Why is it so difficult to bring Agile and Lean to the organisational level?

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Are you also sensing something is wrong with today´s organisations? If you have been working with Agile or Lean for a while you typically notice that the early wins and benefits on a smaller scale will very soon hit it´s limits. Maybe you have been struggling with getting expected results from your Agile and Lean transformation initiative. Or you feel it is going painfully slow. In this blog I am going to put some light on what is wrong and what to do about it. My intention for you is to better understand the friction we are sensing in today’s organisations and what is getting in the way from creating truly Agile Organisations.

What is the problem with today’s organisations? When I am out coaching organisations I often hear: “Why should we bother improving our team everything around is stopping us”. “Management doesn´t support us”. “The company processes are too rigid”. “We are done but we are not allowed to deliver yet.” Or the opposite, “we have to deliver what ever we have, skip the quality just meet the deadline.” I think you can agree to that something is wrong with the way we traditionally organise ourselves.

Very few organisations are Agile or Lean on an organisational level. Even though Agile and Lean initiatives has created great benefits we have just scratched the surface of what is possible. Yes, there are many great Agile teams working but looking on a company/enterprise/organisational level, most oftenly they still function in a traditional, hierarchical, centralised, silod and bureaucratic manner. Our Agile teams are typically at the bottom of the hierarchy trying to deliver value in the horizontal domain while information and steering is going vertically.

If you have spent time in hierarchical traditional organisations you know they are not optimised for today’s complex, fast-moving world. Today’s organisations are built to maximise efficiency, control and consistency. They are not built for agility, flow of value. The way today’s traditional organisations are structured is a legacy from the industrial revolution and is more than 100 years old. They served the purpose to enable efficient companies and cheaply mass produced goods. Management was invented to optimize the use of the company resources. Organisations were built as strong hierarchies to enable control and efficiency. This is what Gary Hamel (professor at London Business School) refer to as Management 1.0 in his brilliant TED talk The Future of management and in his book with the same name. The same observation is also done by Jurgen Appelo in his book Management 3.0.

This worked in the past because the environment was stable. The production process may have been complicated but it was still predictable. There was a cause and effect relation. If we change A it will result in B. However today´s environment is totally different. Now it is much more complex. There is no clear cause and effect. Everything depends on everything. For example, if people are unmotivated, there is no simple one action we can take. It all depends. This requires a big shift for managers. Since there is no causality “Command & Control”  will no longer work. We have to move to “Sense & Adapt” instead. This require managers and change leaders to learn about “Complex Adaptive Systems CAS”, systems thinking and organisational coaching. One of the more known frameworks for CAS is Snowdens Cynfin framework.

The consequences of too rigid organisations is that those companies are being disrupted by fast moving innovators. Further there is a huge crisis for individuals in those organisations. People are stressed, burned out and disengaged. Only 16% of Swedish employees are engaged at work and 12% are actively disengaged according to the 2013 Gallup study “state of global workforce”. Roles have dramatically changed, requiring more dynamic engagement and greater self-initiative. When organisational strategy fails to address these needs, people become frustrated and disengaged due to little autonomy and bureaucratic organisation that are slow to adapt.

Moving from these traditional organisation there has in the last couple of years been a trend to more inclusive, collaborative and friendly workplaces. However many of these initiatives has been superficial. Directed at teaching managers how to be coaches, empowering people to be more responsible etc. This is what Jurgen Appelo refer to as Management 2.0.  Sure these initiatives have been beneficial but they haven’t solved the root problem. They have just reduced the pain.

The main problem is that with the prevailing thinking we view organisations as machines. If we just empower or motivate the employees a little more the human cogs will turn faster. People are mostly referred to as resources. What we need is a new paradigm where we stop viewing organisations as machines. It made sense with the machine metaphor in the past. Management was separated from execution. Management had the knowledge and the information.

