Many organisations have adopted agile but how many ask the obvious question: What is the ROI on our investment in Agile and how will we measure it?
There are two ways I’d like to explore this topic: from the perspective of delivering an initiative (a product or project) with agile, and from the perspective of scaling this to an entire organisational (Enterprise Agility).
The ROI of Agile Delivery
On a project or product level, the ROI on agile is without doubt orders of magnitude greater than traditional methods. There have been a number of studies, the most notable by the University of Maryland, all of which provide extremely compelling evidence.
The University of Maryland study found that agile projects were 20 times more productive, had five times better cost and quality and had a 7 times earlier breakeven point. Furthermore, agile projects had an 11 times greater ROI, 11 times higher NPV, and a 13 times higher ROA when expressed as a percentage.
This research has been backed up by several private studies. Without doubt, the ROI on agile projects is compelling and an order of magnitude improvement over traditional methods.
The ROI of Enterprise Agility
Naturally, this has led companies to want to scale these benefits beyond single initiatives and reap the organisation-wide benefits. Who wouldn’t want significantly improved breakeven, ROI, time to market, quality and NPV – and the ability to change course as required!
At an organisational level, the ROI becomes harder to measure. This is because Enterprise Agility is about improving the entire system for all future outcomes, not just one specific project. In other words, this is a core infrastructure investment, and these types of investments take many years to pay off.
An investment in Enterprise Agility tends to yield the following benefits:
Customer engagement – putting the customer front and centre of our efforts and testing the validity of our assumptions by regularly releasing work and obtaining their feedback.
Better solutions - when complex problems are solved by interactive, cross-functional teams, the solutions tend to be more robust and of higher quality. This is because we have taken in many different perspectives on the problem – technical, sales, marketing, quality, commercial, operational, plus we have baked quality in from the outset and tested it every iteration.
Culture and engagement - the research on intrinsic motivation is compelling – when teams can shape the work and work in a self-directed way, engagement, creativity and productivity go through the roof.
Adaptability – the ability to continually adapt our strategic direction, based on evidence of what we see in front of us. Agile brings transparency and empirical data. We can use this focus on only what is important and limit having too much work in progress, thus creating the ability to pivot.
Value - When the above four benefits are combined, we can focus on only delivering what is of value to both the customer and our business. While this seems obvious, what is often overlooked is our ability to cull a significant number of features we assumed customers wanted. Research into feature usage shows customers often only use 25-50% of the features delivered. Imagine if you could cut your investment in features by 50%!
Reduced Total Cost of Ownership – TCO accounts for the lifetime cost of the product, including maintenance, enhancement, and support. In many cases, this accounts for 60-90% of TCO, making the development cost looking minimal. By only developing features customers care about, we can repurpose investment into more product places.
Market share – combining all the above effectively tends to result in increased market share and eventually market dominance if done well.
Clearly, these are all long-term investments in the infrastructure of our businesses, based on designing it for agility.
ROI on this sort of investment take years to measure, not months. But this doesn’t mean we shouldn’t measure it. On the contrary.
One useful approach for measuring the ROI of Agile is Evidence Based Management (EBM). Many organisations lose sight of the real goal of agile ways of working as they get stuck focusing on improving activities and outputs instead of business outcomes. Agile is a means to an end, not the end itself! EBM helps prevent this by focusing on the value delivered to the organisation from an investment in agile. This enables organizations to make rational, fact-based decisions, elevating conversations from preferences and opinions to empirical evidence, logic, and insight.
Otherwise, you may find the approach and the metrics as a useful way of considering how you are going to measure your Return on Investment in agile.
Good luck!
I recently attended a zoom meeting with my Toastmasters club — yup, online speeches and all — which was pretty fantastic. Some of us were sitting in their kitchen, some of us in their bedroom, someone outside with an amazing view in the background. While I was busy giving my first ever online speech, I had a realisation: all these backgrounds give a much more intimate view into a person’s life than I would have had a chance to get otherwise. Has this crisis made the workplace more human?
