AGILE AT SCALE & Its 3 Laws Explained + 10 Agile Axioms That Make Leaders Anxious (and they should!)

by Steve Denning, Forbes Magazine, 6/17/18. 

If at first an idea is not absurd, there is no hope for it. —Albert Einstein

In June 2018,  a time when “Agile at Scale” is emblazoned on the front cover of Harvard Business Review (read the original “Agile at Scale” HBR article here), the management journal with quasi-papal status, the era when managers could confidently ridicule agile management practices is fading fast. Instead, most managers have themselves grasped the need to be agile: a recent Deloitte survey of more than 10,000 business and HR leaders across 140 countries revealed that nearly all surveyed respondents (94%) report that “agility and collaboration” are critical to their organization’s success. Yet only 6% say that they are “highly agile today.” So, what’s the problem? Why the 88% gap between aspiration and actuality.

…The three Laws of Agile are simple—first, an obsession with continuously adding more value for customers; second, small teams working on small tasks in short iterative work cycles delivering value to customers; and third, coordinating work in a fluid, interactive network.

…The Laws of Agile are simple but their implementation is often difficult. That’s in part because they are at odds with some of the basic assumptions and attitudes that have prevailed in managing large organizations for at least a century. For example, Agile makes more money by not focusing on making money. In Agile, control is enhanced by letting go of control. Agile leaders act more like gardeners than commanders. And that’s just the beginning.

For the traditional manager, counter-intuitive ideas like these abound. This is not the way people say big firms are run. This is not by and large what business schools teach…

First Law Of Agile: The Law Of The Customer

  1. Firms Make More Money By Not Focusing On Making Money

For several millennia, the notion that businesses exist to make money was seen as one of the immutable truths of the universe. Milton Friedman, the Nobel Prize winning economist, wrote in his article in the New York Times on September 13, 1970 that any business executives who pursued a goal other than making money for their firm were “unwitting pup­pets of the intellectual forces that have been undermining the basis of a free society these past decades.” Today, many public companies embrace maximizing shareholder value as their main goal, even though Jack Welch and many others have called it “the dumbest idea in the world.”

A growing number of companies have chosen a different goal. They have accepted Peter Drucker’s 1954 dictum that “there is only one valid purpose of a firm: to create a customer.” When delighting their customers through continuous innovation becomes the bottom line, making money is the result, not the goal, of the firm’s activities.

The interesting thing is that when firms operate this way, they make a lot more money than companies that focus directly on making money, including the five largest and fastest growing firms on the planet (by market cap): Amazon, Apple, Facebook, Google and Microsoft, now worth over $2 trillion. It involves a shift from a focus on inanimate things (money, products outputs) to a focus on people (human outcomes, experiences, impact)

Yet let’s face it: setting aside what many still see as an immutable truths of the universe doesn’t come easily.

  1. There Are No Internal Customers

It’s common in many big bureaucracies to talk of internal customers. One unit services another unit and regards the other unit as its internal customer, who in due course becomes a producer for the ultimate customer or end-user. …

In Agile management, there is no such thing as an “internal customer.” The only purpose of work is the ultimate customer or end-user. Under the Law of the Customer, the original producers not only meet the needs the internal customers: they are given a clear line of sight as to what value is being provided for the ultimate customer. Satisfying so-called internal customers is merely feeding the bureaucratic beast. It is a pretend-version of Agile.

  1. There Are No B2B Organizations

The situation is the same when a firm is providing products or services to another firm which acts as an intermediary for ultimate end user. The customers are the end-users who ultimately experience the products and services. Merely satisfying the needs of the intermediary is not enough for sustainability…

Similarly, Microsoft for many years saw the customers of its Windows program as the big retailers like Dell and HP. More recently, they have come to realize that their customer is really the end-user, not these intermediaries: there is now an immense effort to reach out to, undestand and interact with these millions of end-users.

  1. Making Better Products May Not Make More Money

Making products better, faster cheaper, more convenient or more personalized is a good thing. But in a marketplace where competitors are often quick to match improvements to existing products and services and where power in the marketplace has decisively shifted to customers, it can be difficult for firms to monetize those improvements. Amid intense competition, customers with choices and access to reliable information are frequently able to demand that quality improvements be forthcoming at no cost, or even lower cost.

