Until recently, Agile was seen as a set of management practices relevant to software development. That’s because Agile’s initial advocates were software developers and its foundational document was the Manifesto for Software Development of 2001. Fifteen years later in 2016, following recognition by Harvard Business Review, McKinsey & Company and the 2015 Learning Consortium Project, Agile is now spreading rapidly to all parts and all types of organizations.
Agile’s emergence as a huge global movement extending beyond software is driven by the discovery that the only way for organizations to cope with today’s turbulent customer-driven marketplace is to become Agile. Agile enables organizations to master continuous change. It permits firms to flourish in a world that is increasingly volatile, uncertain, complex and ambiguous.
Agile goals, principles and practices will be highlighted in a session at the Drucker Forum, with Gary Hamel as a discussant.
The Evolution Of Agile
The Agile Manifesto of 2001 reflected the views of visionary software developers who believed that “uncovering better ways of developing software” would require a reversal of some fundamental assumptions of 20th Century management. They valued “individuals and interactions over processes and tools, working software over comprehensive documentation, customer collaboration over contract negotiation and responding to change over following a plan.”Today In: Leadership
Yet also implicit in the Manifesto was a new set of questions: “What if we could create workplaces that drew on all the talents of those doing the work? What if those talents were totally focused on delivering extraordinary value to the customers and other stakeholders for whom the work is being done? What if those receiving this unique value would be willing to offer generous recompense for it? What would these workplaces look like? How would they operate? How would they be reconciled with existing goals, principles and values? Could they operate at scale? If so, would the answers have implications for all organizations, not just software development?”
In 2001, no one really knew the answers to those questions. Software developers began trying to find out through experiments. As with anything new, things proceeded in fits and starts, with frequent setbacks. Many variations in practices were explored. Even when the practices were in essence the same, the approaches often had different labels.
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The initial experiments were with single teams. As some of these experiments succeeded, the experiments expanded to groups of teams and eventually very large scale implementations, even whole organizations and into other sectors such as manufacturing. Some organizations, that were “born Agile,” like Riot Games and Spotify, grew rapidly and continued to be run according to Agile principles and values.
For some years, it was hard to make sense of what was going on. Even some of those who embraced Agile saw it as playing a limited role, mainly in simple software activities in small units or organizations where reliability was not an issue. Many teams and firms that claimed to be Agile were Agile in name only. Some suggested that Agile, as it expanded beyond individual software development teams, would inevitably mutate into traditional hierarchical bureaucracy in order to achieve efficient, reliable management at scale.
Yet over time what was working and what wasn’t became apparent. As a result, there came to be a striking convergence toward a family of goals, principles and values that were demonstrably more productive and responsive to customer needs than traditional management.
As Agile is increasingly applied to large scale projects, the gains that become possible at firms are dramatic, particularly the ability to deliver instant, frictionless, personalized responsiveness at scale, such as Spotify’s Discover Weekly.
General Management Embraces Agile
As software itself becomes a critical driver in almost all businesses, Agile is now spreading to every kind of organization and every aspect of work, as recognized in 2016 by the citadel of general management—Harvard Business Review—with its article, “Embracing Agile,” by Darrell K. Rigby, Jeff Sutherland and Hirakata Takeuchi.
“Now agile methodologies—which involve new values, principles, practices, and benefits and are a radical alternative to command-and-control-style management—are spreading across a broad range of industries and functions and even into the C-suite. National Public Radio employs agile methods to create new programming. John Deere uses them to develop new machines, and Saab to produce new fighter jets. Intronis, a leader in cloud backup services, uses them in marketing. C.H. Robinson, a global third-party logistics provider, applies them in human resources. Mission Bell Winery uses them for everything from wine production to warehousing to running its senior leadership group.”
The centrality of Agile for general management was also recognized in April 2016, by McKinsey & Company with a Global Agility Hackathon involving some 1,500 participants online:
“Becoming an agile organization is an increasingly urgent necessity for companies in today’s digital economy, yet most companies have a deeply embedded command organization architecture and culture. This reflects, first and foremost, the industrial economy mindsets and skills of their senior leaders, which is arguably the greatest obstacle to becoming an agile organization… To make the transformation, senior leaders must learn and practice a holistic and complete set of new mindsets and skills, and apply them to design a wholly new, agile organization architecture and culture.”
The Learning Consortium And Agile
The emergence of Agile for general management was also confirmed by the findings of the 2015 Learning Consortium Project, This was a group of organizations including Microsoft, Ericsson, CH Robinson, Magna International, Riot Games, and Scrum Alliance that set out to see what is actually happening in firms that say they are practicing Agile management and related management practices such as Lean. Amid conflicting claims as to whether Agile is something real or merely a management fad that is all talk, the Learning Consortium Project sought to find out what is actually happening on the ground.