Safe to say that we are all online meeting pros by now. We have trialled what feels like a hundred different tools, we’ve optimised our home office set up as much as possible and we have all had our funny and embarrassing moments. I’ve seen children needing attention and curiously eyeing the camera while the person was trying to talk about a roadmap, pets “helping” with the meeting or hidden significant others who bring their loved ones a cup of tea or coffee while they whisper “Thank you” to the left of the screen. I have even seen people’s partners or roommates in their undies, squeezing past them, believing that they are out of the angle of the camera. In a weird way, these glimpses into a person’s private life, their home or even just of their weird favourite coffee mug, have made me see them in a different light. Even if I only see them on a screen, I have learned a little more about who they are (or might be) outside of work.
In his book “Reinventing Organisations”, Frederic Laloux talks about the concept of wholeness — bringing your whole self to work. Traditionally, the idea of bringing your whole self to work was not embraced by organisations. In an attempt to show up professionally, people have created a version of themselves, or a mask for themselves, that they wear to work. All other parts, that don’t fit in this professional image, were left at home, especially the part that shows vulnerability.
Now, while Laloux takes this concept as far as a spiritual level, the very unspiritual COVID-19 global crisis has forced many of us to be vulnerable and open with their co-workers and managers about challenges they currently face. With lockdowns in place, children at home or helping out others or the community, many of us have to juggle a busy ‘bubble’ life with working from home and getting stuff done. Uncertainty about the world after, job security or worries about the health of loved ones and friends are piling on the pressure. We simply don’t have a choice to not bring our whole selves to work anymore, because work-life and life outside work have started to blend.
However dramatic this sounds, finally, I have experienced a workplace where it is ok to log off at five to cook dinner for hungry children, where it is supported to go grocery shopping for the elderly parent to help them out and check in on them. People are encouraged to share their feelings, be vulnerable and ask for help. In fact, many meetings I attended over the past three weeks have started off with a check-in round to give everyone a chance to share what’s going on for them. And while I wish it would not have taken a pandemic to get to this point, I hope that we can learn from this experience. That, in a post-COVID-19 world, however it may look, we can continue to strengthen the human connection we forged during this time of crisis — over VC no less! — and bring our whole selves to work.
Nobody really saw COVID-19 coming. Most people thought it would be similar to previous virus outbreaks and peter out without any meaningful impact on our daily lives. As the situation unfolded, we struggled to fully grasp the exponential nature of it.
In the business world, we continually face sudden disruption shocks in a similar way. Our senses tell us things are changing incredibly quickly, but like the COVID-19 situation, we fail to grasp the exponential nature of the change, leaving us ill-prepared to cope when it inevitably arrives.
More and more organisations are realising they need to be designed to cope with constant change. This article aims to outline 6 key principles necessary to build such a business.
Structure
Decentralised Decision Making
Goals and Objectives
Execution
Alignment
Leadership
Structure
Most businesses are designed for efficiency, not adaptability. The underlying philosophy is to obtain the maximum yield for an acceptable effort and to scale this as effectively as possible. Last century’s Scientific Management is the key influence. Such businesses, by design, are not built to suddenly change course. They are designed to do key activities efficiently.
In contrast, a start-up is designed to be incredibly adaptable. It’s structure is fluid as it continually pivots to find the right product-market fit in order to survive. It is fast and nimble and can easy out-manoeuvre larger organisations, but it isn’t efficient and it can’t scale.
Companies that push through the start-up phase and scale bemoan the resulting bureaucracy and structure. The original ethos and culture of the start-up is lost as it grows.
Our clients want the benefits of both. They want the innovation, speed and agility of a start-up combined with the size and scale of a larger firm. Often they are facing some sort of disruption, hence they must be able to change direction quickly.
A business that has embraced Organisational Agility can achieve this, however it requires a profoundly different structure and operating model. It is typically structured as a collection of autonomous, adaptive units working together in unison towards a common objective. They have the scale to compete, yet the agility to suddenly change course to navigate around an obstacle without the cumbersome sluggishness of centralised control. They resemble a fleet of boats, each with a crew, a mission and autonomy to sail towards an agreed objective.
If new conditions emerge, they can change course accordingly, based on the conditions each of them currently face. For instance, say a pod of whales suddenly surfaces for air. Each boat can change course to sail around the whales based on the conditions they observe. Those close to the pod might rapidly tack starboard. Those further back might take a different course of action to avoid the traffic heading starboard.
Contrast that to how a large freight ship would cope. It would struggle to change course fast enough, and likely plough straight into the whales.
