Don’t Get Stuck in Agile Bureaucracy

Six ways to revitalize your agile transformation.

It’s a tale as old as time. A leader’s ready to future-proof their organization — to eliminate layers of management and slow bureaucratic processes in order to increase speed and agility. Several of their competitors have started an “agile transformation,” and they’re even reading about said transformations in Harvard Business Review. Clearly, an agile transformation is the modernization they need, so they pick a proven framework promising better business results.

But over time, they realize the transformation isn’t achieving its full potential. Employees are still stuck in unnecessary meetings; engagement is still stalling out; any innovation that’s happening feels limited; and the organization is still struggling to meet the market quickly enough. “What’s happening?” they wonder.

Over the years, I’ve seen leaders and organizations get “stuck” in a form of agile that starts to look like the bureaucracy they initially wanted to bust; instead, they become an agile bureaucracy. Let’s pick the term apart.

A bureaucracy is designed to maintain uniformity and control within an organization. It does that through the specialization of functions, adherence to fixed rules, and a hierarchy of authority. In an agile bureaucracy, leaders continue to operate with a command-and-control mindset and give teams little to no freedom to adapt their ways of working, demanding they conform to (agile) processes and standards.

If you feel like your organization has fallen into this pattern and needs a reset, explore these six ways to help revitalize your agile transformation.

1. Examine beliefs about people in the workplace

“What got you here won’t get you there.” — Marshall Goldsmith

When breaking down command-and-control hierarchy, we must challenge our assumptions about how people behave in the workplace — assumptions that have been baked into organizational culture for decades. As early as 1960, Douglas McGregor, a management professor at MIT, described two sets of contrasting beliefs we tend to hold about people in the workplace:

Applying agile ways of working inside Theory X’s belief system won’t result in meaningful improvement.

For example, suppose you believe you can’t fully trust people to make (more) autonomous decisions. In that case, you will either consciously or unconsciously demand significant control over and visibility into what is happening. In the spirit of executing “good” management, you’ll limit a team’s authority to make decisions as it sees fit. This results in agile micromanagement and significantly hinders agility.

Working differently requires thinking differently. Abandoning old paradigms of leadership, authority, and management is hard, and can trigger an identity crisis among managers. But it can be helpful to look to those who’ve made the leap — and benefited from adopting more human ways of working aligned with Theory Y beliefs. Two examples:

1. If you’re worried about teams making costly mistakes, consider Schuberg Philis, a Dutch IT company responsible for the mission-critical infrastructure of banks, logistics, and energy infrastructures. This 400-person company has no managers, proving it’s possible to execute sensitive work through self-managing teams.
2. If you’re worried about scalability, take a look at Haier, a Chinese appliance manufacturer that broke up an organization of 80,000 into 4,000 self-managing teams (or “micro-enterprises”) of 10–30 people, each with its own P&L and the authority to elect leaders.

In our experience, letting go of control and adopting a Theory Y mindset doesn’t create an unmanageable mess. Instead, it can have a significant positive effect on a business’s bottom line. But it can be hard to believe if you’ve never experienced it. How to get started? Where is it safe to experiment? For a short period, try giving a team total control over their decisions, organization, and what to work on. Just request that they align their work to key business performance indicators — and let yourself be surprised.

2. Reground the transformation’s strategic purpose and principles

Agile bureaucracies can suffer from a general lack of understanding why the change has strategic value. When you make an effort to reground your transformation’s “why,” you can examine the effectiveness of your current way of working and evolve beyond the framework you originally picked.

Sit down and clarify why your agile transformation is essential — and what “good” looks like for your organization. The transformation’s purpose and principles will become the foundation for evolving the organization beyond what it currently is.

Use these questions to (re)define your transformation’s purpose:

• “What outcomes do our new ways of working need to realize?”
• “What strategic direction do we hope to enable by changing how we work?”

Some common answers might include reducing the time it takes for a new product to get to market, attracting new talent, reducing waste, improving decision-making speed, boosting engagement, and increasing customer satisfaction. Whatever your ambitions, write them down — and don’t just create a wish list: Describe why improving these metrics is essential for your organization.

Then, with a newly energized purpose, ask yourself: “How might we achieve that? What does ‘good’ look like?” You may first say, “Well, the principles listed in the agile manifesto provide the answer…” and it’s true the manifesto is a valuable source of inspiration. It’s also more than 20 years old and not specific to your organization’s context. Instead, design your own principles by reflecting on the question: “What would it look like if we were extremely agile? If our way of working were perfect, it would…”

Consider applying a participatory approach and involving as many people as possible in co-creating your principles. Here are some principles we’ve encountered in our work (using the Operating System Canvas as a lens):

• Create accountability through transparency (Information)
• Steer continuously through experimentation (Strategy)
• Value progress even/over perfection (Innovation)
• Distribute as much authority to the edge of the organization as possible (Authority)
• Centralize only where it accelerates teams at the edge (Structure)

3. Review your current framework and practices

“A fool with a tool is still a fool.” — Grady Booch

In many agile bureaucracies, people follow a practice or framework without considering what “job” it’s meant to do. This creates a focus on output rather than on outcomes and value. The plans, story points, velocity, and milestones become more important than creating the conditions for excellent results.

