Traditional companies are facing major challenges today from startups. traditionally they have been run on a top-down decision-making approach, keeping tight control over finances and a finely tuned supply chain. However, they are facing competition from every segment of business today.
- The new entrants come up with new products quickly which is likened by both customers and the sales channel.
- They encourage product trial to find better acceptance.
- They have faster delivery times and reduced storage in the channels.
All these require quick action, better coordination between organisational divisions and encouraging innovations.
For a company to be agile, delight customers and do better than the competition, it needs more than just agile teams. For a truly agile enterprise, the C-Suite leaders must embrace agile principles. We compare here the difference between agile teams and conventional executive committee and what agile means for senior executives day-to-day work.
Creating balance from top
The agile team creates profitable solutions to problems but the job of agile leadership is to build and operate an agile system. It does not mean replacing existing traditional systems everywhere. Agile is primarily for innovation and testing it involves compromising operating processes. Building an agile enterprise finding the right balance between standardising operations to pursuing innovations. If you pay insufficient attention to operations quality slips and costs rise. If you do not pay sufficient attention to innovation, the product offering becomes routine and unable to adapt to the changing environment.
In a large company, this balance is difficult to maintain. There is no set formula to find the right balance. To find the right balance, the agile leadership evaluates how agile the company is at present, how agile it should be and the constraints impeding its progress. Surveys of stakeholders combined with objective measures would be useful in determining the existing state. The agile leadership team then develops a list of activities for achieving an optimal balance. It forces the leaders to work together as a group and create an operating system for agile leadership.
The agile leadership team
Typically, the agile leadership team includes most of the executive committee members or at least the CEO and individuals most critical to the organisation.
None of the members can give 100% of their time to this initiative. Executives have to play multiple roles. They have to contribute and manage the agile enterprise system and at the same time oversee the business units to ensure they are run reliably and efficiently. they must serve as mentors, coaches and decision-makers. They should keep the agile values and principles in mind but they do not organise into formal agile teams.
The time problem
Asking senior leaders who are already fully involved in their responsibilities would be taking one too many tasks. Executives begin to understand their time is better invested in developing cross-functional innovations, a task other operating managers are not equipped to handle.
Gradually as the agile transition takes root, leaders start spending more time on strategy and less on operations management.
Agile ways of leading
Senior leaders of a company know a lot and brim with confidence. This can turn into a liability in an agile environment. Agile requires humility from leaders, a quality that accelerates learning and boosts the confidence of every team member. They should help build rapid feedback loops to ensure initiatives stay on track. they should view their job as helping team members learn and take responsibility.
Rapid feedback everywhere: Agile innovation teams use short sprints and daily standup meetings to create feedback loops to resolve impediments to progress as quickly as possible. By meeting every day to make decisions is essential to avoid confusing guidance. This speeds up decision making.
From commanding to coaching: Leaders need to change their ways of working. Take feedback from the team members and realise they need to change their attitude and behaviour. Use positive, collaborative language and engage in two way communication instead of one-way diktat.
From meetings to work sessions: Eliminate unnecessary meetings and change it to problem-solving sessions. Solve the issues and resolve the barriers to decision making. Address the problems by describing options, evaluating trade-offs recommend preferred option, communicate explicit action item for each member.
Agile teams may cite leadership and culture as barriers to scaling of agile across organisations. But most leaders are not fighting agile. they have not understood how to perform their roles in ways that enhance agility.
Agile leadership requires that executives create a balanced system that delivers both stability and agility. It views it as a continuous improvement program. Going too slowly may fail to achieve escape velocity and going too fast will create chaos. Hence it is necessary to sequence and balance all the components and appreciate that how they make decisions will be as important as decisions themselves. These factors improve business results, unleash the potential of employees and enhance their job satisfaction.
by Darrell K. Rigby, Sarah Elk and Steve Berez
HBR 2020/05-06
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