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801 DB # 2: What are your key takeaways from the book Agile?

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Insights You Need from
AGILE
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Insights You Need from Harvard Business Review
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­ ill you adapt or be left ­behind?
Get up to speed and deepen your understanding of the topics
that are shaping your com­pany’s ­future with the Insights You
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You ­can’t afford to ignore how ­these issues ­will transform
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­Giants
Blockchain
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Insights You Need from
AGILE
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Library of Congress Cataloging-­in-­Publication Data
Title: Agile.
Other titles: Agile (Harvard Business Review Press) | Insights you need from
Harvard Business Review.
Description: Boston, Mas­sa­chu­setts : Harvard Business Review Press, [2020] |
Series: Insights you need from Harvard Business Review | Includes index.
Identifiers: LCCN 2019046718 (print) | LCCN 2019046719 (ebook) |
ISBN 9781633698956 (paperback) | ISBN 9781633698963 (ebook)
Subjects: LCSH: Agile proj­ect management. | Business planning. | Strategic planning.
Classification: LCC HD69.P75 A396 2020 (print) | LCC HD69.P75 (ebook) |
DDC 658.4—­dc23
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eISBN: 978-1-63369-896-3
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Contents
Introduction
Agile: How to Get in the Game (and Not Get in the Way)
ix
Good intentions ­aren’t enough.
by Darrell K. Rigby
1. Agile at Scale
1
Create a truly flexible organ­ization.
by Darrell K. Rigby, Jeff Sutherland, and Andy Noble
2. Why Agile Goes Awry
29
And how to fix it.
by Lindsay McGregor and Neel Doshi
3. How to Make Sure Agile Teams Can Work Together
43
Combine—­and recombine—­essential expertise.
by Alia Crocker, Rob Cross, and Heidi K. Gardner
4. How Nextdoor Addressed Racial Profiling on
Its Platform
59
A data-­oriented approach helped the social network
recover—­quickly.
by Phil Simon
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Contents
5. HR Goes Agile
67
Agile is transforming how organ­izations hire,
develop, and manage their p­ eople.
by Peter Cappelli and Anna Tavis
6. How to Make Agile Work for the C-­Suite
93
Set the tone for your organ­ization.
by Eric Garton and Andy Noble
7. How Agile Teams Can Help Turnarounds Succeed
103
Tap the ­people who are better at ­handling variable
and unpredictable situations.
by Darrell K. Rigby, Simon Henderson, and Marco D’Avino
8. Making Pro­cess Improvements Stick
111
­Don’t let early excitement lead to backsliding.
About the Contributors
121
Index
125
viii
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Introduction
AGILE: HOW TO GET IN
THE GAME (AND NOT
GET IN THE WAY)
by Darrell K. Rigby
Ask general man­ag­ers what they know about agile, and
chances are t­ hey’ll respond with an uneasy smile and a
deflecting quip such as “just enough to be dangerous.”
They may pepper conversations with terms like “sprints”
and “time boxes,” use agile as an adjective to describe
some new initiative, and claim that their businesses
are becoming more and more nimble. But ­because they
­haven’t studied the methodology ­behind agile practices
or seen agile teams in action, they c­ ouldn’t r­ eally tell you
ix
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Introduction
what agile is all about or how it’s actually working in
their organ­ization.
What is agile? It’s a mindset and a method for improving innovation through deep customer collaboration and
adaptive testing and learning. ­Here’s how it works.
Agile teams are small, cross-­functional, fully dedicated
work groups focused on creating innovative improvements to customer products and ser­vices, the business
pro­cesses that produce them, and the technologies that
enable t­ hose pro­cesses. Each team has an “owner” who is
ultimately responsible for delivering value to customers,
and a “coach” who helps the team continuously improve
its speed, effectiveness, and happiness. Team members
break complex prob­lems into small modules and then
start building working versions of potential solutions in
short cycles (less than a month) known as sprints. The
pro­cess is transparent to every­one. Team members hold
brief daily “stand-up” meetings to review pro­gress and
identify roadblocks. They resolve disagreements through
experimentation and feedback rather than endless debates or appeals to authority. They test small working
prototypes of part or all of the offering with a few customers for short periods of time. If customers get excited,
a prototype may be released immediately, even if some
se­nior executive i­ sn’t a fan, or o
­ thers think it needs more
bells and whistles. The team then brainstorms ways to
x
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Introduction
improve ­future cycles and prepares to attack the next top
priority.
