Agile Transformation? Time To 'Rehumanize' The Business
The story of extending the principles of Agile to the organization as a whole as I discussed in my article Digital Transformation Requires Enterprisewide Agile Transformation earlier this year is so powerful, I decided to run two workshops on the subject.
I presented the first workshop at no-code vendor kintone’s inaugural Connectconference in San Francisco, then headed to Orlando for Rising Media’s Building Business Capability (BBC) conference, where I ran a longer version of the same workshop entitled Agile Digital Transformation.
You can imagine my surprise, therefore, when one of the keynoters at kintone Connect presented a powerful story of transformation that aligned with mine – although he didn’t begin his story with software as I do.
The reception to my workshop at BBC, however, was quite different. While most of the audience appreciated the value and significance of Agile transformation, one of the conference luminaries thought the approach was naïve.
What, then, is the real story of Agile transformation? Is it naïve, or the inevitable organizational model for the Digital Age?
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‘Rehumanizing’ the Business
The keynoter at the kintone conference was Chuck Blakeman, author and founder of the Crankset Group. Blakeman immediately takes issue with the hierarchical organizational models that have been with us since the dawn of the Industrial Age. “Everything we’re doing in the way we’re organizing our businesses is broken,” Blakeman says. “It’s broken and we know it. We intuitively know it’s broken.”
He contrasts the role employees play in today’s industrial enterprises with the flattened organizations that came before the Industrial Revolution. “People became extensions of the machine. We just want the part of you that runs the machine,” he says. “We want you to be as much like the machine as possible.”
Instead, Blakeman calls for ‘rehumanizing’ businesses, where employees become stakeholders, and managers give way to leaders – what he calls the ‘participation age.’ “The emerging participation age people do not want to make money,” Blakeman points out (at least not entirely). “They want to make meaning.”
The key to this meaning: driving decision-making down to individuals. “The most human things you can do at work is ask questions and make decisions,” Blakeman says. “Employees do what they’re told. Stakeholders question everything.”
The most dramatic disruption within Blakeman’s vision for the participation age, perhaps, is its complete lack of managers. Instead, companies require leaders, and teams of stakeholders do their own managing. “Managers solve and decide,” Blakeman explains. “Leaders train others to solve and decide, and then they get out of the way.”
In fact, the contrast between management and leadership in Blakeman’s eyes couldn’t be starker. “Managers delegate tasks. When you delegate tasks, people feel used. Put this nut on that bolt,” Blakeman explains. “Leaders delegate responsibility. When you delegate responsibility, that creates ownership,” Blakeman continues. “Wouldn’t you like to have everybody who’s taking care of their own crap?”
Blakeman is quick to point out that organizations that take his advice to heart still have management – it’s simply something the self-organizing teams of stakeholders take care of for themselves. “Self-organized, self-managed teams. This is not chaos. This is not anarchy,” Blakeman adds. “Decisions are made where they have to be carried out.”
To assuage the skeptics, Blakeman lists numerous companies who have shown enormous success – and increased profits – by following this approach, including Whole Foods, GE Aviation, Proctor & Gamble, Pixar, NucorNUE -1.22% Steel, Patagonia, FedEx FDX +0.33% , and W. L. Gore, and many others. “These are companies that don’t have managers,” he points out.
Apparel manufacturer W. L. Gore, in fact, pioneered a flattened, manager-less organization as early as the 1950s. “10,000 people there, nobody manages anybody,” Blakeman says of W. L. Gore. “They’ve been doing this since 1958.”
The Pushback and the Business Agility Manifesto
My own flavor of Agile transformation is quite similar to Blakeman’s, as they both share an emphasis on self-organizing, self-managing teams. In the audience at my workshop at BBC was Ron Ross, Principal and Co-Founder of Business Rules Solutions, LLC, and one of the coauthors of the recently published Business Agility Manifesto, along with Roger Burlton and John Zachman.
Ross says he agrees with our definition of business agility at Intellyx: the ability to respond to change in the business environment and leverage change for competitive advantage. However, he thinks that the idea of manager-less organizations is naïve.
One of his central objections is the difference between the organizational agility that Blakeman discusses and business agility. “Talking about agility only in terms of how to compact and energize organizational structures (hierarchies), while useful and exciting, fails to address the fundamental raison d’être for companies,” Ross writes.
That raison d’être, according to Ross, is to extract value from the business’s assets, including the knowledge of its people – and in turn, this principle defines the role of management. “Put simply, management exists because the business owns assets from which value must be created,” Ross continues.
Placing business agility into the context of extracting value from assets thus focuses on the concepts and structures of the business, rather than how people work within that business. “‘Business Agility’ envisions an ability to modify dynamically the concepts and structures of the business itself for maintaining relevance in the context of a dramatically changing, complex and uncertain operational environment,” Ross, Burlton, and Zachman write in the Business Agility Manifesto.
Predictably, Ross is lukewarm toward the notion of self-organizing teams. “I get as excited as the next person about current trends in how work is best organized in digital companies,” he writes. “Those trends include…self-organizing and self-directed teams…” He then damns the approach with faint praise. “You can immerse yourself in all those trends and lead yourself to believe that business is being reinvented,” Ross continues. “In some sense yes it is, but in the most important sense, no it’s not.” (Emphasis his).
How Digital Transformation Bridges the Gap
We thus have two opposing opinions about the nature of organizations that will survive in the Digital Era: Blakeman’s human meaning-centered, ‘participation age’ worldview vs. Ross’s ‘extracting value from assets’ raison d’être for companies.
The missing link for both Ross and Blakeman is the role that technology plays within Digital Era organizations – not simply as a set of tools for the business to use, but as essential subsystems of enterprises as complex adaptive systems, alongside the human beings that represent the most important subsystems of any organization.
Such systems are, in fact, a new way of thinking about such organizations. In our research at Intellyx, we extend this theory by recognizing that business agility is an emergent property of such organizations – that is, a property of the organization as a whole that is not a property of any subsystem of the organization.
When Ross differentiates between business agility and organizational agility, therefore, he’s actually on the right track, as organizational agility applies to teams while business agility applies to the organization as a whole.
The fact that the salient subsystems of enterprises as complex systems consist of both people and technology, furthermore, is an essential insight to the discussion of Agile organizational change.
When I discuss Agile transformation, in contrast to both Blakeman and Ross, I begin with the context of Agile software development and in particular, DevOps. With DevOps, organizations have proven that self-organizing, cross-functional teams actually work – and furthermore, contribute to greater business agility overall.
Yet, while DevOps is primarily a cultural change as organizations shift to the flattened, self-managing teams Blakeman discusses, the approach is unquestionably technology-empowered.
If we step back from looking too closely at the behavior of the teams to the enterprise as a whole, then, we see a complex system that is at once customer-driven and software-empowered – in other words, a digital enterprise.
Intellyx publishes the Agile Digital Transformation Roadmap poster, advises companies on their digital transformation initiatives, and helps vendors communicate their agility stories. As of the time of writing, kintone and Rising Media are Intellyx customers, and both paid for Jason Bloomberg’s travel to their respective conferences, a standard industry practice. None of the other organizations mentioned in this article are Intellyx customers.
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