A firm is similar. If we are structured as a “fleet” of smaller, independent units (teams), and something suddenly appears out of nowhere, say a new competitor, a change in regulations or a global pandemic, we can change course quickly by distributing control to the independent teams.
Structure enables agility.
Decentralised Decision Making
If we are to structure ourselves this way, we clearly need to change how decisions are made.
In a traditional firm (the freighter), intelligence and decision making is centralised. Decisions are made at the “top” of the firm and supporting directives cascade to the people doing the tasks. When decisions need to be made, they must flow back up to the centralised control and then back down again. The delay directly prevents agility.
In an adaptive firm, authority is pushed to the people with the information. In other words, the people at the coalface are empowered to make appropriate decisions as required. If the decision requires others, they find the people required and attempt to make the decision as quickly as possible.
But if we empower teams to make their own decisions, isn’t it possible they head off in random directions? Absolutely, which is why the other principles are equally as important. Read on.
Goals and Objectives
To make sensible decisions, teams must understand the broader outcomes the organisation is aiming to achieve. To support this, teams undertake planning collectively to break down larger objectives into ones their team can effetely own.
"Stay home to save lives" is a clear goal (although lacks measures). Set by the NZ Government for the COVID-19 crisis, it is obvious what is being asked, but more importantly, why. It turns out "why" is deeply important to humans.
The goal doesn’t have to be perfect with answers for all contingencies, but it does need to be clear, explain why, and needs to be supported by the ability for people to clarify the goal. To turn the goal into an objective, it needs to include tangible measures.
OKR's have recently become a useful way of expressing objectives.
Objectives are memorable qualitative descriptions of what you want to achieve. Objectives should be short, inspirational and engaging. An Objective should motivate and challenge the team.
Key Results are a set of metrics that measure your progress towards the Objective. For each Objective, you should have a set of 2 to 5 Key Results. More than that and no one will remember them.
The reason objectives are important is that they enable better execution.
Execution
Traditional management is based on humans being analogous to machines, whereas Organisational Agility is designed to bring out the chaotic, messy, creative brilliance of humans.
To demonstrate, let’s contrast two different organisations - Traditional Company and Modern Company.
Traditional Company
Traditional Company uses traditional management techniques. The Executive Leadership Team (ELT) develop long-range strategies and the Senior Management Team (SMT) turn those into annual plans and budgets and manage execution.
Decision-making is centralised in two different forums – the ELT for things that impact strategy and the SMT for execution-level decision making. Each forum meets fortnightly.
The culture tends to value conformance, adherence to plan and outputs. People tend to be rewarded for either tenure or delivering work on time and under budget. People have managers who allocate tasks and give appraisals of performance.
Work is usually delivered via projects. Projects break work down into smaller chunks and assign tasks resources who are managed to execute. Sometimes, resources comment that they are unsure of why they are doing the work, by just get on with the job.
If a project needs to change direction, it has to submit a change request for either the SMT or ELT fortnightly meeting. This is quite an intimidating process to go through so is generally discouraged. Sometimes the ELT discover “watermelon projects” – projects that have status reports that indicate green (everything is fine) but the project is actually red on the inside (in trouble). These projects are terminated. Traditional Company estimates that on an average year it wastes $72M on either watermelon projects or projects that require additional funding.
Overall, people at Traditional Company reasonably happy, although staff mention they are worried about the new competitors springing up and how quickly customers jump ship given the chance. Customers also seem to be more informed than they used to, often demanding new products and services.
Modern Company
Modern Company has embraced organisational agility. The Executive Leadership Team develop long-range strategies and communicate these via outcomes they would like to see the firm achieve, expressed as OKRs.
Decision-making is pushed to as close to the people with the appropriate information as possible. Sometimes this means decision making at “tribe” level (a tribe being a collection of teams). Other times it means decisions are made by the teams themselves.
Modern Company has invested in developing its culture. It values delivering amazing customer experiences ahead of following the plan. This often requires staff to be creative. People work in teams, each with its own style of sub-culture. Across all teams though, there is a culture of constant feedback and growth. Everyone is aware of the growth areas and openly pursue opportunities to address them.
Teams obtain work as part of Modern Company’s quarterly planning sessions. They use a technique called Big Room Planning out of which comes their Team OKR for the quarter. They then break this down into a number of “Sprints” (two-week chunks) that deliver a piece of the OKR. They regularly review progress and discuss whether they need to change direction.
