Senior Managers Play a Critical Role Shaping an Agile Transformation

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We’ve all heard that an agile transformation can only be as successful as the level of the most senior manager that supports it. But besides supporting a transformation, what else does a senior manager or executive need to do to ensure its success? Turns out, quite a lot.

It occurs to me that there are very big ideas inspired by Deming, Kotter and Laloux that should be channeled through the executive leaders who can change the shape of the company. Deming introduced ‘14 Key Principles for Management’ to significantly improve the effectiveness of a business or organization. Kotter famously wrote about Change Management in the books Leading Change and Accelerate, the key points of which are explained in his ‘8-Step Process for Leading Change’. And Laloux introduced us to Teal Organizations and radical, corporate self-management and re-organization strategies in the book Reinventing Organizations.

There are of course dozens of other great books that explain how leadership can change the shape, culture, and leadership style of the organization. But for the executives who are focused on the agile transformation, where should they start? After all, not every executive can change every aspect of the company. Each key executive needs to focus on their own area of responsibility and embrace modern leadership concepts including the deliberate choice to collaborate over leading by command and control. It is the collective coordination and combination of the senior leadership team’s efforts that will lead to significant change.

Every organization must prioritize the work they need to focus on in order to evolve. An agile transformation requires progress on multiple fronts. These changes often include changes to organizational structure such as reorganizing into teams of teams that focus on customer outcomes. It should also focus on transparently sharing and connecting strategic intent to those teams, building and leveraging expertise through a centralized Product Management function. Most organizations also focus on improving and expanding how they embrace customer-centricity, product discovery, and customer experience as it relates to the products and services they design and produce.

As organizations mature further in their transformations, they also tend to modernize and transform HR and Finance functions to be more integrated with the organization. This often involves reimagining the people’s annual reward cycle, the annual finance and budgeting cycle, and the elimination of a traditional Project Management Office, evolving into a more modern and integrated agile portfolio kanban system or Value Management Office (VMO).

All of this assumes there is some collective agreement for the need to change among executives and some sort of centralized focus and involvement from the people leading the Agile Transformation strategy itself.

Agile Principles and Values for Leaders

The average middle manager is helpless to change these things on their own, except for helping to reinforce and encourage their leadership to pursue these things. Meanwhile, middle managers have a whole host of other topics of concern to facilitate in support of the transformation. There are therefore, maybe two sets of “agile principles and values for leaders”. One for executives changing the shape of the organization and one for middle managers who focus on delivery, operations and supporting the teams. Today, I’m focusing on the first, as it is principally important that the senior managers set the right strategic direction for the company to lay the groundwork for the right focus on delivery and outcomes.

So what do executive managers need to do to help drive change and support an agile transformation? Consider these five strategic imperatives:

Align the business to its product-focused, customer-centric purpose

• Create the vision and top-down strategy to lead the organization, but incorporate feedback from their directs, the teams of teams, and customers to adjust the strategy quarterly.
• Utilize Objectives and Key Results (OKRs) for the company, divisions, and teams of teams as a monthly or quarterly goal setting mechanism to retain focus on the right strategic imperatives.
• OKRs should be based on a longterm vision while targeting measurable and meaningful short term results as steps to achieve those longterm goals. Well-written OKRs will inspire but not dictate the solutions needed to achieve the goals.

Reorganize around a forward looking focus and self-sufficient teams

• An old organizational structure reinforces political barriers and old ways of working that slow the flow of work. Instead consider a reorg to a new structure focused on a limited number of key areas of focus, fully supported by the people, skills, and resources they need to be successful.
• Focus on building a limited number of teams of teams that correlate to the strategic focus of the company and how it serves its customers.
• Strive to create as few shared services groups as possible so as to eliminate unnecessary dependencies among the teams of teams.

Reimagine anything with annual cycles to align with iterative work

• HR and Finance in particular tend to provide annual, antithetical patterns that interfere with transformational progress. Look for quarterly options (or better) everywhere possible to create a more nimble organization. Ideally, one should strive to create continuously adaptive cycles using a portfolio kanban system or a VMO.
• Embrace new career ladders and titles that reflect the work, including any new agile roles in the organization. Also standardize on modern agile job descriptions to improve recruiting success.
• Create healthy performance reward strategies with tighter feedback loops, favoring team and product successes above individuals’.
• Build adaptive financial models that adjust at least quarterly and align to agile product cadences to meet the needs of the business as it changes.
• Stable teams of teams will provide an accurate account of the people, the biggest finance driver. Consider using estimated and real-time, team-based headcount mechanisms to drive budgeting and actuals in place of time tracking systems.

Invest in people and build feedback loops to re-assess as needed

• Right-size the business with the skills necessary to thrive. Critical people to the business’ success are sometimes not hired because long-tenured and yet no-longer-useful people remain.
• Strive to flatten the organizational hierarchy. Pushing accountability and responsibility down to the teams of teams means less layers of management are necessary than they once were.
• Align business strategy changes with teams’ sprint or product increment cadences to capture the learnings from product delivery as they happen to better build strategic feedback loops that determine how to impact finance, hiring, staff allocation, and other organizational changes.

Embrace change + invest in an organizational structure to support it

• Consider creating a Product organization to drive design and innovation from a central source. Product Managers should be delegated the strategic decision making ability in their respective solution areas of responsibility. The CEO should have direct access to the central source where these people report.
• Consider creating a Portfolio or Value-focused Transformation organization to centralize and share the key strategic roles and change agents. This may also include the centralization of an Agile Center of Excellence that represents the company’s point-of-view for consistency, education, community learning, and the evolution of concepts that matter to the organization.
• Some executives create an Executive Portfolio Wall (kanban system) to visually track the initiatives being considered vs. those that are active or complete. Somehow, there should be a concerted effort to only launch new initiatives that are connected to the strategic direction and current priorities and are also affordable in terms of time, energy, focus, and cost.

These five strategic imperatives must be embraced by an executive team in order for any agile transformation at a large company to be successful.

Hi, I’m Brian Link, an Enterprise Agile Coach who loves his job helping people. I call myself and my company the “Practical Agilist” because I pride myself on helping others distill down the practices and frameworks of the agile universe into easy to understand and simple common sense. I offer fractional agile coaching services to help teams improve affordably. See more at FractionalAgileCoach.com

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