Slow Agile: The Business Agility Stumbling Blocks
How to Turn Stumbling Blocks Into Stepping Stones for the Agile Transformation
This is the third part of a series of four exploring an organization’s transition through the business agility transformation process. Please read the second part: Slow Agile: Cracking the Business Agility Nut.
Agile-based approaches have been used successfully to change Business Processes, which are complicated challenges. In contrast, they have yet to solve complex challenges like transforming Leadership Practices and Organizational Culture. Furthermore, looking at the challenges businesses face in today´s complex world, we realize that “agility as usual” won’t consistently do the job needed to achieve Business Agility “from strategy to execution and enterprise-wide.”
A Triad of Stumbling Blocks
In the first part of this series of articles, we saw that Business Agility transformations are processes that involve traveling a complex journey, making choices that require conscious leadership, deliberate action, resource allocation, and the commitment of the whole organization to embrace agility from strategy to execution, and enterprise-wide.
We have also seen the rewards companies obtain when they make successful Business Agility transformations, evidenced by the differences in returns that separate Leaders from Laggards. More importantly, two factors have been identified as the stumbling blocks for Laggards to becoming Agile Leaders — Leadership and Culture. The Laggards’ leaders explicitly say, “We are not Agile in both strategy and execution,” and “culture is an obstacle to achieving agility.”
Leadership, Culture, and Complexity form the triad of stumbling blocks that get in the way of a BA transformation. We will dig deeper into them so that you can turn those stumbling blocks into the stepping stones you need to achieve a successful Business Agility transformation in your organization.
Stumbling Block #1: Complexity
Organizations are Complex Adaptive Systems (CAS) that operate in a complex environment full of emerging disruptions — in my article, Leading In Complex Times. From VUCA to Complexity, I argued that we do not live in a VUCA world (Variable, Uncertain, Complex, and Ambiguous) but in a Complex one because the V, the U, and the A are characteristics of and are contained in the C. To understand Complexity, we need to know what Complex Adaptive Systems (CAS) are. Dr. Joanna Boehnert identifies, defines, and illustrates up to 16 critical features of CAS. For simplicity’s sake, let’s mention five to understand what the business world is against Heterogeneity, Feedback, Evolution, Interaction, and Emergence.
- Heterogeneity. Systems are composed of different agents that produce different outputs.
- Those output Feedback into the system, in some cases with disproportionate results. For instance: A bat bites a pangolin, someone buys it at a street market in Wuhan, China, and starts a pandemic that kills millions of people and disrupts life worldwide.
- The outputs and their effects Evolve and Interact with each other, producing new and unexpected results in what is called Emergence. Does the Covid-19 Omicron variant ring a bell?
In Complex Adaptive Systems, the whole is more than the sum of the parts. Thus, it is impossible to analyze, change and intervene in any CAS by considering its components as separate. Nevertheless, in society, as in business, for various reasons, most leaders keep looking at the parts of CAS as if they were independent of each other, calling them “problems to be solved.”
“Managers are not confronted with problems independent of each other, but with dynamic situations that consist of complex systems of changing problems that interact with each other. I call such situations messes. . . Managers do not solve problems; they manage messes.” Russell Ackoff.
Managers find it convenient to change Business Processes with Agile tools because they work well in Complicated challenges. David Benjamin states, “Complicated challenges have straight-line, step-by-step solutions that experts can implement with the necessary skills and experience. For complicated challenges, you can either solve them on your own if you happen to have them or find someone who does and have them do for you what they’ve done for others many times before. You would generally refer to a complicated challenge as ‘technical’”.
Most change efforts in business begin with Business Processes, where Agile teams work iteratively and incrementally, using any of the different Agile approaches to take care of the complicated challenges brought about by that change.
Managers stop solving problems and begin managing messes when they try to change the company’s Corporate Culture and Leadership practices the way they did with the Business Processes. Here is why.
The Other Stumbling Blocks: Leadership practices and Corporate Culture
According to the Agile Alliance, Leadership practices and Corporate Culture are four of the eight leading causes of failed Agile projects:
#2) Company Philosophy or Culture at Odds with Core Agile Values.
#3) Lack of Management Support.
#5) Lack of Support for Cultural Transition.
#7) Unwillingness of Team to Follow Agile.
When the organization tries to impulse the changed Business Processes through the current structure, or when they try to change it to let the new processes flow more efficiently, they generally use the same methods and tools that worked so well before, this time to change their Corporate Culture and Leadership practices. Complexity-wise, that is when the change processes stop being complicated and become complex.
David Benjamin states, “Complex challenges, on the other hand, are creative, with many seemingly unpredictable and interconnected moving parts. They are often confounding head-scratchers without a clear, straight-line path to a solution, and you can only know that you’ve found an effective strategy once it works. New solutions are needed each time you encounter a complex challenge.”
Leadership practices
Looking at the Iceberg Model of Systems Thinking above, we can see that most business decisions have a Reactive quality because they intend to solve the problems caused by the disruptions that manifest at the Events level, which is the 10% of the iceberg that is visible. The other 90% lies below the surface, where the events that appear over the surface originate. The part of the iceberg that some leaders don´t see sank the Titanic and caused the failure of many Business Agility transformations. That’s what Otto Scharmer, Senior Lecturer at MIT, calls The Blind Spot of Leadership.