One example is the misuse of OKRs. They can be excellent for aligning teams and creating shared understanding. But they don’t achieve their goal when implemented with a command-and-control mindset.

“Do not use OKRs if you want to control people’s activities. Only use OKRs if you want to direct your people toward desired outcomes and trust them enough to figure out how. OKRs ONLY work for empowered teams, otherwise, they are a travesty (reminiscent of how Agile is implemented in most companies).” — Christina Wodtke in Cascading OKRs at Scale

With your new purpose and principles in hand, you can review your current practices: Which ones are still fit-for-purpose and which ones need to be reconsidered? See agile frameworks as a menu of options. Experiment with the elements that fit your purpose and principles — and eliminate or reinvent the parts that don’t.

4. Enable people to adapt how they work to their context

“You don’t force an ‘agile transformation’ onto people. Instead, you stop doing the things that prevent agility, and the ‘transformation’ takes care of itself.” — Allen Holub

In agile transformations, we often observe a stifling desire for conformity. Admittedly, it can sometimes be helpful to have the same practices and work on the same rhythm; this is especially true when teams need to synchronize to create value. However, leaning into rigidity and conformity because we either desire control or fear chaos is counterproductive.

Consider only introducing rules that help you get where you want to go. We call these “enabling constraints.” Two examples: 1. speed limits for driving and 2. safety requirements for brakes and seat belts. Because everyone follows the same enabling constraints, it’s possible to both go fast and stay safe.

Teams rarely benefit from mandatory, one-size-fits-all processes that can’t be tailored to fit their specific contexts. Let teams pick their own ways of working within the boundaries of the enabling constraints and principles of the organization.

5. Shed outdated processes

Agile practices are often stacked on top of existing bureaucratic processes. For example, the PMO or steering committee continues to exist and requires detailed reporting; an organization continues to have individual performance management or misaligned incentives; even though cross-functional work is taking place, functions like Finance, HR, and Compliance work in silos and haven’t changed their expectations or ways of working.

Similar to financial debt (paying interest on a loan) and technical debt (the costs of delaying maintaining or refactoring code), bureaucratic processes can compound into another costly form of debt, one we call “organizational debt.” Organizational debt refers to “the policies, processes, and practices that once were introduced for a good reason but never reconsidered if they still serve their purpose or are worth their cost.”

If old structures stay in place and aren’t reconsidered (or removed entirely), any positive impact from using agile practices will be limited. One way of attacking this problem is to go on a bureaucracy bounty hunt. Invite people to propose a redesign (or an elimination) of an existing bureaucratic process. Prizes can be awarded for whoever reduces the most waste.

6. Use experimentation to continuously evolve the organization

It’s not uncommon for organizations to get stuck inside their current agile model. Because of agile transformation’s “blueprinted” implementation phase, there’s often no formal mechanism established to continue changing and improving an organization. Nobody owns that work — and nobody knows who can decide what to change and when. In that scenario, it’s easy to assume only leaders can change something. Even the Dutch bank ING, famously praised for its agile transformation, has struggled to evolve its model after its initial introduction.

A truly agile organization relies on active employee participation and constant experimentation to continuously evolve its ways of working.

We help clients embrace continuous participatory change, a state where everyone aims to remove barriers to success and one that allows them to do the best work of their lives. Here’s how to do it:

First, ask teams what’s in their way — and listen. When you’ve picked your purpose and principles, invite as many people as possible into a conversation about them. Discuss gaps in thinking, review current agile practices, ask which organizational debt should be paid off first, and source ideas for new practices.

Dig deep with questions like “What’s stopping you from doing the best work of your life?” and “If you were CEO, what would you change immediately?” The Operating System Canvas can be a useful tool to map answers and insights. Use it to reflect and visualize the tensions in your system.

Second, invite people to craft experiments based on the tensions. Pick new practices to try and get rid of or innovate current ones. Don’t overhaul everything all at once. Instead, flex the muscle to continuously evolve the organization based on what people sense. The best way to do that is to encourage people to propose “safe-to-try” experiments. Start where it hurts most. Then, build on early results to create momentum. To create structure around team-based experiments, use the template from the article “Changing Your Organization Through Experimentation.”

Finally, keep cycling through the cycle.

When organizations adopt agile without a strong grounding in a strategic purpose, new principles, and Theory Y mindset, they can at best experience a small increase in agility in a few areas. But at worst, an agile transformation can be strangled by its own red tape, making organization-wide agility impossible to achieve.

I view agile transformations as a way to help organizations move closer toward the future of work. When paired with a high degree of self-management and continuous participatory change, unlocking greater business performance becomes possible.

If you enjoyed this article, here are a few more related resources:

• We’re stuck in agile bureaucracy — but there is hope! (36 minute keynote)
• Agile in the Boardroom and Beyond (25 minute video)
• Beyond Agile: Why Agile Hasn’t Fixed Your Problems (7 minute read)

Credits: All images by Alisha Lochtefeld, editing by Zoe Donaldson, and thanks to Matt Basford, Juliane Röll, and Michael Woodley for their feedback.