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“The only sustainable competitive advantage is an organization's ability to learn faster than the competition.” This assertion, made by Peter Senge in his 1990 book The Fifth Discipline, was almost radical at the time. Now, three decades later, it remains a core tenet of agile organizations.
Truly agile organizations have gone well beyond the traditional notions of learning and development that have characterized many companies’ efforts in the past. They make sure learning is part of the fabric of everyday business, with leaders who are constantly engaged in their own quests for understanding and exchange.
Leading agile organizations are companies that know the limits to their own understanding and see the best way forward as hands-on doing and trying. In other words, constant learning is the only way forward.
Fast, flexible, and fallible is the name of the game for good reason: when companies are agile, they can remain viable in the face of unprecedented uncertainty.
As McKinsey wrote in its 2018 report Leading agile transformation, achieving agility requires that leaders in the organization first change their way of thinking and speaking. Second, they must help teams work in new ways. Finally, leaders need to be able to embed new agile ideas into the organization for the long term.
It’s worth noting that when we talk about “agile leadership” and needing to become more agile, now, we aren’t talking about agile software development (“agile with a capital A”). Even though there is a fair amount of overlap between the ideas. Companies, leaders, and employees now need to operate with agility -- that “small-a” agility implies different mindsets and approaches to the work, control, and decision-making among others.
This is not just about adopting the tool kits and language of the agile world – to announce and use sprint planning, scrum meetings and retrospectives. It means making deep and meaningful change in an organization. The goal is to ensure that the people working there in small, semi-autonomous teams are aligned behind the company’s purpose and are obsessed with the impact they’re having on customers.
For instance, it’s a sign that agile culture has taken root when teams of employees at a call center actively seek ways to help their customers avoid calling at all, because they understand that no customer wants to spend time on the phone with a call center.
In this article, we consider the mindset of agile leaders, define agile organizations and take a brief look at their history before examining three steps to developing an agile organization.
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Agile organizations begin with agile leaders
Research cited in the McKinsey report indicates that the mindset of leaders greatly impacts a company’s efforts to improve the hallmarks of agility – customer centricity, speed, growth, and efficiency, to name a few.
As Darrell K. Rigby, Sarah Elk, and Steve Berez put it in a May–June 2020 article in the Harvard Business Review, “The job of a conventional agile team is to create profitable, innovative solutions to problems – come up with a new product or service, devise a better business process, or develop an advanced technology to support new offerings. The job of an agile leadership team is different. It is to build and operate an agile system – that is, an agile enterprise.”
But what mindset do you need? What distinguishes the thinking of an agile leader from that of a conventional one?
Those who want to lead an agile transformation must go outside their comfort zone to develop skills and abilities different from those that made them successful in the past, and build on the ones they already have. This is an essential step of any agile transformation.
Agile leaders have eight main characteristics:
Characteristic 1: The leader as visionary
Leaders who are capable of seeing through an agile transformation or building an agile organization from the ground up perceive themselves as having a special mission to articulate and spread the vision and purpose for the organization.
Often, this person is a master storyteller. The leader sees through what appears to be happening on one level and connects it to what may actually be happening at more subconscious levels. It’s as if she has an uncanny sense and ability to speak about the elephant in the room, and the gift is being applied in service of articulating the vision and progress toward it.
It’s not that one person or a small group should articulate the vision and impose it on others. Instead, leaders invite others to co-create and evolve that vision. They use their strong perception skills to come up with suggestions and then incorporate the feedback they hear until they articulate a clear shared vision.
Characteristic 2: The leader as guide
That shared vision or goal is sometimes called the North Star because it guides everyone in the organization, no matter where they are. Yet, even with a clear North Star, teams and individuals can find that it often becomes foggier and easier to get lost closer to the ground. Especially in the types of fast-changing environments that agility is needed for, the best next step or the right course of action often isn’t clear.
Agile leadership isn’t about just one visionary leader. It’s about agile leaders all across the organization, providing clarity to teams to help them progress toward the vision. That might take the form of helping the team better triangulate between the North Star and their own position or it might be setting boundaries and guardrails for how far afield the team should explore. The leader doesn’t swoop in with a map and a plan but guides the team to find its own way back onto solid footing when they’ve gone too far off and can’t see the way back.
Characteristic 3: Purpose and meaning-making
Agile leaders find ways to make the purpose tangible throughout the work and workplace and create opportunities in the flow of work to remind team members of their “why”. Because the goal that people are working toward puts the focus on others and not only on themselves, their work becomes more meaningful and takes on a whole new character.
This is particularly important in agile organizations because teams often work in open networks, where trust is critical. When purpose is shared and becomes tangible because it is being articulated regularly, the whole ecosystem is more stable and a foundation of trust is easier to form.
