Leadership support for becoming an agile organisation

Join Murray Robinson and Shane Gibson in a no-nonsense Agile discussion. In this episode, we talk about leadership support for agile ways of working. Why leadership support is critical for change. Why some leaders support agility and others secretly undermine it. How agile is being sold as a miracle cure by big consulting companies. And why agile is rolled back by authoritarian leaders with a factory mindset. How executives can learn what agile really means by working with agile coaches. Why servant leadership is the key to agility. And how you can change your culture rapidly by changing who makes decisions about what.


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Podcast Transcript

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Shane: Welcome to the No Nonsense Agile podcast. I’m Shane Gibson.

Murray: And I’m Murray Robinson.

Shane: Hey Murray, I think today we are gonna talk about business agility and why senior executives don’t support the move to an agile way of working

Murray: Yeah, so Agile, lean, and design thinking are very popular these days, and everybody’s saying they’re doing it. Executives talk about it and they hire the big consulting firms to help implement it. But in practice, many executives put up bureaucratic barriers that prevent their organizations from becoming agile. So there’s a lot of agile in name only. Have you seen this?

Shane: Yeah, so I’ve never been lucky enough to go into an organization that’s doing agile from the top. I’ve always gone in at a team or a department level. There’s been a number of times where I have been brought in to help a forward thinking executive. So they have either seen this thing called Agile and said to their teams, Hey, this looks like an interesting thing. Should we experiment with it? Or more often somebody in their team who’s at a senior level goes to them, look, we think this new way of working is gonna have some benefits for us. Are we allowed to have a go? And they’ve said yes. And then as the teams start to experiment, they realize that having some coaching may be useful and the executive sponsors the cost or the permission to go do that work. So I’ve seen that a few times and those are the engagements I like, because we have somebody senior hold an umbrella above the team and give them time to learn. 

I’ve worked in other organizations where I’ve come in at a team or a department level, and we don’t have that senior sponsorship. And we’re constantly fighting a regard action of why we are doing this weird and wonderful way of working. Why aren’t we just writing six months worth of requirements documents. What I don’t know is why are those forward thinking exec’s willing to take the risk to see if Agile works for them. And why are so many executives not willing to.

Murray: Yeah, so I have been an exec. I was a general manager at a mid-size digital agency . And that organization went agile because it had got itself into some serious trouble financially . Its projects were losing a lot of money and its clients were unhappy.

I know of one organization where the CEO was running their digital startup arm and he was brought up in this agile, fast iterative approach. And then they made him CEO of this 600 person organization and he just adopted it and got some coaches in to help. He was put in charge because they’d got into themselves into a lot of trouble with not, getting the revenue that they were expecting.

Shane: Interesting thing there is that compelling event, organizations have to make change, then maybe execs are more open to trying an agile approach because they have to do something different.

I’ve always wondered with the senior people I’ve worked with where their teams have had success adopting an agile way of working. If they changed organization, would they do it again? And so from what you’ve said, the digital and person had been through it before, was convinced it was a way that was successful and therefore, adopted it from the top because why wouldn’t you? But I do wonder if there’s any, interesting stats out there about how many times people do it more than once.

Murray: Yeah, I’ve seen Agile rolled back a few times actually. It’s always been because there’s been a change of leadership and the new leader coming in, is, a traditional person who believes in big design and big plan upfront and wants everybody to do what they’re told. It doesn’t mean that they’re old it’s just somebody with that mindset. It’s tends to be a a macho thing.

Shane: How those execs make that decision? Are they going to the shiny suit consulting companies and drinking the koolaid that digital transformation is the way to go? Or do you think they have cohorts of other executives that they trust who have said, Hey, we’ve tried this thing and it seems to be working for us?

Murray: So the thing about being an executive is that you’re in an extremely political environment. It’s hard usually to tell, what caused what. There are a lot of people claiming success for things that other people did and there’s also a lot of people blaming other people for things. There’s people in there who are really, terrific people, honest, open, caring, compassionate, straightforward people.

They tend not to do as well as the people who are very political. I’ve seen of executives get on board with Agile because it’s the new shiny thing and they think that it’s gonna be good for their careers and they’re gonna get promoted. There are people who believe in it and have seen that’s really valuable. Others will just discard it as soon as the next shiny thing comes along or if it’s too difficult. 

When I was in a senior management position, I could see it was gonna solve a lot of problems, but a lot of people are doing it just because it sounds good. The thing today is to say that you’re doing agile. They get in the big management consulting firms to tell them what to do. And the big management consulting firms don’t how to do it either. 