They’re less concerned about following plans. At first, managers were anxious about this, but when they saw the results of focusing on customer outcomes they relaxed.
They don’t have people managing them to execute, but they do have people who are dedicated to helping them learn and grow. Their key role is to help develop their competence.
Work is delivered by teams. Some teams are part of a larger group called a Tribe. Work exists in a backlog – a prioritised list of things required to achieve their OKR. Each Sprint, Teams select work from their backlog.
If Teams need to change course, they have the freedom to do so, as long as they remain committed to their OKR. If throughout the courses of their work they find the OKR needs to change, they immediately engage whoever they require to discuss and re-plan. They success based on customer value and business value delivered, not time and budget.
Overall, staff at Modern Company say they feel highly engaged. The company has a really eclectic mix of people, from analytical to creative. Staff often say they are excited about what opportunities future technologies will enable and what this might mean for their customers. Customers rate Modern Company highly, even participating in the development of new products and services.
As you can tell, these two companies execute very differently because they are designed and structured differently.
Alignment
When work is being done by many small, autonomous teams, it is easy for them to drift off in random directions. There are a number of techniques to keep teams aligned without reverting back to centralised control.
Daily alignment - a 15-minute daily meeting to inspect progress towards our goal(s) and adapt accordingly. This is an opportunity to get our heads out of the weeds to ensure we heading in the right direction.
Scrum of Scrums - a simple way for teams to keep across progress of other teams and order to avoid overlaps and dependencies. After each daily alignment meeting, 1-2 representatives of each team go to a Scrum of Scrums meeting and share progress, obstacles and challenges.
Sprint Reviews are open meetings anyone in the company can attend. Teams demonstrate tangible progress and obtain feedback. Sprint Reviews occur at the end of every single Sprint and are a powerful way for a team to ensure what it is delivering is both of value and aligned to the organisational objectives.
Big Room Planning is a way of all teams planning the next stage of the journey together. We take the outcomes of last period as input and together plan out what we, as a company, aim to achieve for the next quarter, including which teams will be working on what and whether they think it is achievable. It is a combination of top-down and bottom-up planning that includes teams involved. It typically results in significantly increased buy-in and engagement.
Leadership
Clearly, this type of firm requires different leadership. Thankfully, one of the most successful nuclear submarine commanders in history who ran his vessel this way wrote an outstanding book on how he achieved this and it’s enduring impacts, tried and tested in numerous mission-critical situations.
He shares three critical principles leaders must embrace to be successful with Organisational Agility:
Clarity on the objective and why it is important
Control - delegating control & decision making as much as is practical
Competence - if we are going to decentralise decision making then we need to ensure the people doing the work are technically competent to make the decisions they need to make.
We’ve covered Clarity in “Goals and Objectives” above and we’ve covered Control in “Decentralised Decision Making”, “Execution” and to some extend “Alignment”. If you are interested in diving deeper on these topics, I recommend David Marquet’s website and book.
Competency
Over the years I’ve worked with many firms who have attempted to apply the principles I have outlined in this article. In my experience, one of the key reasons they fail is that they give too much control without developing competency. You cant simply transition from one culture to another overnight and expect to succeed. Building competency in people is utterly vital.
Many of us have been raised based on traditional thinking. It was the underlying principle in our schooling and careers. To work in this way we have a significant amount of re-wiring to do, which takes time. Learning new ways of working is one thing. Applying them is another. It requires patience and support from people who know what they are doing and can guide you.
Our approach is to first give a small amount of control to uncover the gaps in competence and clarity. The step is small and calculated to uncover gaps. Competence is developed through training, mentoring and coaching. If the step is too big, chaos will ensue. Equally, developing a highly trained team without giving them control will result in frustrations and departures.
The idea is to instil a culture of leadership that gives others the opportunity to grow by inviting them to the next level. For example, if someone wants to be told what to do, the best response is to ask them what they think or see, and so on.
If you are interested in understanding this better, please contact us.
Conclusion
COVID-19 will change the world. All of us will learn from this situation and make our businesses more adaptable and responsive. This can be significantly accelerated through a fundamentally different system of work based on distributed intelligence.
Once you have stabilised, please don’t forget to invest in your organisation to help avoid learning lessons the hard and expensive way. Together, let’s build better businesses that progressively shape the world for good.
