How agile methods can give you a competitive advantage

In the 21 years since a col­lec­tion of soft­ware engi­neers com­posed and put their names to the Agile Man­i­festo, there is hard­ly a major com­pa­ny around that has not adopt­ed some aspect of agile work­ing method­ol­o­gy in its own busi­ness.

Most think they have, but few haven’t quite achieved it.

Get­ting it wrong can spell dis­as­ter. Take the exam­ple of the Nokia phone com­pa­ny, which was sold to Microsoft in 2014 after a spec­tac­u­lar fall from grace.

Julian Birkin­shaw, pro­fes­sor of strat­e­gy and entre­pre­neur­ship at Lon­don Busi­ness School, notes that the Finnish firm’s sales and tech teams saw chang­ing con­sumer demands and had smart­phones with touch screens in pro­to­type form, but the key deci­sion mak­ers at the cen­tre were the last to know. The out­come was any­thing but agile.

The sto­ry of Nokia’s once world-lead­ing mobile divi­sion flags sev­er­al impor­tant aspects about achiev­ing cor­po­rate agili­ty, accord­ing to Birkin­shaw, who advis­es organ­i­sa­tions of all stripes on how to use agile to become more effi­cient and respon­sive to their cus­tomers and mar­kets.

“Agile is a very good way of push­ing the train faster down an exist­ing track but if the train needs to change direc­tion and get onto a dif­fer­ent track, heavy invest­ment in agile is unlike­ly to pro­vide that,” he says. Instead, that requires “heavy duty bot­tom-up and top-down invest­ment ask­ing where are we going, why, and what are the dif­fi­cult choic­es required in that?”

These are big con­ver­sa­tions, which are best done in per­son. “I’m a great believ­er in agile, allied to a face-to-face work envi­ron­ment where peo­ple get to kick around these big strate­gic ques­tions about where they’re going next,” Birkin­shaw says.

He also warns that remote work­ing makes it hard­er for front-line intel­li­gence to pass up the chain of com­mand. “Com­pa­nies have got to induce their employ­ees to move towards a hybrid work­ing week where­by they are actu­al­ly in the office two or three days a week,” he says. But this is eas­i­er said than done.

Remote control

The coro­n­avirus pan­dem­ic saw many busi­ness­es forced to adapt work­ing from home prac­tices, and after two years remote work­ing is firm­ly embed­ded in Britain’s cor­po­rate cul­ture.

Simon Wingate, man­ag­ing direc­tor of recruiter Reed, believes employ­ers should be encour­aged to “remain open-mind­ed to the virtues of remote work­ing, not least to keep their recruit­ment options open in a com­pet­i­tive labour mar­ket.”

The chal­lenge of find­ing tal­ent is high­light­ed by February’s Office for Nation­al Sta­tis­tics fig­ures which showed 1.3 mil­lion job vacan­cies, which Wingate notes is a record.

“It [has] shift­ed from a buy­ers’ to a sell­ers’ mar­ket where work­ers hold the cards,’ Wingate says. Reed’s own research shows that flex­i­ble hours have become the sec­ond most impor­tant moti­va­tion for staff after pay (31% ver­sus 53%).

In fact, so prized is remote work­ing that a third of us are pre­pared to coun­te­nance a cut in pay in return for hav­ing it on a per­ma­nent basis. So how can firms stay tru­ly agile and on top of their game with the trade-offs imposed by ful­ly remote or hybrid work­ing?

One answer from agile con­sul­tant Karim Har­bott, author of The Six Enablers of Busi­ness Agili­ty, is the stark obser­va­tion that the abil­i­ty to col­lab­o­rate is more impor­tant to enter­prise agili­ty than tal­ent in spe­cif­ic work tasks. That’s true of ful­ly vir­tu­al, or hybrid or face-to-face teams.

In any event, Har­bott, a for­mer soft­ware devel­op­er and Scrum mas­ter, believes much of the in-per­son agile activ­i­ty can be repli­cat­ed online from using Zoom or Microsoft Teams to vir­tu­al white­boards and group mes­sag­ing soft­ware like Slack.

His crit­i­cal assess­ment, though, is that it’s not defi­cien­cies in team work­ing that are the biggest bar­ri­er to inno­va­tion and agili­ty in busi­ness­es, it’s usu­al­ly the busi­ness­es them­selves.