Shane: So I’ve definitely seen that political environment. The corporate gladiatorial coliseum, where you either win or you lose, and if you lose you, go look for another job. And so that’s why, I have utmost respect for the senior people that have sponsored me to go in and help their teams do this experiment. To trial changing the way they work. I don’t believe they would take the risk without actually having a good understanding of what agile is. They’re not cowboys. They don’t shoot from the hip, most of them. They would’ve done some research, considered it and said, Hey, it’s worth taking the risk because it looks like the rewards for the organization and themselves is there.

In your experience, if you’re an exec who has just seen this word agile in the latest email from the management consulting company. What do they need to know? I’m assuming sending them on an Agile Scrum 1 0 1 course is probably not probably, for them, it’s probably not the right level of content. In your experience, what does an exec need to know about agile.

Murray: So somebody who is already a servant leader, is gonna find agile fits well with them and their way of doing things and trusting teams. So they then need to focus on, restructuring into product teams and, improving their processes with lean and taking a agile approach to projects.

People like that, could be helped by getting in trainers and coaches. You can’t really learn this stuff just by doing a two day course. You can get an intro to it, but you really then need experienced people to help you because there’s quite a lot of change. Agile challenges the factory model. So most organizations are set up. Like a Ford factory where you’ve got, a function that does something in a very specialized way, and they do it efficiently and then they pass it to the next function who do their bit, and eventually a car pops out at the end. That’s very efficient when you’re building the same thing over and over again. It doesn’t work when you’re trying to do anything new. 

In my experience managers just don’t understand that. They’ve been brought up in this factory model and this factory mindset. And they just really don’t understand how different you have to work if you’re going to be developing products or software. So they need experts to come in and help them, and they probably need some new leaders as well.

Shane: Yeah, and I think it’s important to differentiate between people who manage teams and. people who manage companies. If I was having a conversation with a manager of a team, the things I would tell them about Agile that I think they should know would be different to what I think I would tell an exec.

Part of it is telling them what the hell is this agile thing? Part of it is why should they take the risk and actually let their team have a go. But more importantly, I would want to tell them what’s likely to happen so they could then think about it and manage the political risk of that’s happening.

If I was having a conversation with a manager of a team, I would say, The team will start to self-organize over time. So all the things that you do, which look like that factory process they’re gonna disappear. You’re gonna end up doing something else. The team are gonna start start working really, really well, and then they’re gonna start being constrained by other teams. They’re gonna be reliant on them, and those teams aren’t gonna deliver in time. So you’ll need to start focusing on unblocking or bringing those skills from those teams into your team, so you’re an end to end product team.

Murray: Yeah, but you are talking about middle-level managers there. 

Shane: So if I talk to the exec, I would say to them that after six to nine months, your team are gonna be so successful every other exec’s gonna want your team doing something for them for free because they need stuff done. And your team’s now being recognized as the one team that can get shit done. 

Murray: I still think you’re talking middle management level, Shane. I know two examples of executives of, a bank in a telco who did an agile transformation, and I’ve talked to some of the consultants and coaches who were in there. And they told me why they did it and how. So in both these cases the CEOs were under a lot of pressure to increase profit from their shareholders and boards and they were really struggling to do it. And one of the big three management consulting firms, McKinsey, Bain, BCG told them that they had helped ING Bank cut their costs by 25% and drastically increased their profits by implementing Agile.

Because Agile is more efficient. It requires less managers. And so you can just fire 25% of your managers and 25% of your staff and all go to the bottom line and you’ll make a big profit. The consulting firms say they’ve got a big playbook. They’ve done it all before. They have the structures and processes and international experts. So bring them in for $12,000 a day per person. And, they’ll reorganize your organization into an agile one using the Spotify model and safe. It’ll be lots of secret meetings and secret rooms. And they’ll come up with a new organizational structure and work out who’s gonna make the cut to the new one. And they’ll manage all that for you. And then they’ll implement a big bang transformation. and there’ll be lots of Videos and PowerPoint packs to persuade people.

And then bang you’ve, doubled or tripled your profit overnight. And the executives have signed up for it on the basis that if they get half of what was promised, it’ll still be really good.

Shane: Yeah, it’ll be good for the profit, it won’t be good for the people who have been change managed in yet another restructure. 