Characteristic 4: The leader as human, not authoritarian
Leaders with an agile mindset have either never adopted or have abandoned the idea that authority should be based primarily on rank. Agile leaders see themselves as architects of a system, as coaches, as catalysts. They have let go of the old leadership model of command-and-control, in which those in charge try to provide certainty to those in their charge.
It’s human nature for people to seek certainty in their leaders, particularly when change seems to keep wiping the slate clean. When change lands in a big way, the way it did when the COVID-19 pandemic hit, it can feel as if all that was relied on before is suddenly up for recycling, rethinking, or even complete revision. This creates a vacuum, and people naturally look to leaders to fill it.
But agile leaders do not seize on this human need and try to push through an agenda based on their own opinion or agenda. They are open, frank, and transparent. They tell it like it is – that they don’t know how things will pan out either. However, they can say that with the right mindset and processes, we can find a way to thrive. This takes an attitude of humility and the willingness to let go of overly showy displays of competence and confidence.
Characteristic 5: The leader as coach
The very nature of agility--the ability to move and respond quickly, flexibly, and productively--requires ability and decision-making pushed down and out to the frontlines. An agile leader isn’t managing a machine, interchangeable workers like cogs in the wheel, but rather a team of capable individuals with diverse ideas, skills, and experiences. They may not all have the skills or expertise they need in the moment. A good leader helps them develop.
Leaders who see themselves as coaches release control of teams and create a space of psychological safety for them in case they stumble. A coach is someone you can turn to with your doubts and struggles, to find support and clarity. By working through both of these issues with you, a company leader can provide you with guidance.
Characteristic 6: Embracing abundance, not scarcity
Agile leaders also draw on an abundance mindset, not scarcity. They avoid fixating on what is missing and instead focus on the resources at hand and the opportunities that are here right now and in the future. That requires a conscious intent to steer away from narratives that paint the economy as a fight for scarce resources in a dog-eat-dog world. In a scarcity mindset, there are always winners and losers.
Changing to abundance thinking requires a shift from the reactive to the proactive, a change from thinking about getting a piece of the pie to growing the pie.
Companies that open their resources to outside developers have embraced an abundance mindset, and so have businesses in which knowledge is shared with all the stakeholders involved.
As Chris Lewis and Pippa Malmgren point out in their book The Infinite Leader, if we are going to rebalance our leadership, we need an almost existential approach that includes “what-if,” blank-page thinking, which they call “zero-state thinking.” “Zero-state thinking doesn’t require capital,” they write. “It can use its ‘convening’ power to bring resources together. It identifies alignments and mutuality to create narratives around benefits.”
A leader who has an abundance mindset invites cocreation in finding a way forward, embracing an agile spirit.
Characteristic 7: Humility, not false pride
An agile mindset requires humility, the ability to admit that you don’t know something. It takes a lot of guts to get up in front of a crowd and admit that, but this key ability is the starting path to learning and is required by leaders seeking an agile transformation for their organization.
Similarly, humility means seeing oneself and one’s accomplishments as the product of joint achievement through joint efforts. These leaders have the self-assurance that comes with a growth mindset and constant learning, but when praise is showered on them, they look to the team to give credit where it’s due.
Microsoft CEO Satya Nadella has said it’s time to go from being “know-it-alls” to “learn-it-alls.” That shift takes humility.
It is particularly important that leaders at the highest levels of an organization show humility, and that they understand that their job requires finding and embracing good ideas – no matter where they come from – just as much as it requires having good ideas.
When a company’s leadership is perceived as humble, the things they say and do will be taken more seriously. Humility supports efforts to make changes; when false pride is detected, cynicism can ensue, undercutting efforts to make a change.
Agile transformations involve so much change in the way people work, and it’s important that this is acknowledged. Along with conviction, humility about the magnitude and difficulty of the effort is essential if a company seeks to make lasting change.
Characteristic 8: A focus on discovery
An agile mindset means a relentless focus on discovering things about yourself and your own assumptions, as well as those of your team members and customers. When you’re in discovery mode, empathy for everyone comes more easily, because you are actively seeking to understand.
Likewise, when a leader’s mind is focused on uncovering and exploring, the leader moves away from certainty, authority, and scarcity. The focus is not on issuing orders, crushing dissent, or micromanaging; instead, leaders are actively engaged in listening, welcoming dissent, and guiding and supporting.
This is prime territory for fostering innovation and collaboration, the fertile ground agile organizations seek. When you’re in the zone of discovery, you’re surrounded by the new. You are in a place where something might surprise or delight you. That same something might surprise and delight an existing or new customer, and then, without warning, you’ve stumbled upon the next iteration, product, or service.