When general man­ag­ers lack this foundational understanding, their everyday ways of working make adoption of agile—­and eventual success—­nearly impossible.
­These man­ag­ers launch countless initiatives with urgent deadlines instead of assigning the highest priority
to two or three. They spread themselves and their best
­people across too many proj­ects rather than concentrating every­one’s energy on full-­time, focused teams. Many
man­ag­ers become overly involved in the work of proj­
ect teams. They routinely overturn team decisions and
add review layers and controls, trying (usually in vain)
to keep ­mistakes from being repeated but, in the meantime, hampering the speed of innovation. With the best
of intentions, they erode the benefits that agile innovation can deliver.
Sound familiar? Too many companies suffer from too
much bureaucracy and not enough innovation. Their
organ­izations are un­balanced. Bureaucratic pro­cesses
originally designed to make successful practices repeatable and scalable have taken over. They have created
static business systems—­systems that are incapable of
adapting to dynamic markets.
The solution to this prob­lem already exists in thousands
of companies. Trou­ble is, it’s often hidden inside IT,
xi
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Introduction
whose techniques and terminology already intimidate
other departments. But the IT folks are onto something:
agile has revolutionized technology development over
the last 30 years. According to a 2018 survey by the website Stack Overflow, 85% of software developers use agile
techniques in their work. Agile increases team productivity and employee satisfaction. It minimizes the waste
inherent in redundant meetings, repetitive planning,
excessive documentation, quality defects, and low-­value
product features. By improving visibility and continually adapting to customers’ changing priorities, agile
boosts customer engagement and satisfaction, brings the
most valuable products and features to market faster and
more predictably, and reduces risk. When agile engages
team members from multiple disciplines as collaborative
peers, it broadens orga­nizational experience and builds
mutual trust and re­spect.
Results like ­these are now driving agile into more
functions and industries. Digital natives such as Amazon,
Google, Microsoft, Netflix, Riot Games, and Spotify have
led the way in scaling agile across a wide range of innovation activities. John Deere, the farm-­
equipment
manufacturer, has used agile methods to develop new
machinery. Mission Bell Winery has used them for every­
thing from wine production to warehousing. C. H. Robinson, a global third-­party logistics provider, has applied
xii
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Introduction
them in ­human resources. The list goes on. OpenView
has used agile to run its venture capital fund; USAA, to
transform its customer ser­vice; and 3M, to run a major
merger integration. Bosch—­a global supplier of technology and ser­vices with more than 400,000 associates—­has
­adopted agile princi­ples to guide a step-­by-­step reshaping
of the com­pany, including every­thing from supply-­chain
management and product development to marketing
and strategic planning.
How can your com­pany or team take advantage of
agile? This book ­will help you in two ways. If your organ­
ization is adopting or expanding agile practices, it ­will
give you the baseline understanding you need to join in
the conversation. It w
­ ill demystify the concept and build
a strong foundation for ­future learning. At the same
time, it w
­ ill enable you to avoid being an impediment.
Sure, agile is sometimes accompanied by off-­putting jargon (scrum, kanban), indecipherable acronyms (FROCC,
MoSCoW), and zealots who often overstate both its uses
and its benefits. At root, though, agile is a s­ imple, practical approach to innovation that ­every man­ag­er can
master—­and actually enjoy.