“Most peo­ple focus on process­es, prac­tices, frame­works and tools – this is your scrums, your kan­bans,” he says. “What I’m say­ing is you can’t wor­ry about those things until you’ve cre­at­ed the organ­i­sa­tion­al oper­at­ing sys­tem for those things to work.”
The organ­i­sa­tion­al oper­at­ing sys­tem requires the right lead­er­ship style and cul­ture, the right team struc­tures, as well as the “right enabling and empow­er­ing HR poli­cies incen­tivis­ing indi­vid­u­al­ism, not team-based col­lab­o­ra­tion.”

Once that has been achieved, you then need the right gov­er­nance in place. The hard part is chang­ing lead­er­ship style, in going from “micro-man­agers, com­mand and con­trollers to a more enabling leader” who will “safe­ly decen­tralise deci­sion-mak­ing… know­ing that peo­ple will go in the direc­tion you want them to go and do the right things.”

Volatile times

If the pan­dem­ic has shown us any­thing, it is that busi­ness lead­ers don’t have a choice in the change of work­ing prac­tices. The way Har­bott sees it, the advent of remote work­ing is not the main busi­ness issue high­light­ed by Covid-19.

“For me a big­ger game chang­er has been real­is­ing that the world is more change­able and more volatile than we pre­vi­ous­ly thought,” he says. “Busi­ness mod­els need to change as well as ways of work­ing and that has been the game chang­er, those that can evolve their busi­ness mod­el to sur­vive the pan­dem­ic rather than those who can evolve their work­ing prac­tices to sur­vive the pan­dem­ic. Because work­ing prac­tices are actu­al­ly easy to evolve, busi­ness mod­els less so.”

Here is the point where agile meets agili­ty, how a method­ol­o­gy and its suc­cess­ful appli­ca­tion to your busi­ness can make all the dif­fer­ence.

Accord­ing to Har­bott, the prime chal­lenge is “the tools and tech­niques that work for run­ning a busi­ness as usu­al don’t work for cre­at­ing new prod­ucts, ser­vices and busi­ness mod­els, ”because it is known and unknown. It is about exe­cu­tion, exper­i­men­ta­tion and learn­ing.

First, we have to accept that these are dif­fer­ent skill sets, requir­ing dif­fer­ent cul­tures and frame­works with­in which to devel­op new prod­ucts and ser­vices for cus­tomers. That means dif­fer­ent peo­ple with dif­fer­ent skills work­ing under dif­fer­ent work­ing con­di­tions are the lead­ers of inno­va­tion.

“They are often held back by bureau­cra­cy, so we need to put in place just enough bureau­cra­cy to keep us com­pli­ant and safe and min­imise risk, but not so much that it sti­fles that inno­va­tion,” Har­bott says.

Next you need to accept fail­ure, but you need to know how to fail cheap­ly and quick­ly. “And then roll those things out and dou­ble down on the things that are show­ing promise,” he warns. Try this under com­mand and con­trol and “if your gov­er­nance process says you need to pick the right one and exe­cute it, you’re like­ly to effi­cient­ly exe­cute against the wrong thing.”

CEOs, he con­cludes, must under­stand who in their organ­i­sa­tions is keep­ing the lights on with busi­ness as usu­al, who is cre­at­ing tomorrow’s prod­ucts and have dif­fer­ent met­rics for suc­cess on each side, as well as a dif­fer­ent cul­ture.

They must remem­ber that research and devel­op­ment isn’t throw­ing mon­ey around.

“You [need to] give it time, ener­gy and atten­tion to cre­ate the infra­struc­ture, to edu­cate senior lead­ers so that they under­stand inno­va­tion as much as they under­stand exe­cu­tion, and then you can start to step back.”

In oth­er words, cre­ate the sys­tem, cul­ture and struc­ture for your staff to agile in and let the mag­ic hap­pen.

“Your peo­ple on the ground will cre­ate the ideas and build the busi­ness mod­els,” Har­bott says. “Steve Jobs didn’t come up with the idea for a phone, in fact he want­ed to do some­thing else. His team con­vinced him, and that’s the way we need to go.”