Making better products through operational Agility is an increasingly-necessary foundation for the survival of a firm. But it’s not enough for the firm to thrive. To make a lot of money, the company has to go further. It has to delight non-customers—those who are not already customers. That’s because there are usually vastly more non-customers than customers. They are non-customers for a reason: their needs are not being met. If the company can find a way to meet their needs, then a whole vast new ocean of potential customers opens up, in which there is usually very little competition. If the firm can appeal to both customers and non-customers, it can make a great deal of money. “Instead of being slightly better than everybody else in a crowded and established field, it’s often more valuable to create a new market and totally dominate it,” writes David Brooks in the New York Times. “The profit margins are much bigger, and the value to society is often bigger, too.”

The Second Law Of Agile: The Law Of The Small Teams

   5.  Forget Economies of Scale: Your Market Is One Person

The 20th Century firm tended to be focused on generic products to achieve economies of scale. By contrast, Agile is about generating instant, intimate, frictionless incremental value at scale. That’s the new performance requirement. When firms do this, as shown by the experience of Amazon, Apple, Facebook and Google they make a great deal of money.

Thus Agile organizations focus on providing intimate value, with an effective “market of one”, i.e. a level of customization and customer service at which a customer feels that he or she is an exclusive or preferred customer of the firm. For example, search engines are used by billions of people every day across the globe. However, each user gets customized search results based on their locations and refer to places nearby, weather forecast, or traffic condition…

  1. Don’t Scale Up: Descale Complexity Down

A key Agile theme concerns descaling work, i.e. a presumption that in a volatile, complex, uncertain and ambiguous world, big difficult problems need to be disaggregated into small batches and performed by small cross-functional autonomous teams, working iteratively in short cycles in a state of flow, with fast feedback from customers and end-users…

Instead of constructing a big complex organization to handle complexity, the organization disaggregates the problem into tiny pieces so that it can be put together in minuscule increments and adjusted in the light of new, and rapidly changing, information about both the technology and the customer…

  1. Control Is Enhanced By Letting Go Of Control.

In Agile management, there’s a presumption that in a volatile, rapidly changing world, big difficult problems should—to the extent possible—be disaggregated into small batches and performed by small self-organizing teams. The thought of self-organizing teams tends to make managers worry about losing control. What they need to understand is that they are giving up the illusion of control, rather than actual control. In a complex, rapidly changing environment, explicit efforts to impose control and predictability are doomed. Detailed reports may create the semblance of control, but the reality is often very different from what is in those reports.

The solution to reconciling disciplined execution and innovation lies in giving greater freedom to those people doing the work to exercise their talents and creativity, but doing so within short cycles so that those doing the work can themselves see whether they are making progress or not.

  1. Agile Is A Mindset, Not A Process

Traditional managers typically approach Agile saying, “Show me the process so that I can implement it.” The problem is that Agile is a mindset, not a process. If it is approached as a process with the old mindset, nothing good happens.

But surely, people ask, there must be some model that we can follow. There is much allure for instance in the Spotify model as presented in the charming videos prepared by Henrik Nyberg. So there is a cry: “Let’s implement the Spotify model!”  There’s just one problem: as former Spotify coach, Joakim Sundén, often explains, not even Spotify implements the Spotify model. For one thing, the videos are several years old. Second, Spotify continues to rapidly evolve and improve its model. In a pair of visits in 2016, we noticed significant differences even within a period of several months.

  1. Talent Drives Strategy, Not Vice Versa

“The central premise of a talent-driven company is that talent drives strategy, as opposed to strategy being dictated to talent.,” says the book, Talent Wins: The New Playbook for Putting People First (HBRP, 2018) by Dominic Barton, the global managing partner of McKinsey & Company, and his colleagues Dennis Carey and Ram Charan, “The wrong talent inevitably produces the wrong strategy, and fails to deliver. Numbers like sales and earnings are the result of placing the right people in the right jobs where their talents flourish and they can create value that ultimately shows up in the numbers.”

The Third Law Of Agile: The Law Of The Network

    9. The Top-Down Organizational Pyramid Is Finished

Success in today’s marketplace requires nimbleness, flexibility, adaptability and agility—everything that the 20th Century corporation was not. These firms were built for strength, with high walls and moats for the defense of the status quo. Their very raison d’être was to prevent change.

