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Q&A on the Book Unlocking Agility

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Key Takeaways

  • Organizations operating in an agile manner are exploring, disrupting and innovating their existing business models, product categories and markets. At the same time, they are also delivering on their commitments to their customers and collaborators in environments of less uncertainty. Embrace change, execute with purpose.
  • The Agile Working Group (AWG), a dedicated, cross-functional group of internal change leaders, is a critical part of a successful agile enterprise transformation strategy.
  • Although there is no such thing as *one* agile organizational structure, patterns are emerging showing characteristics associated with self-organization, deep collaboration and communication, providing insights for an organizational design appropriate for each organization’s unique context.  
  • The five dimensions of agility - Technology, Organizational Design, People, Leadership and Culture - need to be considered as a whole, as they will interact and affect each other in sometimes unpredictable ways.
  • The traditional function of HR - just like IT a few years ago - is under a lot of pressure to transform itself to an enabler of organizational business value, and less as a risk management and liability vehicle.

In the book Unlocking Agility, Jorgen Hesselberg explores how to embrace agility in large organizations and what can be done to remove impediments across the enterprise. It provides practical advice, resources and guidance with real-life examples of successes and failures from companies across a variety of industries.

InfoQ readers can download an extract of Unlocking Agility.

InfoQ interviewed Hesselberg about the five dimensions of agility, structuring organizations to foster working in teams, supporting an enterprise growth mindset, adopting an agile mindset in HR, changing the culture within an organization, the role agile working groups can play in increasing organizational agility, and what large companies do to embrace change and become more innovative.

InfoQ: Why did you write this book?

Jorgen Hesselberg: I wrote this book because I believe enterprise agility is one of the most important challenges facing companies today. It's not only important from a pure business perspective - without agility in a VUCA world survival is questionable - but I think it's fundamentally a question of creating more humane organizations where people enjoy what they do and find purpose in their work. I have been fortunate to have led several transformations where I could experience the positive impact of agile ways of working in large organizations, and I wanted to share what I've learned with others so they can benefit as well.

Most of the existing resources on this topic are either written by consultants who have not experienced the unique challenges of driving large organizational change from an insider's perspective or involves implementing a given scaling framework or methodology. In my experience, this is not sufficient for creating lasting, sustainable change. This book gives readers the background, resources and tools they need to start their own journey and ultimately unlock agility in a way that is appropriate for their organization's unique context.

InfoQ: For whom is it intended?

Hesselberg: The book is intended for change leaders of all levels in mid-to-large sized organizations. Change leaders are found in a variety of positions: they are C-level executives realizing that the way their company operates is not going to be sustainable in today's business environment. They are also HR managers, IT program managers and coaches working hard to remove impediments to agility across their organizations. What they have in common is that they recognize this is not about implementing a tool or a process - this is about fundamentally changing a culture and a way of working - it's about unlocking agility in all facets of the company.

InfoQ: How do you define enterprise agility?

Hesselberg: My most succinct definition is that enterprise agility is about "embracing change, executing with purpose”.

What I mean by that is that organizations that operate in an agile manner are relentlessly exploring, disrupting and innovating their existing business models, product categories and markets. They are thriving in environments with extremely high levels of uncertainty and variability. But at the same time, they are also delivering on their commitments to their customers and collaborators in environments of less uncertainty; where they have validated product-market fit and are exploiting their market position. This is what ultimately pays their bills and funds their ability to continue to innovate and explore new opportunities.

Enterprise agility is therefore about finding the balance between exploration and exploitation - embracing change and executing with purpose - which is absolutely crucial in order to survive in today's dynamic business environment.

InfoQ: What are the five dimensions of agility?

Hesselberg: In the book, I refer to five dimensions of agility that needs to be considered together in order to unlock organizational agility.

Broadly speaking, they are:

