Understanding Agile - What it Means and How to Get There

Frankfurt, 13. February 2017 – In September 2016 Daimler CEO Dieter Zetsche in an interview with German newspaper FAZ publicly announced wide-reaching changes in the organizational setup and decision-making process of his company. Some news agencies reported that Daimler wanted to operate like a startup. Indeed the ideas put forward in the program “Leadership 2020” sound typical of small innovative companies: Fast decisionmaking and autonomy on the individual as well as team level. Strikingly the terms “agile” and “agility” appear in various contexts within Daimler’s change initiative. Agile is supposed to be one of the future leadership principles, and it is planned to be a feature of the organizational setup and the decision-making process. The example of Daimler shows that agile principles, primarily associated with software development and IT companies, have arrived in traditional industries and are conceived as a comprehensive concept applicable to almost all parts of an organization.

Daimler is not the only multinational manufacturing company, which has discovered agility: American industry giant General Electric is driving the change towards a digital industry provider using agile methods. John Deere, manufacturer of agrarian machinery, is using it as well. Like other “agile fans” they seem to be lured by impressive numbers: Some companies were able to reduce their project cycles by 75% after introducing agile methods, others increased speed by 200% and more. In addition, there are reports about growing employee satisfaction and motivation.

While providing a lot of advantages if used in the right context, there might be two aspects, which make agility a great fit for China. First, the agile principle of only limited planning, doing, then inspecting and adapting, seems to fit Chinese culture. Germans tend to spend much more time on making a plan before starting their work. Secondly, the ability to quickly adapt to changing market demands by allowing scope changes even in late project phases makes the agile approach attractive for companies who want to succeed in the dynamic Chinese economy.

Seven Myths about Agility

Given these positive aspects it seems natural that so many companies are interested in agile methods, tools and principles. However, it has been observed that not all of them are familiar with the methods. Some think that agile methods are only suitable for IT development. The examples above demonstrate that this first “agile myth” is not true, but there are several others.

Agile Equals Speed

Myth factor: Medium. In the Scrum framework, the iterative process ensures that after each phase of product development new features are ready for customer usage. Time-to-market usually does speed up significantly. By applying agile principles organizations may succeed fast – or fail fast if their product does not meet customers’ expectations. If they change their organizational setup and minimize interfaces by creating cross-functional teams as well as allowing self-organization to foster motivation, they realize additional speed up potential. However, managers should not expect everyone to start working twice as fast overnight. An agile approach itself also does not automatically mean shorter project durations. Capacity still matters. Since the scope is allowed to change and new features might be added during the project it might even end later than originally planned. However, since you are able to collect customer feedback early on, project success is much more likely.

In Agile Projects there is No Scope

Myth factor: Medium. Not having to define the target solution in great detail when starting to work on a problem is one of the big advantages of an agile approach. That is why it is so well suited to situations where problems are complex, customer preferences are hard to predict or change frequently, solutions are unknown and only start to emerge in the course of the process. At the beginning the team shares a high-level description, a vision or prototype of the product they are working on, iteratively adding more detailed requirements in later stages.

Agile Means Not Following a Plan

Myth factor: High. Of course planning is part of an agile project, but the focus always remains on activities. Instead of spending a lot of effort at the beginning of the process to work out a plan as detailed as possible, the team accepts that not everything can be predicted and that there will eventually be changes. Usually a highlevel strategic planning and a product roadmap exists. On a lower level, detailed planning frequently takes place. Here teams decide, which tasks have to be handled with which priority and what can be accomplished realistically until the end of the next working phase. Once the workload is fixed, adding to or changing the current plan is limited to exceptional situations. Even high-level managers usually have to wait for the next iteration if they want new requests or product ideas to be considered in the planning.

