The Agile Transformation is Dead, Long Live Agile Delivery!

The global economy is unforgiving. Supply chains are fragile, and increasing pressure to do more with less pushes people past their limits. The pressure is causing people to crack under pressure, from entry-level workers to CEOs. Even minor stumbles can have significant consequences, costing thousands of jobs and billions of dollars. As an agile professional with more experience than I care to mention, I have reflected on what has happened in the business world over my career. I have witnessed plenty of positive developments, but businesses continue to struggle to deliver value to customers and maintain a sustainable pace of work. The conflict between labor and management over remote work is just one facet of this challenge. The decrease in productivity is another. We need to shift the paradigm of how we think about business and how it operates. 

The idea that we rethink how we look at business has festered in my mind since the beginning of the COVID-19 pandemic, which is officially ending this month. Business in the Western developed world was able to adapt to the crisis, but workers and governments absorbed the primary burden. The contradictions of our business culture were visible for everyone to see. The last three years of experience also made me reassess some of the ideas I have relied on in my career. 

Based on that reassessment, I have developed some postulates that will guide my future consulting work.

1. Software continues to eat the world, and AI will play a significant role. 
2. If we want more productivity, we need greater resilience in our business environments rather than efficiency.
3. Change is moving faster than ever, and it is exhausting.
4. Businesses that behave like a hierarchy will be less adaptable than those which act like a network.

I have written about these topics for years, but the pandemic clarified these thoughts. As agile coaches or scrum masters, we must educate our teams and leaders about this new reality. Taking these postulates together, we must draw a new conclusion about how the world of work needs to behave. 

First, transformation must be intentional and focused on delivering value to customers. Ultimately, customers pay the bills, and we need to get solutions to their problems into their hands sooner. Ultimately, customers pay the bills, and we need to get answers into their hands sooner. Transformation efforts that do not consider customers' needs are a waste. Wasteful transformation efforts squander the time, money, and energy of the people who generate profit for the organization. 

Next, we have focused too much on efficiency and running lean and mean organizations, which are fragile when market conditions change. SVB bank, Facebook, and Microsoft experience layoffs and financial losses when interest rates increased. Business leaders should be smart enough to exist in high or low-interest economic environments. Still, the pressures of meeting shareholder expectations meant they optimized their business for low-interest environments. Everything was perfect until interest rates increased; Microsoft has now canceled employee bonuses for the year. 

Third, top-down management is beginning to fail as productivity numbers continue to fall. According to the Harvard Business Review, the average employee struggles with ten enterprise change initiatives in 2022 compared with just two in 2016. The accelerated rate of change is exhausting the workforce and reducing productivity. If you want to know why people are quitting, they are tired because they are not getting ahead financially or professionally. Furthermore, much of the change is imposed from the top down with little say from the people doing the work, fostering resentment and resistance. Thus, it is essential that change radiate from the organization's middle to executive leadership and frontline workers. 

My ultimate conclusion is that companies must move away from the feudalistic framework and towards a more interconnected system. The current corporate management methods, such as the forced elimination of the bottom 10% of employees and stacked rankings, have only resulted in a culture of fear and mediocrity. Networked organizations are far more capable of generating lasting value than their hierarchical counterparts. General Electric, one of the most renowned conglomerates in history, is a prime example. When Jack Welch was the CEO, he created a personal empire that was not meant to last. Many of his techniques were praised by the public and the business world, but hindsight has proven that Welch's top-down style was no more than a facade. After his departure, GE was split into three separate entities and lost almost all of its value. It indicates that companies that do not rely on a single dictatorial figure are much more established and thriving in the long run.

Change management and agility are the wrong perspectives when making a global business more successful. Instead of management of change or agility, we need to deliver agility. Organizations must adapt to changing conditions, be more resilient and less efficient, become less hierarchical and recognize that people have limits and need respect. 

I will write more about this, but today I understand that for a business to be successful, it needs "Healthy Ownership" and "Agile Delivery." Anything else is last century.

Until next time.