Murray: This is the way, executives think. It’s about how do they deal with , the pressures on them from their shareholders. Executives do want their people to be happy and they want to produce good products and they want their customers to be happy. But that’s all after making a profit. 

Shane: Okay, so what you’re saying though is that if an executive is interested in Agile and they’re talking to the big three, they’re not getting the, what is Agile and they’re not getting the, what does Agile mean to you? They’re just getting the why, they’re getting, if you do this agile thing, these are the benefits for you go forth and conquer.

Murray: Yeah. It’s like a black box. 

Shane: Right. And that’s part of the problem. I would say to an executive, as your teams change, you can no longer budget and plan the way you used to.

Murray: The management consulting firm is changing their budgeting process as well. So , when they do this they’ll change the budgeting process to go to quarterly budgeting, for example. They are coaching and training the execs. They’re restructuring the organization. They’re defining new roles and responsibilities. They’re doing change management. Usually they have one agile person who knows what they’re doing, and then a whole lot of young people following a playbook.

These execs are actually really smart people. And so they will learn about it and they’ll buy a book and read about it. Cause they know this is the new thing and they gotta be on board. So they’ll all be enthusiastically on board with it. But what’s driving it is the profit outcomes that they expect.

So it’s being sold as increased profit by improving efficiency and also, become more innovative and much faster, like Amazon. The thing is though the, CEO and the next layer down are keen on getting these profit benefits and cost savings that we’re talking about. But after that, everybody else, and even some of the executive team are just, going with the political climate. So they’ll be enthusiastic about it, but at the same time, they’ll be trying very hard to defend their territory. So there’s a lot of saying A and doing B. They’re defending their territory or they’re trying to grab some new territory.

Shane: If I walked into one of those organizations and I worked with one of their teams, would I have the perception that it has business agility, that the organization is behaving in an agile way, not just a team. 

Murray: You’d certainly see a lot of packs and videos saying that. 

Shane: We had one of those organizations help one of our telecommunication companies in New Zealand. I wasn’t involved but my understanding is around about six levels of middle management were removed outta that organization. I’ve seen a lot where middle management get removed, but the people doing those roles automatically become product owner. So we move the slippers, we don’t change them. But in this case they removed a large number of people outta that organization from those roles. 

Murray: Well, they have a target they have to meet for reducing the number of managers. So, that’s what they’ll do. 

Shane: Okay so let’s park the big three coming in and , doing the old restructure to reduce headcount, to save money and using the Agile brand as their excuse. Whereas I seem to remember ones where we used to do time and motion studies. 

Murray: Yeah, it used to be business process re-engineering, total quality management. Lean Six Sigma. 

Shane: But if I’m an exec in an organization that either has a problem that I need to solve. I’ve heard about this thing called Agile, and I think it has legs that may make, the organization better and potentially save some money or do things faster. Where do they go to understand what this thing is? There’s no agile MBA 

Murray: You can do an entrepreneurial mba, which I think they talk about lean startup and things like that in there. 

Shane: Yeah, but where do those execs go to understand what Agile is, why they should do it, and what it means for them if they start to go down that path?

Murray: They could come and talk to people like me, Shane. 

Shane: Yeah. I’ve seen consulting companies use the two day safe course as a way of educating an exec. And I always struggled with that because it gets into the weeds a lot. Some of the execs I talked to about it said it was great, they got ammersed. They learned lots of jargon, saw the big picture and that made sense to them cuz there were lots of boxes and lots of lines and it fitted how the organization work now. And then they went back to their desks and, fought the next fire. 

Murray: What they should do is get a bunch of very experienced agile coaches to come in and help them. But they tend not to do that. They go for the big brand names.

But, you should start with going on a short course on Agile for executives. They’ll teach you the basics in a forum with other senior managers that’s not gonna be embarrassing for you. And then you need to hire and engage people who know what they’re doing, to work with you at a senior level.

Shane: My view is you should only bring in contract or consulting Agile coaches if you’ve already created a small agile coaching team and you need to upskill them. That actually the agile way of working is a lifestyle. It’s gonna carry on forever, and you’re always gonna need coaches and sometimes , getting experienced coaches who are wanting to be permanent for an organization is hard. So we have value when we go in and help those organizations. But one of the goals we should be given is to make some other people as good as us in that organization, so we can leave and go help the next one. And they’ve now got a sustainable way of coaching within their organization.

Murray: Sure and organizations should start small, prove that it works, do some experimentation and scale up the things that work in an evolutionary and exponential way, doubling the teams that are doing it. Use Agile to implement Agile. 