We are blind to the deeper dimension of leadership and transformational change. Otto Scharmer
We live in a new reality that, as time goes by, shows growing levels of uncertainty and complexity; therefore, leaders need to Generate a new Vision that allows them to dive below the surface and make decisions at the level that requires their intervention. Great leaders are capable of adapting their awareness to the level needed. Specifically, they can address their blind spots by being their observers. They have a built-in Reflective feedback capacity that allows them to change and adapt their Mental Models to enact the Future they intend to create.
Corporate Culture
To embrace agility from strategy to execution and enterprise-wide, organizations need new structures, where command and control organizational systems give way to agile, cross-functional teams that now have the authority to make decisions that used to be at the managerial level. And so on. Nevertheless, if organizations don’t face this process consciously and carefully, it will backfire on any companywide transformation effort. The question is not the What but the How. My point is that organizations should not use to transform the Corporate Culture, the methods, and tools they employ to change their Business Processes successfully.
Agile-based approaches “hack the culture”; they do not transform it.
Cultural hacking works well in companies that are already agile, like Google. However, companies in the process of cultural transformation must win the hearts and minds of those whose organization and relationships weave the fabric that makes up the Corporate Culture. When taken out of context as a copy-paste solution in transforming companies, those hacks will only scratch the surface and may easily backfire.
Peter Drucker thought about this type of strategy when he stated,
“Culture eats strategy for breakfast .”
Triple Cultural Challenge Ahead: Cultural Transformation, Reskilling, “The Great Resignation”
I don´t think that I am exaggerating when I say that the future of most organizations will be decided by how they solve the triple cultural challenge they are facing now:
- The complex challenge of transforming their Corporate Culture to be more agile.
- The reskilling of their employees to do the job required by the digitalization of their businesses.
- And to make matters more challenging, they must face and find viable solutions to “The Great Resignation.”
Matt Parker says in his book “A Radical Enterprise..” “For the first time in history, a vast cross-section of workers are leaving the workforce en masse, leading the American economy to face an unprecedented crisis of voluntary unemployment that economists have dubbed ‘The Great Resignation.’”
Covid-19 has rewritten many ways to conduct our lives and do business. But there is a change about which not everyone is aware and whose massive scale has no precedent — the need to reskill the human resources of every type of organization out there. According to the World Economic Forum, 50% of the workforce must be reskilled by 2025.
“The Forum estimates that by 2025, 85 million jobs may be displaced by a shift in the division of labor between humans and machines. But even more jobs — 97 million — may emerge more adapted to the new division of labor between humans, machines, and algorithms.”
The WEF predicts that from the top ten skills required by the workforce in 2020, only Complex Problem Solving, Critical Thinking, and Analysis will remain in 2025, but they are not as critical as they used to be. By 2025, people must have Analytical Thinking and Innovation, and Active Learning and Learning Strategies to adapt to the new division of labor between humans, machines, and algorithms.
Of the ten top skills, eight are people´s skills, not technical, as one would have supposed them to be.
The Cost of Stumbling
To survive and thrive under these complex conditions, the whole organization must be involved in the change process to reach the coveted Business Agility. Nevertheless, the change effort gets stuck and messy in trying to change the culture, failing more than 53% of the time (1).
“To successfully transform, today’s organizations need to embrace agility from strategy to execution, and enterprise-wide.” Forbes Insight
The Forbes-Agile Alliance report shows the risks of “Agile Transformations” where we can identify the stumbling blocks described above — Leadership practices and Corporate Culture.
“Many organizations are undergoing major transformations due to changing customer needs, fluctuating market demands, competitive pressures, and disruptive technologies. But less than half of executives (47%) believe they can extract sustainable value from these transformations.”
“At any given point, a third of all large companies are experiencing a severe deterioration in total shareholder value, and successful recovery from this deterioration is the exception rather than the norm, according to findings published on the MIT Sloan Management Review website.” (2)
“Part of the problem is that many organizations continue to function under rigid vertical organizational structures. Today’s modern, digital, networked businesses must acknowledge the innate ineffectiveness of traditional management while recognizing the urgent need for greater agility, an organizational approach defined by quick iterative cycles and empowered cross-functional teams engaged in discovering and delivering customer value.”
Agile-based approaches have been used successfully to change Business Processes, which are complicated challenges. In contrast, they have yet to solve complex challenges like transforming Leadership Practices and Organizational Culture. Furthermore, looking at the challenges businesses face in today´s complex world, we realize that “agility as usual” won’t consistently do the job needed to achieve Business Agility “from strategy to execution and enterprise-wide.
However, as Dr. John Vervaeke says, “This is not a matter of knowing that you have to go outside the box; it’s a matter of how to go outside the box.”
If agile approaches won’t get the job done in most cases, how can organizations achieve consistent Business Agility “from strategy to execution and enterprise-wide”?
Awareness-Based Systems Change is the How.
Awareness-Based Syetems Change is the how-to you need as a leader to transform your company into an organization that is “agile from strategy to execution, using culture as a driver for transformation.”
Read the article here:
Conscious Business Agility. How to Make a Successful Enterprise-Wide Business Agility Transformation.
(1)(2) Reframing Failure. Failure in the context of Business Agility is: “the lack of capacity to perceive the best possible future for the business.” Given the challenges ahead, when leaders say: “We are not Agile in both strategy and execution” and “culture is an obstacle to achieving agility,” they are condemning the whole organization to languish or, worse, to perish. In other words, their blind spot is in charge of the business.
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