I love travelling and visiting different countries. Being born in Singapore, I am always fascinated when I travel back to visit family and friends at how much the country has changed and evolved in just a short period of time.
The picture below depicts how far Singapore has come as a small nation over the past 50 years, defying obstacles and constraints in order to become one of the most respected and wealthiest Asian countries in the world.
As human beings we have a bias for progress - take technology for example. It's not uncommon for new breakthroughs to be developed over many years without being accessible to the general public until many years later either due to cost, complexity, or simply feasibility.
The OLED (Organic Light Emitting Diodes) display is a really good example of technology that has fought for many years to surface to the top over other display technologies such as PLASMA, LED, CRT etc. In 1987, the world's first OLED paper was released by Kodak. I'm sure at the time when the first OLED paper was invented, I imagine that the excitement around future possibilities of this technology was buzzing around Kodak. However what is interesting is if you look at the journey of OLED over the next 30 years, its intriguing to see a few things happen.
Kodak are no longer the leaders of the technology
As OLED became more and more available mainstream, it became simpler and more accessible
It took 20 odd years before OLED was introduced to televisions
So what does this all have to do with Agile and its application to New Zealand businesses?
Having devoted the last 2 years to building Radically, a lot of my time has been spent on getting to know the challenges of New Zealand businesses, both large and small. The common pattern across most organisations is change. While the reasons and motivators might be different from organisation to organisation, most do fit in one of the categories below:
Margin at risk due to declining revenues, increased market competition and pressure on costs
A sudden boom in the organisation, requiring significant growth in order to meet demand in orders of magnitude of +200% growth
Industry profitability is declining, requiring a shift in strategy to innovate and diversify for future survival
In speaking to organisations, what I've found is that most know they need a step change, and that in their current form, they would not be successful. More and more organisations are realising that improving their ways of working in the form of culture, processes and practices is a way to overcome their challenge.
Organisations that journey down the path to shift in the way they work often look for a partner to diagnose and help them start. Just like when you visit your local GP for medical expertise, organisations that face these challenges look to consulting companies and individual experts to prescribe the right medication in order to get healthier. Unfortunately instead of becoming healthier, many of these organisations end up becoming more sick than when they started. Why is this?
From talking to businesses and their leaders, I've found that the help and advice they were given was focused on an idealism and a pursuit of an outcome which often has not been translated to suit the needs of their organisation. Even worse, when asked if prescriptions such as Agile can be tailored, they were labelled anti-agile or not-agile, leading to an assumed implication that having achieved agility means you have succeeded.
This type of approach often leads to organisation seeking to be Agile as an outcome, losing focus on their original symptom, which is to increase business performance, improve delivery, or build foundations to scale.
Unlike the OLED example, where technology was developed then modernised and simplified, many in the industry have failed to simplify and make Agile digestible for businesses to adopt. The impact of this is many organisations have become resistant because they are forced to make a binary decision - "are you Agile or not?". This often ends up taking organisations down the wrong path in pursuit of an outcome to comply to an "Agile way of working", rather than simply working better so that the business thrives. Whilst I understand in application things are more complex, my challenge is that as experts of change, it is our duty to wear our expertise lightly and make it easy for organisations to embrace better ways of working, rather than make the solution the only means.
I started off this thought piece with the idea of what might be beyond Agile. My challenge is as we look beyond, that we don't think deeper and more complex as the solution. In my experience most are still at the stage where they benefit from very simple principles such as
Embracing try and learn
Delivering in iterations
Structuring for intentful collaboration
Reflect and learn often
Many of us understand that these are inherently linked to Agile practices, however they do not have to be implemented by the book. Instead, at Radically we believe organisational benefits come from making these principles so simple and practical, that they can be applied across the entire organisation. This is what better ways of working means, as opposed to achieving some kind of agility index or being the very best follower of a practice like scrum, but failing to meet your business goals.
At Radically we strive every day to draw on our diverse teams expertise, such as:
Delivery Experts who have managed large complex waterfall programmes
Agile Coaches who have helped embed new mindset and practices in organisations
Business leaders who have set a vision and understand the realities of running a P&L
People & Culture practitioners who deeply understand people, psychology and the practices required to unlock high performance
Together we are a diverse group of people who believe in partnering with organisations large and small that who want to improve their ways of working. To do this we:
Make the complex simple
Draw on a diverse background of skills and experience
Focus on delivering clear business outcomes
If you've been considering how you can step change your business in 2020 and want a partner that has deep expertise with the ability to simplify the complex, feel free to get in touch with myself or one of the team.