Turning a top-down pyramid into a flexible network is tricky. At the heart of 20th Century management thinking is the notion of a corporation as an efficient steady-state machine aimed at exploiting its existing business model. “Traditional, MBA-style thinking,” as Google executives, Eric Schmidt and Jonathan Rosenberg, write in their book, How Google Works, “dictates that you build up a sustainable competitive advantage over rivals and then close the fortress and defend it with boiling oil and flaming arrows.”

By contrast, when the whole organization truly embraces Agile, 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 initiative on their own and interact with other Agile teams to solve common problems. In effect, the whole organization shares a common mindset in which organization is viewed and operated as a network of high-performance teams.

  1. Lead Like A Gardener, Not A Commander

In Team of Teams, by General Stanley McChrystal and his colleagues (2015, Penguin Publishing Group), McChrystal explains had to unlearn what it means to be a leader. A great deal of what he thought he knew about how the world worked and his role as a commander had to be discarded.

I began to view effective leadership in the new environment as more akin to gardening than chess,” he writes. “The move-by-move control that seemed natural to military operations proved less effective than nurturing the organization— its structure, processes, and culture— to enable the subordinate components to function with ‘smart autonomy.’ It wasn’t total autonomy, because the efforts of every part of the team were tightly linked to a common concept for the fight, but it allowed those forces to be enabled with a constant flow of ‘shared consciousness’ from across the force, and it freed them to execute actions in pursuit of the overall strategy as best they saw fit. Within our Task Force, as in a garden, the outcome was less dependent on the initial planting than on consistent maintenance. Watering, weeding, and protecting plants from rabbits and disease are essential for success. The gardener cannot actually ‘grow’ tomatoes, squash, or beans— she can only foster an environment in which the plants do so.”

Read more at … https://www.forbes.com/sites/stevedenning/2018/06/17/ten-agile-axioms-that-make-managers-anxious/#51ae8abc4619

And read also:

HBR Embraces Agile At Scale

Explaining Agile

Why Agile Is Eating The World

#Dmin

DELEGATION & How to Politely Turn Down Your Boss’s Request for Additional Work

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Read more at … https://www.hbrascend.in/topics/politely-turn-bosss-request-additional-work/

PREACHING & The Surprising Power of Asking Questions #OrganicChurchBook #HarvardBusinessReview

Commentary by Dr. Whitesel: When researching my Abingdon Press book, “Inside the organic church,” I found growing young churches often have sermons in which the audience is asked to respond to the preacher with live questions. Traditionalists usually found this worrisome, because they feared losing control of the learning experience. But research cited in this Harvard Business Review article demonstrates that asking questions deepens learning.  Not surprisingly, I practice questioning of my listeners in my courses, seminars and even sermons.

by Alison Wood Brooks and Leslie K. John, Harvard Business Review, May-June 2018.

“Be a good listener,” Dale Carnegie advised in his 1936 classic How to Win Friends and Influence People. “Ask questions the other person will enjoy answering.” More than 80 years later, most people still fail to heed Carnegie’s sage advice. When one of us (Alison) began studying conversations at Harvard Business School several years ago, she quickly arrived at a foundational insight: People don’t ask enough questions. In fact, among the most common complaints people make after having a conversation, such as an interview, a first date, or a work meeting, is “I wish [s/he] had asked me more questions” and “I can’t believe [s/he] didn’t ask me any questions.”

…Dating back to the 1970s, research suggests that people have conversations to accomplish some combination of two major goals: information exchange (learning) and impression management (liking). Recent research shows that asking questions achieves both.

… Not all questions are created equal. Alison’s research, using human coding and machine learning, revealed four types of questions: introductory questions (“How are you?”), mirror questions (“I’m fine. How are you?”), full-switch questions (ones that change the topic entirely), and follow-up questions (ones that solicit more information). Although each type is abundant in natural conversation, follow-up questions seem to have special power. They signal to your conversation partner that you are listening, care, and want to know more. People interacting with a partner who asks lots of follow-up questions tend to feel respected and heard.