  • Technology - the tools, methods and techniques that can help an organization be more agile. I use the term "Technology" in the broadest sense, referring to fairly obvious aspects like enhanced infrastructure and tools like physical visual radiators or Jira, but also to methodologies, techniques and frameworks like Scrum, XP and the various scaling approaches. Technology is the most visible of the five dimensions - it's the “doing” side of becoming agile - but unfortunately many transformation efforts don't go much further, creating a temporary, yet unsustainable organizational impact.
  • Organizational Design - the physical and structural manner in which work is conducted. This dimension refers to the way we organize work across the organization. In particular, I'm referring to the physical work space and the degree to which it optimizes for effective communication and collaboration, as well as the organizational structure from which work flows through the organization. In my experience, it's a fallacy to think that an organization can embrace a more agile way of working while keeping the existing work spaces and organizational structures unchanged. This does not mean there is necessarily a "right" way to organize for a more agile way of working, but there are patterns we can learn from that help organizations optimize for what they are trying to accomplish.
  • People - this dimension refers to the characteristics of employees in agile organizations - and how organizations can grow, support and create an environment where they can thrive. We should not hide the fact that some people will not necessarily enjoy working in an agile environment; if you don't like transparency and collaboration, you are probably going to find working in an agile organization to be a challenge. I believe it is critical that organizations do their part to help people change to a new reality. That could mean relatively simple initiatives like targeted training and coaching, to more fundamental elements like redefining career paths, expectations of managers and changing who organizations recruit, retain or in some cases, choose not to employ.
  • Leadership - this dimension refers to the people who help set the tone for how work gets done and who, through their organizational influence, create an environment conducive for a more agile way of working. Leaders have a special responsibility when changing the way an organization operates. It is often easy to get that initial “honeymoon boost” when starting a change effort, but as reality sinks in and everyday responsibilities take their toll, the behaviors, norms and actions exhibited by the leaders will in large part determine whether the transformation will take hold. Creating psychological safety, the notion that people can speak up and voice their opinion without feeling fear of being ridiculed or otherwise punished, is one of many examples where leaders can set the tone and create a culture of continuous improvement.
  • Culture - this dimension is arguably the most important dimension of all and affects the other dimensions in disproportionate ways. If you're in a culture of fear, it is going to be incredibly hard to create an environment of fast feedback loops, collaboration and transparency, regardless of the fancy tools you may have, work space environments you build or motivated people you hire. Organizational culture is sometimes viewed as somewhat obtuse and hard to define - something that's just "there". In the book, we discuss in some detail how organizations can create an intentional culture by changing the reward systems that affect the norms and behaviors of its people. Once norms change, behavior changes - and the culture changes with it. This takes time, organizational alignment and requires a concerted effort at the upper leadership levels of the organization, but it is very tangible and effective when done intentionally.

Besides the five dimensions of agility - which are "internal" in the sense that change leaders can directly influence them and balance them as part of the transformation - there is an additional implicit, yet external dimension underlying the internal dimensions: the customer. Organizations ultimately exist to create value for the customer - both existing and future segments - so each of the dimensions implicitly optimizes for customer value.

InfoQ: How can we structure organizations to foster working in teams?

Hesselberg: When considering the organizational structure of the enterprise and how we approach teamwork, I think it's important to start with the end in mind. What problem are we trying to solve, and what are the economic sensibilities that help influence how we organize our work? Once we have a clear understanding of what we are trying to accomplish and the impact this work has on the organization from an economic perspective, agile organizations use this information to self-organize in a way that helps optimize for customer value.

Let me give you a concrete illustration: let's say you're part of a program (Program A) with 10 teams that are working on a product line that has a Cost of Delay of $100,000 per week. Let's imagine that there is another program (Program B) with another 10 teams for another product line that needs some of the same people you do for parts of their value stream - but their Cost of Delay is $1 Million per week.

How does this information impact how an organization chooses to self-organize? If people in the organization have access to this information and understand the economic impact of their work, they self-organize to optimize for the organization as a whole. In the example above, Program B gets more oxygen and can deliver value quicker. I have seen this in action many times at companies I work with: if we provide people with the transparency, empowerment and relevant information necessary to optimize for organizational value, self-organizing works quite well.

Many models often cited today, like the Spotify model, were created with this underlying theme as a guiding principle: how can we organize in a way that reduces the friction required to seamlessly deliver value? The problem with these models is that they are merely meant as a reference architecture and should (and do!) evolve from there. As described in the book, for instance, Anders Ivarsson, one of the authors of the original Spotify paper which later served as inspiration for companies such as ING, lamented the fact that people often viewed the model as a "solved problem" that could simply be implemented and hence create *the* agile organizational structure. The reality is that Spotify is organized very differently today than it was in 2012, when the paper was published. And that makes sense - Spotify is an agile organization, and as such will evolve as market conditions change and the organization improves over time. So is there such a thing as an agile organizational structure? My experience is that there are common characteristics between many agile structures, but they differ depending on the unique context of each organization. Unlocking organizational agility is too complex to simply import an existing solution from one company to the next.     

InfoQ: What can be done to support an enterprise growth mindset?

Hesselberg: In my experience, supporting an enterprise growth mindset starts with executive leadership. A growth mindset is the underlying belief that performance can improve through practice and that one's abilities are not "fixed" as long as we're willing to keep trying (and learning) in the process.

