Management And Accounting Web

Rigby, D. K., J. Sutherland and H. Takeuchi. 2016. Embracing agile: How to master the process that's transforming management. Harvard Business Review (May): 40-50.

Summary by James R. Martin, Ph.D., CMA
Professor Emeritus, University of South Florida

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Agile management is about taking people out of functional silos and putting them into self-managed customer-focused multidisciplinary teams. Agile is a radical departure from command-and-control style management. Instead of command-and-control, agile is about creating an environment where teams create innovations in products and services, as well as in functional processes. The purpose of this paper is to describe an agile methodology including six practices that facilate the transformation to agile management.

1. Learn How Agile Really Works

Agile is built around motivated individuals, and a creative environment for problem solving where employees talk face-to-face. Teams create a vision, but only plan those tasks that won't change by the time they get to them. They also experiment on small parts of products with a few customers for short periods to resolve arguments rather than debate or appeal to authority. Agile teams also use frequent market test, and constant collaboration. There are several versions of agile including scrum, lean development, and kanban. Scrum places emphasis on creative and adaptive teamwork in solving complex problems. Lean is focused on the continual elimination of waste, and kanban concentrates on reducing lead times and the amount of work in process. The emphasis in this paper is on describing scrum and its derivatives.

Scrum involves forming a small cross-functional self managed team, (3 to 9 people) with an initiative or product owner who is responsible for delivering value to customers (internal and external). The team creates a road map for activities that won't change before execution. Tasks are broken into small modules and include how to accomplish the tasks and a clear definition of "done." Working versions of the product are developed in short cycles (sprints) guided by a facilitator or scrum master.

Scrum provides a number of major benefits including increased team productivity and employee satisfaction, minimization of waste, customer engagement and satisfaction, and reduced risk. It also allows senior management to do the higher-value work such as creating the corporate vision, and prioritizing strategic initiatives.

2. Understand Where Agile Does and Does Not Work

Agile works where the problem to be solved is complex, solutions are unknown, product requirements will likely change, tasks can be modularized, close collaboration with users is feasible, and creative teams will typically out perform command-and-control groups. The right conditions are defined more specifically in the illustration below originally developed by Bain & Company.

The Right Conditions for Agile

The right condtions for agile typically exist in product development functions, marketing projects, strategic planning activities, supply-chain challenges, and resource allocation decisions. Routine operations do not usually provide the necessary conditions. Behavioral changes, training, new technology, and eager participants are also required for a successful transition to agile.

3. Start Small and Let the Word Spread

Successful introductions to agile frequently start small in IT where software developers are already familiar with the principles. The authors mention John Deere's experience as an example where agile methods started in IT and then spread from IT to R&D and other parts of the company.

4. Allow "Master" Teams to Customize Their Practices

Mastering agile is similar to how martial arts students learn a process called shu-ha-ri. They study proven disciplines, then begin to modify traditional forms, and finally reach the point where they are free to improvise as they choose. Participants start by practicing widely used methods in stable teams that keep their progress constantly visible on white boards (kanban boards) or software supported computer screens. Modifications are based on experiments to ensure they improve customer satisfaction, work velocity and team morale.

5. Practice Agile at the Top

Many C-suite activities are well suited to agile methods including strategy development, resource allocation decisions, cultivating breakthrough innovations, and improving organizaion collaboration. Practicing agile at the top means reallocating leaders' time from functional silos to leadership teams that rank order enterprise portfolio backlogs, establish agile teams in the organization, and systematically eliminate barriers to their success. The authors include three examples of leadership teams based on agile methods. These include Systematic, a software company; General Electric's rebranded digital industrial company; and Mission Bell Winery.

6. Destroy the Barriers to Agile Behaviors

Techniques used to destroy barries to agile include:

Getting everyone on the same page. This is the responsibility of the executive team.

Don't change structures right away. Change roles.

Name only one boss for each decision. People can have more than one boss, but not decisions.

 Focus on teams, not individuals. Collective intelligence is more important than the intelligence of individual members.

Lead with questions, not orders. Tell them what to do, but not how to do it. The agile management style helps functional managers grow into general managers and helps strategists and organizations evolve from silos competing for resources into cross-functional teams.

The greatest impediment to agile is the behavior of executives who don't understand the approach and continue to manage in ways that undermine the effectiveness of agile teams. However, those who learn to lead agile's extension to a broader range of business activities will accelerate their company's profitable growth.

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