We need a new paradigm where we view our organisations as living systems. With todays information networks we have provided a neural network to the old machine. Today everyone can access the same information. The machine can act as a living system if we just let it. This requires transparency with all information. Here is where have the friction. We need a Integral/Holistic approach where we integrate all aspects of an organisation. We need to look at culture and structure. Individuals and organisation etc.

The gap is bigger than we think. When I ask a group of managers to draw a organisation 9 out of 10 draws a hierarchical org chart. We are all so used to the pyramid as the natural structure and a power over governance structure that is difficult to imagine something different.

We need to re-invent our organisations and our management practices. Unless you are in a very stable business without changes or the risk of being disrupted (which I can’t really think of any). We need agile, creative, innovative and inspiring workplaces. We need companies that have a positive impact on society not just maximising shareholder profits. That are fit for humans and fit for the future (as Hamel puts it).

There is a huge untapped potential waiting to be unlocked. People spend their major awake time in organisations. If we can transform those organisations to be truly Agile and inspirational we will unleash a great untapped human potential that can be directed at creating more value to the sociality, the companies where they work and to people’s life in general. If we can identify different organisational DNA and spread these ideas of good examples that work, we can create organisations that will have a positive impact on everyone in those organisations and they will in turn have positive effect on others and society.

In this blog I want to explore together with you how to transform and grow true Agile Organisations. The good news are that there are already many companies that has adopted radical new ways of organising. There are concepts, methods and practices already existing.

I encourage you to become an organisations and management innovator! We can all contribute by starting where we are and becoming the change we want to see.

Here are some suggestion where to start:

  • The Management Exchange which is an open collaboration platform intended to crowdsource new ideas for re-inventing management and organisations initiated by Gary Hamel (professor at London Business School)

  • Management 3.0 founded by Jurgen Appelo with the purpose to reinvent management to build great workplaces.

  • Stoos Network founded by Jurgen Appelo, Steve Denning and several thought leaders to find better ways to organise and manage. You may join the discussion at the Stoos LinkedIn group or the Stockholm local Stoos Satellite MeetUp group that I am co-hosting.

  • Steve Dennings blog on Forbes about Radical management and leadership.

Or why not join the Agile People Sweden conference 25/9-2014 in Stockholm

In upcoming blog posts I will be sharing ideas around Agile Organisations and Agile leadership. I will explore topics such as:

  • Examples of self-managing and Agile organisations that can serve as an inspiration. Crisp is an ongoing experiment in itself and I will share what we learn.

  • How to transform traditional organisations and grow new ones into Agile organisations

  • How to apply Agile and Lean values and practices on an organisational level.

  • Agile leadership and culture

  • Tools and resources such as book recommendations and book reviews etc.

  • Cutting edge concepts such as Systems coaching, Leadership Agility, Consciousness development, Integral, Spiral Dynamics, Sociocracy, Holacracy

Please join in the discussion. I don’t have all the answers but I would like to co-create it with you. Please suggest topics to be explored below and your ideas and feedback are mostly appreciated.

5 Comments

  • 1
    Joseph Rossi
    2014-09-21 - 19:38 | Permalink

    Thanks Michael for sharing this. It makes me think about Frédéric Laloux research: Reinventing Organizations. It presents several beautiful examples of companies that chose another way of management.

  • 3
    2014-09-25 - 14:58 | Permalink

    Sometimes, we need to push the organization to change.
    In fact, lean organization design delivers efficient total process cost and improves processing time.
    I am starting to announce and use end-to-end function term such as order to cash, procure to pay, prospect to customer, etc… and leave old function name behind (finance, logistic, sales)
    People will enjoy their new role, as its expanded. And they work as a team player instead “silo” thinking.

  • 4
    Michael Göthe
    Michael Göthe
    2014-09-29 - 11:23 | Permalink

    Great point. That is the true meaning of end to end. Many tend to think end-to-end within a part of the organisation. Changing our language will change how we see and create the world.

  • 5
    Jonathan Stiansen
    2014-10-28 - 18:33 | Permalink

    Just a note, there is no part of the lean mantra that values cross functional teams.

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