Research, most notably by Dr. Carol Dweck, has shown that people with a growth mindset tend to be more motivated and perform better, especially when faced with novel situations and uncertainty. The challenge is that an essential part of developing a growth mindset is permission to fail along the way. And this is where leaders play an essential role in modeling behavior and leading by example. When a leader admits to being wrong and making mistakes, it sends a powerful message across the organization that it's OK to not get it "right the first time", and that learning is a result of a series of "safe to fail" experiments. And this goes beyond simply showing the way: by changing existing reward structures and by promoting behaviors that represent organizational learning, leaders can have a significant impact in creating an environment of what Dr. Amy Edmondson refers to as "Psychological Safety".

In the book, I refer to a few companies that have done this successfully and outline how they did it, perhaps most notably Microsoft. Satya Nadella, as part of leading the transformation of the software giant from the legacy culture left by Steve Ballmer, took an intentional approach to creating an enterprise growth mindset at Microsoft when he assumed the role of CEO in 2014. The results are pretty stunning; many argue the company is an entirely different company today than when Ballmer reigned just a few years ago.

InfoQ: How does agile HR look, and what can be done to adopt an agile mindset in HR?

Hesselberg: Traditionally, one of the key objectives of Human Resources in larger organizations has been risk mitigation and reducing legal exposure.

As such, it has historically been quite removed from "the work" and has instead been focused on handling the management, processing and associated potential liability involved in hiring, retaining and ultimately letting go of people, rather than truly enabling these people to do great work (granted, this is an over-simplification, but HR has decidedly been more on the side of management than the people doing the work -  it's called Human "Resources", not people, for a reason).

Also, since people are typically the largest single expense item of an organization's total budget, HR has taken a cost-focused approach to creating value for the enterprise. Agile HR as a movement is still in its infancy, but in my experience the early indications of how HR in an agile environment looks is illustrated through three main themes:

  1. Deeper involvement with teams doing work: HR in agile organizations are much closer to the teams doing the work and act more as a partner and enabler, rather than a supporting service. For instance, rather than acting as a mediator between a prospective employee and a hiring team, an agile HR approach is to act as a coach and collaborate actively with both parties to more quickly identify how to create an environment of mutual benefit - or fail fast if there is not a fit.
  2. Empowering and informing, rather than telling, people what to do. Traditionally, HR owned employee survey data and would closely guard these secrets and ultimately define organizational improvement strategies. Agile HR involves giving teams direct access to this data so that teams can take more immediate action (together with their coaches) rather than wait for an elaborate strategy from above. For example, Comparative Agility, a continuous improvement platform, is often funded and supported by HR, but the data and insights are collected, analyzed and available to programs and teams so they can define improvement approaches that work for them. (Disclosure: the author is a co-founder of Comparative Agility).
  3. Redefining traditional role portraits, career ladders and compensation schemes. Companies working in an agile environment need people with different skills, knowledge and abilities than what you'd typically see in traditional organizations. To help support these needs, Agile HR takes a leadership role in redesigning existing role portraits to reflect a VUCA world and accommodate a more flexible, less rigid definition of how roles and associated job descriptions are typically defined. The traditional, linear career ladder also needs to be changed to reflect a more complex business environment; Agile HR enables more flexible and broader approaches to internal advancement. In addition, Agile HR is increasingly redefining how rewards, incentives and bonuses are distributed. There's less focus on the individual "rock star"; more emphasis on effective collaboration and rewarding performance at the team levels.  

Forward-leaning HR departments are already taking many of these actions; others will follow. HR needs to add value in enabling companies and their employees to be more agile. If HR is perceived as an impediment to this goal - rather than an enabler - HR risks becoming irrelevant as a corporate function. It is my experience that HR - much like traditional IT a few years ago - is waking up to this reality and actively exploring ways it can transform itself as a function.

InfoQ: How can we change the culture within an organization?

Hesselberg: A company's culture is an expression of its employees' shared values and beliefs; it develops over time and is a result of shared experiences and observed behaviors among its people.

Changing a culture is therefore not something that can be achieved through beautiful powerpoints, well-articulated messaging or updated mission statements. Rather, only by affecting how people act in a given situation can a company influence observable employee behavior and over time change the resulting culture.

One of the most effective ways I know to influence company culture is through effective incentive structures. If you want to help create a more collaborative culture, take a look at your performance metrics and make it easy to collaborate and work together. Remove the friction; make it a natural way to work. I often see companies talk about collaboration, yet have incentive structures in place that discourage and even punish collaboration through individual incentive programs, for instance. Changing those existing impediments can have a big impact on culture change.