Shane: So that’s a good point. And once their team’s really successful they should help another exec implement what they’ve done. To expand out that way of working across the organization. And that will require the first execs team to support the other teams. Cause it’s all new to them. If we want the organization to change we have to start seeding that behavior across the organization. And by being first, you’re effectively gonna wear the cost and effort of helping, cause you can’t let them go and do it on their own. Cuz you’ve learned so much. Why would you let another part of the organization, learn all the same mistakes you learn if you could help them do it a little bit quicker and a little bit better.

Murray: Yeah. Business Agility is not about implementing Scrum at the team level. It’s about quite a large change to your basic assumptions about business and organizations. So I said it’s a move from a factory mindset to a much more of an exploratory mindset. 

A lot of people will say that they’re having trouble with Agile because of the culture of the organization. If you look at the surveys, they say that culture is the biggest thing. We don’t do this here, it’s not supporting us. But culture is not something you can change directly. Culture is a result of management behavior. Cuz managers reward some things and punish others and then everybody follows it. And that creates your culture. So in order to get a supportive environment you need to get your executives and your managers to change their behavior. And that’s only going to happen if there’s a change to the structure and what the executives reward and how they’re rewarded as well. 

Shane: When you have a team that’s working together and they all have their salaries and bonuses. What the hell do you do? Because most of those financial structures are based around individuals, not around teams. So how do you change the compensation structure to be more team-based to match what we’re asking ’em to do? And the same with execs, how do you change the executives compensation structure to support this new way of working across the organization, not just focusing on their group being really successful, so they get their bonus.

Murray: Look, executives are people who have been promoted multiple times, so they are good at being promoted. It doesn’t have to mean being capable of whatever you’re being asked to do at the moment. There’s the old Peter principle of people getting promoted up to the point where they’re incompetent. But I would say they actually usually get promoted a couple of levels beyond that if they’re good enough with the people and political side of things.

Gotta be something in it for the executives. How can they do well in the organization? How can they gain personally? You’ve got people who have built up a functional empire in design for an example, or architecture or sales. They’ve been focused on getting more budget, more staff, more influence cause they’re great at design, and now you are saying to them design is gonna be distributed amongst all these product teams. They’re gonna find that threatening and they’re gonna say yeah, love it. And then try and do everything they can to stop it. So you’ve got to find some way of showing them what they’re gonna get out of it. That they’re going to get new responsibilities, which are going to be as important as their previous ones.

Shane: So we come back to the point you made earlier, though there are people who behave like servant leaders. That’s a natural way of working. They are the best execs I’ve ever worked with allowing their teams to experiment and they still seem to get promoted because their teams do such a good job, get stuff done. The success goes up to those execs and they tend to get the next role or the next level of responsibility that comes. There are other people who don’t behave that way. What should we call them? What’s the anti-patent for a servant leader? 

Murray: I’d call them a politician. 

Shane: So a political leader. Where they focus on looking good. Do we think politicians are command and control? Maybe we got three servant leader, political leader, and a command and control leader. 

Murray: Maybe there’s the politicians, the authoritarian leaders and there’s servant leaders and there’s bureaucrats. I would say

Shane: Yeah, I’d probably put the bureaucrats in the authoritarian, 

Murray: I’ve worked with quite a few bureaucrats who are really nice and easygoing but they’re focused on stability process and harmony.

Shane: Okay. So we’re saying that if the exec behaves like a servant leader, where boots are all helping them because they want to understand, they want to see how that helps their team and their organization and they’ll support everybody as much as they can. What about the other three?

Do we just say, nah, they’re done for, they’ll eventually die out. I don’t think they will. I think you said actually age doesn’t infer agility. When we were going through school, I was being taught factory processes. I know the education system’s changed, but I don’t think it’s changed that much, are we teaching the young people of today anything around servant leadership and agility and changing ways of working? I’m not convinced we are, or maybe not in my country.

Murray: I think leaders are made not born. I think that maybe 25% of managers are actually this type of servant leader. And I think that there’s quite a lot of people who are capable of changing. So when I think about my own experience, when I was a project manager, before I really got into Agile, I think I was quite authoritarian at times, because the organization said to me, you are responsible. You must make this happen no matter what. And then I took on that responsibility and was trying to make it happen, but I actually couldn’t because the work was being done by other people. But I learnt to let go and share my responsibility with the team. 