A discovery mindset seeks diversity of thought and takes calculated risks. When in discovery mode, you can more easily enter into a concentrated flow that nourishes budding ideas and leaves workers excited by the collision of ideas, rather than exhausted by crushing complexity.
To reach the state of flow and maintain deep discovery, leaders must build in time for pausing and make a concerted effort to remove blockades and barriers for themselves and their teams.
According to Bart Schlatmann, the former chief operating officer at the Dutch bank ING, “Culture is perhaps the most important element of this sort of change effort. We have spent an enormous amount of energy and leadership time trying to role model the sort of behavior – ownership, empowerment, customer-centricity – that is appropriate in an agile culture.”
Principles for software development
The 17 developers, who got together during a ski trip, announced they would turn that model on its head through their Agile Alliance. Their manifesto expressed a need to get rid of “Dilbert”-like manifestations of arcane policies and work for work’s sake.
The group put forth these principles:
- Individuals and interactions over processes and tools
- Working software over comprehensive documentation
- Customer collaboration over contract negotiation
- Responding to change over following a plan
It was these ideas that gave rise to scrum boards, burndown charts and other agile tools and methods.
Another example is Bosch, a global manufacturer that was founded in 1886. After a few false starts, it also succeeded in establishing agile principles.
“For Bosch agility is crucial, it allows us to adjust to the increasing speed of the world around us,” Bosch’s CEO, Volkmar Denner, said in 2017. “Agility allows us to remain in a position as an innovation leader.”
Agile experts stress that it’s not the methods per se that have an impact. What makes a difference is an agile mindset supporting the methods.
Many experts see parallels between agile development processes and the way complex adaptive systems work. According to Jurgen Appelo, the author of Management 3.0: Leading Agile Developers, Developing Agile Leaders, “It is widely acknowledged that findings in complexity science can be applied to social systems, like software development teams and management, though it is still unclear how far we can go in copying system concepts from one discipline to another. But at the very least, software teams, team leaders, and development managers can be inspired to solve their problems by looking at other kinds of complex systems.”
The days when an organization stayed strong by being predictable and playing it safe are gone. In the digital economy, strength is manifested when an organization anticipates, initiates, or responds to change with creativity and flexibility.
According to McKinsey’s report on agility, though, most companies exist somewhere between the old and new models. They may not be truly agile, but they are headed in that direction.
For many companies, becoming fully agile in the sense of having all the trappings of “Agile,” is less important than truly adopting an agile mindset throughout the leadership. This mindset shift is no small thing.
The agile mindset shares much with the growth mindset. It is:
- Dynamic. Abilities and understanding can change and be developed over time.
- Open. Because the world is always changing, the most useful idea or information could come from anywhere.
- Seeking. Obstacles and challenges provide opportunities for growth and learning. Constantly find ways to learn more, faster.
- Risking. The important information can only be discovered by trying. Unexpected results are information-rich sources of learning.
- Relationship-oriented. Teamwork rather than individual genius achieves results.
- Systems-oriented. Problems emerge from complex environments and have to be addressed in complex environments. Monitor the system rather than control the components.
- Trusting. Trust and empower others with transparency and decision-making. Let knowledge and power flow rather than control.
- The job of leadership is to usher in the value and mindset shifts that lead to changes in behavior. This may include moving away from serving with fear of punishment or sanction to serving with passion and purpose; shifting from a “full speed ahead” mentality to one of “taking pause to reflect”; or dropping the idea that changing the organization is the most important thing, and instead focusing on changing yourself first.
By creating such environments and role modeling the mentality and behavior, companies can foster self-organization in networks of autonomous teams. Those teams can be empowered to solve the problems at hand themselves, while also moving forward through constant learning.
Becoming an agile leader
Embracing agility can make lasting change for the individual and the organization. How can a leader become more agile?
- Change their way of thinking and speaking. They should adopt the language of a coach rather than an authoritarian. It’s a language of nuanced questions meant to continuously uncover new insights.
- Help teams work in new ways. Everyone needs to understand that cooperation, collaboration and teamwork should be multidisciplinary and include diverse opinions.
- Communicate more frequently and in shorter bursts, with less reporting for its own sake. This frees up leaders to work on strategy while others can explore new terrain. Work becomes more of a flow.
- Embed new agile ideas into the organization for the long term. That requires fewer layers, greater transparency, and leaner governance, which will make it easier to shift resources quickly when there’s a need.
Becoming more agile also requires leaders who have thoroughly examined and adapted their own mindset, and can communicate easily with their team. As Lao-tzu, the ancient philosopher who founded Taoism, is believed to have said, “A leader is best when people barely know he exists. When his work is done, his aim fulfilled, they will say: ‘we did it ourselves.’”