An unexpected benefit of follow-up questions is that they don’t require much thought or preparation—indeed, they seem to come naturally to interlocutors. In Alison’s studies, the people who were told to ask more questions used more follow-up questions than any other type without being instructed to do so.

Read more at … https://hbr.org/2018/05/the-surprising-power-of-questions

TRANSITIONS & What to do when people beat a path to a new pastor’s door w/ new ideas

by Ron Carucci, Harvard Business Review, 8/8/17.

A 10-year longitudinal study on executive transitions that my organization conducted found that more than 50% of executives who inherit a mess fail within their first 18 months on the job… there are six things the most effective leaders do to avoid failing in a new role…

Know the fine line between self-promotion and real help. Fearing for their very survival, people in a damaged organization will campaign at great lengths to prove their worth. My client had people beating paths to her door with ideas that had languished unheard. They were eager to offer their support, and even more eager to be seen as key players in the future she was constructing. In one debrief, she vented to me, “On one hand, some of the elements of their ideas are really good. On the other hand, they are so invested in convincing me how indispensable they are that they’ve lost objectivity about what is and isn’t feasible.” She felt obligated to hear their ideas but reluctant to offer critique, for fear of appearing not open to any ideas but her own. She knew she couldn’t symbolically accept ideas just to look like she’d listened, nor could she be the only one whose substantive ideas prevailed. She created a process of full transparency that allowed ideas to be judged on the merits of their potential impact, not on who brought them. Together, the team created a set of criteria that future solutions needed to meet, and all ideas were presented to the entire team, not just her. Further, she made it safe for each presenter to disclose any personal agenda about why they wanted their ideas adopted and what fears they had about their ideas not prevailing. She asked them to “honestly assess your idea as if you had no fears about job security.” Not only did this accelerate trust among them, it also allowed the best ideas to prevail…

Read more at … https://hbr.org/2017/08/leading-effectively-when-you-inherit-a-mess

TRANSITIONS & Research finds 50%+ of leaders who inherit a mess fail w/in first 18 mo & 6 things NOT to do

by Ron Carucci, Harvard Business Review, 8/8/17.

A 10-year longitudinal study on executive transitions that my organization conducted found that more than 50% of executives who inherit a mess fail within their first 18 months on the job… there are six things the most effective leaders do to avoid failing in a new role.

Resist the temptation to emotionally distance yourself… Four weeks after my client’s arrival, I noticed a distinctive pattern in her language. When referring to the significant challenges of her new organization, she consistently spoke in third-person references — they, them, those people.

Never blame your predecessor. .. In one meeting, my client’s frustration got the best of her, and while looking over the past quarter’s budget, she blurted out, “What on earth was he thinking?” Well, since “he” isn’t there anymore, everyone else in the room was implicated by proxy.

Minimize references to past successes. …often beginning sentences with, “Well, when I was at XYZ company…” people simply shut down. I told her that those attempts to bolster her credibility were actually backfiring and that she needed to let the merits of her thinking stand on their own, without referencing where the ideas came from.

Know the fine line between self-promotion and real help. Fearing for their very survival, people in a damaged organization will campaign at great lengths to prove their worth. My client had people beating paths to her door with ideas that had languished unheard. They were eager to offer their support, and even more eager to be seen as key players in the future she was constructing. In one debrief, she vented to me, “On one hand, some of the elements of their ideas are really good. On the other hand, they are so invested in convincing me how indispensable they are that they’ve lost objectivity about what is and isn’t feasible.” She felt obligated to hear their ideas but reluctant to offer critique, for fear of appearing not open to any ideas but her own. She knew she couldn’t symbolically accept ideas just to look like she’d listened, nor could she be the only one whose substantive ideas prevailed. She created a process of full transparency that allowed ideas to be judged on the merits of their potential impact, not on who brought them. Together, the team created a set of criteria that future solutions needed to meet, and all ideas were presented to the entire team, not just her. Further, she made it safe for each presenter to disclose any personal agenda about why they wanted their ideas adopted and what fears they had about their ideas not prevailing. She asked them to “honestly assess your idea as if you had no fears about job security.” Not only did this accelerate trust among them, it also allowed the best ideas to prevail…