The site visits showed that in some cases Agile was indeed no more than talk—all hat and not cattle. Even though managers in those organizations claimed to be Agile and even implemented some Agile practices, the organization was still functioning as a top-down bureaucracy. But in other cases, the site visits showed that some major corporations have large-scale implementations of Agile goals, principles and values. In effect, as the report points out, Agile at scale is already happening.
Mindsets And Individuals Over Tools And Processes
A great deal has been written about Agile. Much of that writing is about things—tools, processes, methodologies, technologies, platforms, big data and the like.
While the 2015 Learning Consortium Project found that these things are important, people are more important—the goals that people aspire to, the mindset through which they understand how the world works, the way they work together, the values that they share, and manner in which they communicate with each other. As the Agile Manifesto itself said, individuals and interactions are valued more than tools and processes. Without the Agile mindset, tools and processes achieve little.
A Different Concept Of An Organization
What makes Agile difficult for some managers to grasp is that it’s not just a methodology or process that can be implemented within a firm’s current assumptions. The Agile way of running an organization redefines the very concept of a corporation that has prevailed for the last one hundred years.
Instead of a corporation being conceived as an efficient steady-state machine aimed at exploiting its existing business model, the Agile organization is a growing, learning, adapting living organism that is in constant flux to exploit new opportunities and add new value for customers.
Instead of power trickling down from the top, Agile recognizes that the future of a firm depends on inspiring those doing the work to accelerate innovation and add genuine value to customers. It recognizes that enhancing the capacity of those doing the work depends on giving autonomy to self-organizing teams within broad parameters of control. It values transparency and continuous improvement ahead of predictability and efficiency. It recognizes that open interactive conversations are more valuable than top-down directives. It stops doing anything that is not adding value to the ultimate customers. It realizes that the key to success is not to do more work faster. The key is to be smarter by generating more value from less work and delivering it sooner.
Agile obliterates the traditional management distinction between exploitation and exploration. When Agile is done right, all parts of the organization are continuously exploring how to add more value to customers. This not only creates meaning for those doing the work and delights those for whom the work is done: it results in generous returns to the organization itself.
To its advocates, Agile is a genuinely better way to run a company and an economy—better for those doing the work, better for those for whom the work is done, better for the organization itself. Instead of management extracting value from the firm, Agile generates value for customers and for society as a whole.
The SD Learning Consortium
As the successor to the 2015 Learning Consortium Project, the SD Learning Consortium (SDLC) is a non-profit organization whose members are organizations committed to discover together the world’s most advanced goals, principles and practices—including but not limited to Agile—and disseminate them globally in order to help transform the world of work.
The SDLC conducts site visits to its members, synthesizes what they have discovered together, and disseminates its discoveries, through reports, web posts, social media and participation in conferences. Current members of SDLC include Barclays, Cerner, CH Robinson, Ericsson, hhpberlin, Microsoft, Riot Games and Scrum Alliance.
The SDLC has just completed eight site visits, including Barclays, Cerner, CH Robinson, Ericsson, hhpberlin, Microsoft, Riot Games, BMW and Spotify. The members will meet in New York in mid-September 2016 to take stock of their findings.
As Agile itself continues to evolve, the members of the SDLC see themselves as discoverers and explorers, like medieval map makers, whose maps enabled the discovery of the New World. They present what they have learned not as the final word but as a first approximation of emergent realities.
The SD Learning Consortium at the Drucker Forum
The report of the SDLC will be presented at the Drucker Forum under the title, “Large-scale Organizational Transformations Enabling Rapid Business Innovation.” In a session with two executives from members of the Learning Consortium. Gary Hamel will be the discussant.
The session will report on the extraordinary new developments in rapid innovation at large scale observed in the site visits of the SDLC—developments that would have been inconceivable even a few years ago, including the demonstrated capability:
• to deliver instant, frictionless, personalized responsiveness at scale.
• to create workplaces that enable continuous innovation with high-quality, sustainable management practices for thousands of workers that operate durably at scale for many millions of customers.
• to deliver to customers scores of innovations per day in a low-stress high-engagement working environment.
• to capture, analyze and respond to feedback from many millions of customers receiving daily innovations.
The session will focus on the implications of such practices and capabilities for entrepreneurship and innovation in the 21st Century.
Disclosure: I am an unpaid pro bono adviser and director for the SDLC..