Adopting an Information based approach, means that the team must be INFORMATION RICH. Where it does not have information to support its decisions, experiments, trails, prototypes or other research should be conducted and the knowledge gained should be readily shared to support both effective and informed decision making, but also foster trust and understanding within the team. Though sometimes it has to be recognised that it may not be practicable to collect data before a product is launched. In this case, the team may have to either build features into the product which collect the data, supporting future product iterations, or use other means such as agile marketing to test hypotheses.

The last bricks in the model are SIMPLICITY and SYSTEMS THINKING. Taking an end-to-end view of how a product is delivered, enables the product team to anticipate likely problems as well as analyse operational performance and customer experience during delivery, so that continuous incremental improvements can be built into the product, refining its capabilities and delivery. SIMPLICITY, is a principle that should be applied as far as practicable. The product itself should be made as simple as practicable to deliver the value required by the customer. The delivery processes should be kept simple too, ensuring that activity is concerned with delivering value or experience. If complexity has to be increased to add value, e.g. by operating in multiple markets, then the team should look to see what else can be simplified. 

Conclusion

A leader needs his or her team to perform, because the leader can not do all the innovation him (her) self. The Team will only work if it is empowered, informed and enthused. so innovative leaders can set the context and the challenge, ensure that their teams are well informed, but also challenge them on value and pace. However, this does mean avoiding death marches, mountains of red tape and punishing the innocent, when things don't go as planned. The old ways have to die.

Culture Shows Up Again as the Thing Driving Agility

Forbes Insights and the Scrum Alliance have got together to publish a recent report on Organisational Agility, drawn from interviews with over 1,000 C-suite executives from around the globe.

A key theme which runs through the whole report is how important Culture is to Organisational Agility. (Something which I emphasised in "The Way of DAU"). Additionally, there are some compelling findings about the benefits of organisational agility. Over 50% of respondents identified benefits in the areas of:

• Time to Market
• Speed of Innovation
• Employee Morale
• Ability to Attract Talent
• Competitiveness
• Financial Results
• Ability to Manage Across Geographies

To re-inforce these findings, the report focuses on the performance of leading Agile Organisations and Laggard Organisations. Whilst they represent similar proportions of the overall survey population (16% and 19% respectively), twice as many Leader Organisations enjoy annual growth of over 20% as Laggards do.

In all probability, the CxO community that the authors consulted, probably included a pool of organisation most interested in Agility, as an earlier report by McKinsey suggested that only 4% of organisations have completed an organisation wide Agile transformation.

The report looked at a number of things, including whether organisational agility was End-to-End or siloed in functions. Based on the opinions of the respondents, it appears that Operations and Technical Functions tend to be the most Agile (79% and 75% respectively), followed by the usual suspects in Sales and Marketing. Interestingly enough, Finance achieved a credible 64% vote of confidence, but HR was amongst the laggards with only 56% of respondents considering it an agile function. Considering that HR is often thought of as the "Guardian of Culture" this is a worrying gulf and should be a wake up call to HR to re-vitalise its mission.

One area that I would have liked more analysis on, was whether Leading Agile organisations already had positive innovative and collaborative cultures before they embraced Agile or had to focus on it as part of Agile Adoption.

Anyway, the take away is that all CxOs, irrespective of function, need to work on fostering the right culture.

Way of DAU Release 2

Release 2 of the Way of DAU has been released via Amazon and is available as a printed version here  and as an electronic version here. 

This takes into account feedback received for the MVP version and is now in a handier physical paper format.

I would like to thank everyone who took the time to provide comments and feedback.

The LinkedIn discussion forum can be found here if anyone has any constructive comments, suggestions or criticisms to help refine the next release of the book.

The Way of DAU - The best a business can be

Just to let you know, The Way of DAU is now available from Amazon as a paperback. (click on Amazon to see) and the e-version should be available soon. 

This is a deliberately simple book on the quite complex subject of how to adopt a sustainable digital business model. It was inspired by my personal frustration with incomplete models and advice available for Digital Business.

Digital operations have now replaced traditional Business As Usual business models. The Way of DAU promotes 10 basic principles, an iterative Framework (the DAF or Digital Adoption Framework), and positive cultural values to achieve the behaviours needed in successful digital businesses.

The book is based on a mixture of personal experience (in an organisation struggling to reinvent itself) as well as collected best practices. The current edition represents an MVP version. I hope to collect constructive feedback via a LinkedIn Group to drive future releases of the book. (see: The Way of DAU Group ).