Read more at … https://hbr.org/2017/08/leading-effectively-when-you-inherit-a-mess

TEAMWORK & Team Leaders Should Play Favorites (but Only in Moderation)

Commentary by Dr. Whitesel: I’ve been an out-group member of a leadership team as well as an in-group member, and I can confirm what we all know: the latter is preferable. But why does this happen? It has to do with experiences that are embedded in our brains. The experiences foster “LMX” for “leader-member exchange” which can be stronger with certain people than others. But it will be helpful at times and hurtful at other times. Read this Harvard Business Review article to beginning learning the difference.

by Bradley Kirkman, Hui Wang, Ning Li and Yang Sui, Harvard Business Review, 4/10/17.

…But whether leaders think it or not, one of the most consistent findings in our (and others’) research is that almost all leaders do treat members differently — mostly without knowing they’re doing it. This works a lot like subconscious biases that, when revealed to people, almost always result in feelings of surprise and embarrassment. Leaders can’t help having implicit ideas and preferences for what they want their team members to do and to be like. And those preconceived notions lead to what researchers have called “differentiation” in the level of relationship quality leaders have with members, with relationship quality often referred to as “leader-member exchange,” or LMX for short.

When a leader and a follower share a high level of LMX, that follower typically exhibits the types of positive outcomes all leaders want to see, such as high performance, job satisfaction, and organizational citizenship behavior, or going above and beyond one’s typical job responsibilities. Those with high LMX are also more committed to their companies, more satisfied with their leaders, and less likely to quit their jobs. So if high LMX generates all of these positive outcomes, why don’t leaders build high LMX levels with all of their followers? We have already mentioned the effects of implicit leader preferences — a lot of differential treatment occurs naturally and without a great deal of conscious thought. Beyond the subconscious explanation, however, is one that is more practical: leaders today simply don’t have the time necessary to build high-quality relationships with everyone in their team. This is even more complicated in lean organizations, in which many leaders have responsibility for large teams (and often several teams at once).

Fortunately, research suggests that playing favorites can be healthy for motivating high performance in teams and individual members alike. In fact, the effects of LMX differentiation — or the extent to which leaders form relationships of different quality with members in the same team — can be positive for both team and individual outcomes, depending on whether certain conditions are present. For example, our colleagues Berrin Erdogan and Talya Bauer at Portland State University found that LMX differentiation has no effects or positive effects on individual team members as long as those team members perceive that their leaders have created a team climate characterized by fairness. That is, there are no effects or positive effects when leaders provide resources to team members using fair and unbiased decision-making procedures. Specifically, Erdogan and Bauer found that more LMX differentiation was associated with increased helping behaviors among team members when members believed they were working in a fair team climate. Similarly, Bob Liden of the University of Illinois at Chicago and his colleagues found that LMX differentiation was associated with higher team performance but only when there was a high level of coordination, communication, and integration within the teams (known as team interdependence).

Read more at … https://www.hbrascend.in/topics/team-leaders-should-play-favorites-but-only-in-moderation/

NARRATIVE & Followers Don’t See Their Leaders as Real People, But a Story Can Help

Commentary by Dr. Whitesel: Research cited in this article indicates that people create idealized mental picture of leaders. The authors discuss ways that authentic narratives can keep leaders from being hampered by exaggerated expectations.

By Nathan T. Washburn and Benjamin Galvin, Harvard Business Review, 1/23/17.

They may be flesh and blood to the senior team and the assistants in the C-suite, but to people in outer orbits, from operational departments to business units, they are imaginary constructs. Employees create pictures of what leaders seem to be, based on the bosses’ accumulated emails, tweets, speeches, and videos, plus whatever tidbits are picked up here and there.

Companies assume, or merely hope, that people will somehow derive inspiration from these mental images of the leader. But employees are judgy; a perceived shortcoming in a leader can easily undermine the image. But the mental process of building an imaginary picture is complicated, and certain weaknesses can be interpreted as strengths, lending the image an aura of authenticity. Understanding this process can be advantageous for leaders who hope to motivate and inspire.

Our extensive research suggests there are four rules governing how people create and respond to the imaginary leaders that live in their minds.

Read more at … https://hbr.org/2017/01/followers-dont-see-their-leaders-as-real-people