In an Agile Organization there are No Stable Teams

Myth factor: High. The scope and priorities of work in agile organizations can frequently change to meet market demands. So why not also change the teams according to what is required at any given moment? Because there are great disadvantages: Studies show that stable teams’ productivity is 60% higher compared to teams with frequently changing members. They also react better to customer feedback. Agile practices focus on learning and continuous improvement, which is harder to realize if there is a fluctuation of team members.

In Agile Organizations Managers are Obsolete

Myth factor: High. A common belief is that agile organizations are some sort of anarchy where everyone does what they want. Middle managers are sometimes told by superiors that they are no longer needed now that teams manage themselves. These executives mix up self-organization with self-management. A self-organized team decides independently how to do its work, not what to work on. The manager’s role is still important as they “lead the path” by providing goals and a vision to the team, they work on strategy and make sure resources are available, take care of personal development, do networking and function as spokespersons within the organization. Since they no longer have to control their team’s work and tell them what to do, they have more time to focus on these topics.

It is Harder to Control Quality in an Agile Setting

Myth factor: High. One of the agile principles stresses the importance of customer interaction. When using an agile approach, you want to get customer feedback early and frequently. The main goal is to be able to present a working product as soon as possible. Instead of measuring process quality and describing it in extensive documentation the quality of the outcome is key. Plus: Who is able to judge the quality of a product better than the end customers themselves?

Managing an Agile Transformation

Agile working means letting go of some traditional practices and old truths. To successfully implement agility, internal stakeholders have to understand the underlying principles as well as the reasons for change. Some areas should receive special attention when managing the transformation.

Coach & Support Teams

Agile methods consist of a simple set of rules, roles and artefacts. It does not take much time to learn how to use them in everyday work. On the other hand, they do not provide a lot of guidance. A traditional project management framework comes along with plenty of templates to fill in, which radiate security. In an agile approach like Scrum, uncertainty is accepted. Every team member has to think about how to implement product requirements instead of following a strict pattern. Teams who are used to being told what to do and how to do it, often struggle with these expectations. Some use agile tools to please their managers without deriving any benefit from them. Artefacts are created but no one in the team uses them. Other teams mix methods they are well acquainted with and agile tools, causing additional effort instead of making their work life less complicated. Situations like these can only be avoided if employees understand agile principles and start sharing agile values. This kind of mindset change takes time and can only be achieved by proper change management. It is not enough to provide one-time trainings. Each team needs to be supported in defining a collaboration model and tool set, which fits their situation and facilitates their work. It is advisable to involve a change manager or agile coach experienced in transforming organizations. This role can work with different teams by consulting and coaching them. Several organizations have good experiences with pilot teams. Instead of immediately rolling out the new concept to the whole organization, they started with one or several teams, let them collect positive insights, which they communicate to other potential adopters.

Help Managers Define their New Role

For a successful change it is essential to adopt a new leadership style. As the most direct link to employees the team lead level is especially important. In theory a lot of them embrace the idea of leading a self-organized team. They encourage their employees to develop ideas and find solutions on their own. But not all of them trust their team enough to not interfere when its members make a decision they do not agree with. A good reaction would be to ask questions and offer support but otherwise rely on the joint competence of the team and their judgement. Instead, managers tend to overrule team decisions and thereby demotivate their team members. Acceptance of failure and chances to experiment - though often preached on management level - in reality are often non-existent. Employees do not experience any positive changes in everyday life and initiative dies down.

Agile managers provide a simple set of rules, which help the team understand the joint goals and roughly define the areas in which they are allowed to make decisions without consulting superiors. Coaching helps managers to understand and embrace this new role. A coach mirrors their behavior and discusses the effects on the team. Often managers are insecure about their new role or do not know how to define it at all. Only if they develop a clear picture of their future tasks and grasp the advantages and the freedom, which comes along with managing a self-organized team, will they be fully supportive.

First published in the "German Chamber Ticker, the business magazine of the German Chamber of Commerce in China": http://china.ahk.de/gc-ticker.

Author: Steffen Schweizer, Manager at CPC Consulting (Beijing) Co., Ltd.