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

TEAMS & You need “deep domain experts” + “synthesis across domains”

Commentary by Prof. B.: Currently I am writing a new leadership course. As a busy church consultant/coach I’ve benefited from a deep expertise in my field. But, I also must partner with colleagues in other fields to write my courses for reasons this article and the research cited in it explains.

“Innovation Is About Networks, Not Nodes” by Greg Satell, Inc. Magazine, 12/2/17.

Exploring New Connections

For decades, creativity researchers have understood that deep domain expertise is essential for creativity. It is those that know a particular area very well who best understand which are the important problems, what approaches have already been used to try to solve them and what would be truly novel.

Yet it is also true that great breakthroughs arise through synthesis across domains. Darwin spent years studying fossils and morphology, but it was an essay about economics that broke the logjam and allowed him to put the pieces together. In much the same way, it was Watson and Crick’s broad approach that helped them win the race to discover the structure of DNA.

More recently, researchers analyzing 17.9 million scientific papers found that the most highly cited work is far more likely to come from a team of experts in one field that borrowed a small piece of insight from another. Innovation almost always involves a novel combination.

The only way to find that unlikely strand is to constantly make new connections. The more diverse information you come across, the more likely you are to find that seemingly random piece of insight that can help you…

Read more at … https://www.inc.com/greg-satell/innovation-is-about-networks-not-nodes.html

STRATEGY & If You Don’t Want to Be a Boring Leader, Stop ‘Strategizing’ and Do This Instead

Commentary by Professor B: I research/teach strategy and have led organizations from churches to denominational executives through the strategizing process. And, one of the biggest missteps is to create a strategy with too many people or too few involved. By “too many,” I mean having in the room people who are there because it is politically prudent to do so, instead of having experts in strategy involved. And by “having too few,” I mean not having people in the room who are involved in front-line, person to person tactical application of the strategy. For more on that see John Kotter, in his seminal article on “Leading Change: Why change efforts fail” in Harvard Business Review. And, for another overview of how to prevent these missteps, check out this INC. Magazine article.

If You Don’t Want to Be a Boring Leader, Stop ‘Strategizing’ and Do This Instead

by Robin Camarote, Inc. Magazine, 10/30/17.

The process problem is that we approach strategic planning as a group exercise. After spending literally hundreds of hours watching groups try to think together, I can assure you that no (okay, very few) brilliant strategic ideas come out when people gather.

The people problem is a touchy one. People invited to strategic planning efforts get there because of their title and their position — not because of their insight, energy, optimism, or even knowledge of the real issues facing the organization. They’re there because they have to be…

So, what could we all do better to avoid these process and people pitfalls?

  1. First, recognize that the strategy part of strategic planning is better done upfront and individually rather than in a group. Organizations should be training their staff on an ongoing basis to build critical thinking skills, stay connected with customers and the broader industry, and anticipate problems. These skills will make them more able to diagnose problems in the company and keep abreast of what’s trending in their market. Then, instead of bringing groups together, you can challenge the managers (at a minimum — you could include other members of the staff in this as well) to state the biggest problem they see facing the organization and how they’d propose to fix it. From there, you can either set up an organic process by which managers must build coalitions of support to move their solution forward, or, if you’re the team leader, you could simply pick the solutions that you see as most viable.
  2. Second, get in the habit of creating mixed planning teams. There is no reason that the most important planning exercise should be limited to those with certain titles. They might have earned the promotion, but they shouldn’t be the default group included. At a minimum, include representatives from various tiers in the organization, including junior staff and back-office support functions. If you’re really ambitious, add a representative customer and industry expert. Bringing in external perspectives is the best way to ensure you’re not stuck in an echo chamber and that this critical planning process doesn’t become just another thing to do among your senior executives. Most people tend to be on their best, most professional behavior when there is an outsider in the room — so facilitating the conversation becomes easier, as well.

Read more at … https://www.inc.com/robin-camarote/if-you-dont-want-to-be-a-boring-leader-stop-strategizing-do-this-instead.html

strategic planning strategy forecasting strategy Wesley Seminary

TEAMS & A video introduction to LEAD 600 assignments on team building

by Bob Whitesel D.Min., Ph.D., 9/22/17.

This video includes an annotated explanation of the assignment parameters on “teams” in LEAD 600. Before you watch the video be sure to  read the instructions in both the syllabus and weekly assignment.

©️Bob Whitesel 2017, used by permission only.

TEAMWORK & Here Are The Optimum # of Members You Should Have on Your Team, According to Science

by Marissa Levin, Inc. Magazine, 8/30/16.

The right number.

The ideal number of team members is two.

“Pairs are the simplest and most stable bond in chemistry and in life. Humans form pairs in love and marriage and as friends. Adding a third person to a pair often complicates matters, and some trios can be explosive,” says Karlgaard. There are four main categories of team pairings:

  • Occasion pairs come together for a specific project. They band and disband quickly. They don’t always like each other but they need each other.
  • Similarity pairs are often ideally paired and work together in complete harmony. They can become too interdependent on each other.
  • Difference pairs consist of partners that compliment each other’s strengths and weaknesses. They are opposites attracting.
  • Inequality pairs include leader/follower or mentor/protege pairings. There is always an imbalance among the partners.

For medium-sized teams, five-nine members is the optimal number for building closeness. For larger groups, 11-18 team members is the maximum number of people someone can trust.

For much larger teams, 150 and 1,500 are magic numbers.

…researchers and entrepreneurs Rich Karlgaard and Michael S. Malone distill the process of creating the highest performing teams in their best-selling book, Team Genius: The New Science of High Performing Teams

Read more at … http://www.inc.com/marissa-levin/the-5-most-important-characteristics-of-great-teams-according-to-science.html

keywords: LEAD 600 teams teamwork

TEAMWORK & What Makes an Organization “Networked”? #HarvardBusinessReview

Commentary by Dr. Whitesel; “People usually misunderstand the meaning of an organizational “network.” I’ve written a chapter about this in my book ORGANIX (Abingdon Press). But General Stanley McChrystal in his new book “Team of Teams” emphasizes that in the new “networked organization” we should create small informal networks that can morph and be ended as needed. These team-nets (my term) can be added to your existing organizational structure. General McChrystal created these teams among his fighting forces without changing the Army’s organizational structure. This means the “new network organization” creates short term task-forces or team-nets that organically get things done without changing the organizational structure. This is the same tactic I advocate we embrace in the church. For more on these new networks see this article in Harvard Business Review.”

Read more at … https://hbr.org/2015/06/what-makes-an-organization-networked

STAFFING & Do Genes Affect Our Attitudes Toward Becoming a Church Planter or Staff Pastor?

Commentary by Dr. Whitesel: “Researchers have found that certain genes affect whether a person gravitates towards independent work or interdependent teamwork. This is especially interesting when one considers that church planters may have a more independent work orientation and staff pastors may have a more interdependent work preference. This research reminds us that these choices can be influenced by our genes. Further research comparing populations of church planters with staff pastors would be insightful.”

 

Read more at … http://blogs.hbr.org/2014/05/do-genes-affect-our-attitudes-toward-interdependence/