I think there’s a lot of managers who are frustrated with the way that management is being done today and are capable of learning servant leadership. And once they’ve done it, they discover that it’s wonderful and they wanna keep doing it. But there’s also a lot of people who don’t. So I’ve met scrum masters who are actually authoritarian command and control project managers who are now calling themselves scrum master slash project manager, and just behaving exactly the same way as they were before.

Shane: So I think this idea that we’ve got servant leaders, authoritarian leaders, political leaders, and bureaucratic leaders, that when they show an interest in Agile for their organization, then we probably need to tailor the conversation. The way we describe what it is, the way we describe why they might want to do it and way we describe what it actually is gonna mean for them over the next period of time should probably be tailored based on that personality style.

Murray: I think what really happens is that a leader in a senior role says, I wanna do this new approach cause it fits with them. And then they have a whole lot of other people underneath them who start to fall in line with the new direction. So I think you’ve got an opportunity then to go and encourage good behaviors and to challenge people’s assumptions and to train people.

You can change the structure and cause changes in behavior. So Daniel Mezick who runs Open Space Agility says that you can change the way an organization works within three days by changing. Who is allowed to make the decisions about what? So once you do that the culture will change. So, if you change who has the right to make decisions about things, which happens through a change in structure, to change in roles and responsibilities you can make really big changes in the way people behave, and then beliefs tends to follow behavior. 

Shane: Makes sense to me, but I’d wanna see it in practice. 

Murray: I think the researchers show that beliefs are about helping you to fit in and do well in the environment you are in. And so if the environment changes and you need a different sort of behavior to do well, then people will start behaving differently. And then their values and assumptions and beliefs will follow as they experience a new way.

Shane: Yeah, and I’ve seen that with teams. I’ll often go and help a team and there are some people on the team who don’t believe that this thing’s gonna be successful and their point of view is fear. They’ve potentially been agile before with daily standups or, they come from a fairly structured background and this is all mumbo jumbo to them. But as the team changes the way they make decisions, as they change the way they work, I’ve seen those people change their behavior and their beliefs as well. 

Murray: Some people won’t change but they’re a minority 

Shane: Yeah. And some people vote themselves off the island. And that’s fair, it’s not for everybody. And that’s okay. So I think closing out, I’m gonna keep working with teams and departmental people because the politics at that exec level where Agile’s been used to cut 25% of the cost to get profit sucks.

I think I’m gonna look at the leaders a little bit differently around those classifications of servant leader, politician, authoritarian and bureaucrat and try to make sure I work with the servant leaders cuz they’re just cool people and they help the teams be successful. And keep an idea that the exec’s taking a risk if they’re sponsoring a change

Murray: If you are the servant leader coming in as an exec and trying to implement this change you are taking a risk, which, has great rewards, it would be easier not to change anything, wouldn’t it?

Shane: Yeah, sometimes. So what about you? What’s your takeaways from why execs often don’t get it?

Murray: They don’t get it? cuz they don’t want to, cuz they’re afraid of losing power basically. I find that problems with agility are really not due to what’s going on at the team level. Teams take up agile ways of working quickly and easily cuz they can see it helps them. The blockers to being agile in the organization are all coming from management, some of whom are on board and some of whom are pretending to be on board but will undermine you and others who are against it. 

Really to become a successful agile organization, you need strong support from your leadership. Cause it’s a big change. You might say? Why would they even do it? 

And what I think is happening is that organizations who are innovative, fast and efficient, because they’re using new ways of doing things, are just out competing the old organizations. People are doing this cuz they see that Apple, Amazon, Google, Spotify, are all doing things differently and being very successful.

And I think the organizations that don’t or are just doing it, but paying lip service are just slowly declining. They’re so big. They’ve got so much money that they don’t decline overnight, but they just slowly decline away, losing market share, losing profit. And if you wanna be part of the future, I think , you have to try and become a more agile organization throughout.

Shane: Yeah, and if you want to lead the charge, be a servant leader because then lots of people will jump on board and help you be successful cuz those are the people that make it successful and the people we wanna work with.

Murray: Yeah, and I think that there’s actually a burning need for change in these organizations. Plenty of people recognize that the organization is quite dysfunctional, even the ones that appear successful on the surface. And a lot of people really want to improve the way things work and a lot of those people are in management. There’s a need for a change. The bush is dry, and if you light a match, change will take off. Cause people want it.

Shane: All right, well I think we’ll close it out there. It’s been a good chat and, we’ll catch you next time.

Murray: All right. Thanks Shane.