Another way to affect the culture is by modeling the desired behavior at the leadership level by being authentic. Nothing is more jarring than having a leader talk about a culture of openness and then have them act in a way that completely undermines the message by being secretive and opaque in their actions; the message needs to connect with the action.

In my experience, transforming a culture is a result of changing organizational incentives (explicit or otherwise), which in turns affects behaviors, shifts norms and ultimately changes the culture.

InfoQ: What are agile working groups and what role can they play in increasing organizational agility?

Hesselberg: In my experience, the Agile Working Group (AWG) is the very engine of agile enterprise transformation. If we use Scrum as an analogy, you can view this group as the "ScrumMaster" of the organization, a servant leader removing impediments to enterprise agility. The AWG may have many names - sometimes it is called the Agile Center of Excellence, the Agile Transformation Team, and so on. The name differs, but the mission is the same: it removes impediments to agility across the enterprise.

Why is it so important? First, it accelerates the transformation. Change of this magnitude does not just happen by itself, and you certainly don't want an external consulting firm to lead it. This is a strategic effort that the company needs to own and the AWG facilitates the transformation. Second, the AWG is a powerful symbol and tangible evidence of executive support for the transformation. By having a dedicated, cross-functional group of high performing people focused on helping the organization through the change, it lends credibility to the effort and sends a message that this is not merely lip-service where we "implement' a scaling framework on top of an existing structure; this is a transformation and a commitment to fundamentally changing how we work as a company. Third, it demonstrates skin in the game. Change is hard and uncomfortable at times. When change efforts are pushed on people, it never works. The AWG is an internal group of people who understand the culture and internal "DNA" of the organization. And since the group is built on the concept of planned obsolescence, members of the AWG will ultimately work in the organizations they help transform - they will feel the effects of these changes themselves. Fourth - the AWG is effectively an internal incubator for agile and lean leaders. Members of the AWG will work with people from all levels and parts of the organization - they are enterprise transformation coaches who will gain a deep and meaningful perspective of how to create a continuous improvement culture. As they "graduate" from the AWG, these people will be well prepared to take on a variety of responsibilities within the organization as lean and agile leaders where they will continue to mentor and grow their people.

InfoQ: What can large companies do to embrace change and become more innovative?

Hesselberg: Embracing real change beyond mere incremental innovation is especially challenging for incumbent organizations; their ways of working have been informed by existing (successful) product lines. Disrupting the status quo therefore goes very much against the grain; if it ain't broke, why fix it? When working with large organizations, I've seen four main approaches to innovation that tend to work with varying degrees of success. Note that this refers to driving disruptive change; incremental innovation and variation on existing (validated) product lines is not as challenging, since much of the same culture, operating models, customer understanding, employee skill set, etc. can be leveraged to a large extent.

  1. Establishing strategic relationships with external innovation hubs. This can be an effective strategy to gain access to a culture, skillset, technical expertise and mindset that differs greatly from the incumbent organization.
  2. Taking an ownership stake in potential disruptors. If an incumbent discovers a potential disruptor early enough, taking an ownership interest can ensure the incumbent retains a level of control while benefiting from intellectual property and associated innovation. Ideally, the disruptor plays in a different, yet related market, resulting in synergies.
  3. Acquire disruptive competitors. If a competitor enters your market with a disruptive offering, acquiring the company altogether is an expensive, yet effective way to conserve market share and benefit from whatever innovation the competitor created.
  4. Growing a culture of internal disruption. Generating disruptive innovation internally is possible by providing slack among its employees ("20% rule"), creating opportunity for serendipity through periodic hackathons or launching subsidiaries by separating the efforts from the incumbent "mothership".

The culture of the incumbent tends to dominate the novel efforts, making truly disruptive innovation difficult to achieve. Of the four approaches listed here, I’ve therefore seen more success with the first three, as they naturally help limit the influence of the incumbent organization’s culture and provide a built-in buffer for new thinking and ideas necessary for true disruption and innovation.

About the Book Author

Jorgen Hesselberg is a cofounder of Comparative Agility, a leading agile assessment and continuous improvement platform. A proven thought leader of numerous successful enterprise transformation efforts since 2009, Hesselberg provides strategic guidance, executive counsel, and coaching to some of the world’s most respected companies, both as an internal change agent and an external consultant. He has trained thousands of people on agile and Scrum, disruptive innovation, and enterprise transformation strategy.

 

 

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