Forward thinking firms are realising that in order to thrive in a world of uncertainty they need to fundamentally rethink themselves beyond the tactical “doing” mindset (processes, frameworks and methodologies), to an adaptive mindset, based on a culture of collaboration and a team-centered approach to problem solving.
Culture, HR, intrinsic motivation & emotional EQ are converging with agile, servant leadership, the growth mindset & customer empathy to fundamentally reshape what it means to be a modern organisation.
The winners in the current climate are not just embracing modern technology; they are fundamentally redeveloping their core DNA in order to detect new opportunities. And this change is increasingly being led as a culture-first initiative.
Much of the work we are currently doing is less about responding to a particular crisis, rather it is more focused on creating new capabilities to enable our clients to continually adapt and respond to almost any situation. We call this agility. In practical terms, what does this involve?
From years of working at the coal face of adopting agile ways of working, we have learned that a holistic approach radically increases your chances of success. We therefore approach it as two interrelated pieces – Business Design and Transformation, with the overlap, validation, playing a vital role in road-testing the change.
Business Design
Business Design is about designing the business to help it best achieve its strategy. It is vital, yet in our experience many organisations skip this and leap straight into “implementing agile”. The result is a transformation with no real substance, no compelling call to action, no North Star. And firms wonder why so many transformations fail!
At Radically we take a very pragmatic view:
First, understand the core strategy. What space does the firm play in? What unique combination of drivers enable it to win in this space?
Design an Operating Model that will enable this strategy, empowering and aligning all the key business functions towards the same outcome.
Get explicitly clear on the target culture required to achieve this. What does it look and feel like? What will leaders do to role model this? How do we reward and recognise people demonstrating the desired behaviours?
Review and align the Organisational Structure to support the above. If our Operating Model is strongly agile based, then a different org structure is often required. What does this look like and what changes are required to get there?
Ways of Working – clearly design how we will approach our work. What work should be approached with an agile model? What work should be delivered by a traditional model? How will these interact? Who will do what? How will we measure success of this?
Funding & Governance – an agile enterprise tends to adopt an experimental mindset, delivering quick iterations of value that can be quickly tested with customers, resulting in continual course correction. Traditional funding and governance models tends to focus on adherence to a fixed plan. So how should a more modern funding and governance model work?
Leadership – given the above, what should our approach to leadership look like? How will we live the values as behaviours each and every day?
Sadly, most agile transformations we have seen in New Zealand completely fail to consider these fundamental building blocks. Instead, they tend to take an “agile practitioner” approach, focusing on frameworks, methodologies and processes. In our experience, these firms are unlikely to achieve their desired business outcomes.
Transformation
Transformation is the art of moving the business to the new model.
This is when the ‘people aspect’ of change truly kicks in. If you think about what we are actually transforming, it is people and people are the trickiest part to change; processes and models are relatively easy. The human shift must be designed with a human-centred approach. We find that by taking a leadership and mentoring approach, our job is to guide all levels through the change and build the capability and mindset within the staff to be self-sustaining into the future.
Validation
In our experience, no design is perfect. There is low value in trying to design a perfect design as no such thing exists, and secondly it will change as you implement it through transformation. Transformation validates design, yet transformation without design is folly.
Conclusion
In summary, we urge you to take a strategic focus when embracing agility. Are all the pieces of the firm aligned to the same vision, model and approach? Are we all completely clear why we are doing this and what outcomes we want to achieve? If you can’t answer yes to these foundational questions then it is time to re-think what you are doing.
Don’t “go agile”. Instead, design your business for agility, break the cycle of failed transformation and realise the true benefits from your investment.
Many organisations are embracing agile ways of working in an attempt to build faster, more customer-focused and resilient organisations. They are redesigning themselves to create a culture where decision making is transitioned away from middle management towards those working with customers at the coal face. Ultimately, they seek engagement in order to create a culture where staff are empowered to truly delight customers. Autonomy is the critical ingredient; however, autonomy is often misunderstood. Many organisations think they just need to increase autonomy, however they forget to include the counter-balance of accountability, often with disastrous results.
Too Much Autonomy too Quickly
Recently, many senior leaders have shared with us a worrying concern. It is happening so much that it is becoming a pattern. They are telling us, often with hushed voices, that they feel they cannot ask important business questions such as “when do you think this will be done?” or “how is cost tracking?” or “will we hit our launch date?”. When they do ask these questions, they get proudly shunned and told that that these questions “aren’t agile”.
Perplexed, they feel stuck. Do they go back to their old ways and demand answers (which they know will be fabricated anyway)? Do they dare mess with the new agile culture and risk being seen as “a manager”, the evil conspirator who is secretly trying to stop agile and control everyone? Or do they try to manage the business without the vital information required to make decisions? The end result is managers on tip toes.
The problem is that they have increased autonomy without increasing accountability.
Empowerment
One firm wanted to increase autonomy by empowering their people to put forward initiatives that would be funded based on their ability to help deliver the strategy. The “how” (the execution of initiatives) would be entirely up to the proposer, giving the teams freedom and flexibility to focus on delivering the best outcome as the work progressed.
All sounds awesome right? Unfortunately, it wasn’t, as year after year they encountered the same problem: 9 months into the year they would run out of money and the entire organisation would then go into a capital freeze for the remainder of the financial year, causing significant disruption.
Why?
Firstly, those leading the initiatives were not being held accountable for actually delivering something of value. They were given a chuck of money at the beginning, based on forecast delivery of a business outcome. The intent was to give the teams autonomy, however without the counter-balance of accountability for how the investment was being spent, the teams failed to deliver.
The root cause was that they were still running a traditional governance model that didn’t understand agile. The teams weren’t being held to account to deliver “done” increments of value every iteration. This resulted in the illusion of progress (“we are doing iterations therefore we are be doing agile!”), however nothing could be shipped to the customer. The catch-up stabilisation and integration required a lot more budget.
The lesson – they decentralised decision making and control to provide autonomy but failed to establish the corresponding accountability. They went from centralised accountability, to no accountability at all.
Another firm wanted to embrace agile in order to build highly autonomous teams and attract the best talent in the market. They rapidly “delayered”, removing most middle-management positions and set the teams forth on a journey of self-organisation. Teams were taught new ways of communicating, sharing and collaborating. Each team had a facilitator – a servant leader who would help them teams as required.
Again – seems awesome doesn’t it? However, when the CEO asked how many more iterations would be required to deliver the release, she was shocked to find the teams had no idea. Nobody knew whether this was on track nor did they know cost to date and forecast completion cost. Again, they went from a small group of managers being accountable, to nobody being accountable in the new approach.
Cupcake Agile
Sadly, we often encounter this and the frustrating thing is that this is not (in our opinion) professional agile at all. One senior leader we talked to called it “Kindergarten Agile”, another “Cupcake Agile” and yet another “Jazz-hands Agile”. It is often the result of well-meaning people who simply lack the business acumen to understand the implications of changes they are suggesting. They recommend autonomous squads, that team have lots of fun and we will measure success by team happiness.
Balancing Autonomy with Accountability
Agile is based on transparency. When we have transparency, we can see what is going on change course accordingly. Accountability is very specific – in Scrum the Product Owner is accountable for value, the Team is accountable for delivering done increments and the Scrum Master accountable for the process.
Governance remains vitally important. It doesn’t disappear, it just changes, typically from a classical model where the focus is on schedule, scope, budget, quality and risk, towards a modern model that focuses on value, risk, learnings, and then the next optimal move.
Management remains important too. It doesn’t disappear. It just changes from a role that allocates work to people and then manages their progress, to a role that focuses on growing people, providing honest feedback and coaching them.
Business questions such as “when do you think this will be done?” or “how is cost tracking?” or “will we hit our launch date?” are completely fair and valid. The difference is that we are moving from a world where we pretended to be able to know all of this upfront and would lock it down in a plan and then govern to that plan regardless, to one where we accept we don’t know it all up front and instead forecast these factors and continually update the forecast as we progress, enabling regular changes in direction based on the information at hand.
Don’t accept Cupcake Agile. Yes, autonomy plays a critical role in reshaping our workplaces, but don’t forget to balance autonomy with accountability.
Connect
Subscribe
Keep up to date with all the latest happenings at Radically.