To support agile teams, general man­ag­ers may need to
adapt ele­ments of the business’s operating model. They
have a lot of levers at their disposal: clarifying ambitions;
changing leadership styles and cultures; redefining roles
xiii
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Introduction
and decisions rights; changing planning, bud­geting, and
reviewing systems; revamping hiring and talent management systems; and increasing the agility of business
pro­cesses and technologies. Organ­ization structures may
need to change as well. Deciding which tools to deploy, in
what sequence, and to what degree requires considerable
testing, learning, balancing, and customization.
Agile is not a panacea. It is most effective and easiest
to implement where the prob­lem to be solved is complex;
solutions are initially unknown, and product requirements ­will most likely change; the work can be modularized; and close collaboration with end users (and
rapid feedback from them) is feasible. ­These conditions
exist for many product development functions, marketing proj­ects, strategic-­planning activities, supply-­chain
challenges, and resource allocation decisions. They are
less common in routine operations such as plant maintenance, purchasing, sales calls, and accounting.
The greatest impediment to agile success is not the
need for better methodologies, more evidence of significant benefits, or proof that agile can work outside IT. It
is the mindset and be­hav­ior of man­ag­ers and executives.
­Those who learn to lead agile’s extension into a broader
range of business activities ­
will accelerate profitable
growth. This book provides a ­great start.
xiv
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Introduction
Further Reading
If you want to dig deeper and further your understanding of
agile, I recommend the following titles:
­Doing Agile Right: Transformation Without Chaos, by
Darrell Rigby, Sarah Elk, and Steve Berez
(Boston: Harvard Business Review Press, 2020).
Multipliers, Revised and Updated: How the Best Leaders Make Every­one Smarter, by Liz Wiseman (New York:
HarperBusiness, 2017).
The Phoenix Proj­ect: A Novel About IT, DevOps, and
Helping Your Business Win, 5th anniversary ed., by Gene
Kim, Kevin Behr, and George Spafford (Portland, OR:
IT Revolution Press, 2018).
The Princi­ples of Product Development Flow: Second
Generation Lean Product Development, by Donald G.
Reinertsen (Redondo Beach, CA: Celeritas Publishing,
2009).
Scrum: The Art of D
­ oing Twice the Work in Half the
Time, by Jeff Sutherland (New York: Crown Publishing
Group, 2014).
(continued)
xv
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Introduction
Time, Talent, Energy: Overcome Orga­nizational Drag
and Unleash Your Team’s Productive Power, by
­Michael C. Mankins (Boston: Harvard Business Review
Press, 2017).
xvi
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Insights You Need from
AGILE
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1
AGILE AT SCALE
by Darrell K. Rigby, Jeff Sutherland, and Andy Noble
B
y now most business leaders are familiar with
agile innovation teams. Th
­ ese small, entrepreneurial groups are designed to stay close to customers
and adapt quickly to changing conditions. When implemented correctly, they almost always result in higher
team productivity and morale, faster time to market,
better quality, and lower risk than traditional approaches
can achieve.
Naturally, leaders who have experienced or heard
about agile teams are asking some compelling questions.
What if a com­pany ­were to launch dozens, hundreds, or
even thousands of agile teams throughout the organ­
ization? Could w
­ hole segments of the business learn to
1
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Rigby, Sutherland, and Noble
operate in this manner? Would scaling up agile improve
corporate per­for­mance as much as agile methods improve individual team per­for­mance?
In ­
today’s tumultuous markets, where established
companies are furiously battling assaults from startups
and other insurgent competitors, the prospect of a fast-­
moving, adaptive organ­ization is highly appealing. But
as enticing as such a vision is, turning it into a real­ity can
be challenging. Companies often strug­gle to know which
functions should be reor­ga­nized into multidisciplinary
agile teams and which should not. And it’s not unusual
to launch hundreds of new agile teams only to see them
bottlenecked by slow-­moving bureaucracies.
We have studied the scaling up of agile at hundreds
of companies, including small firms that run the entire
enterprise with agile methods; larger companies that,
like Spotify and Netflix, ­were born agile and have become more so as ­they’ve grown; and companies that,
like Amazon and USAA (the financial ser­vices com­pany
for the military community), are making the transition
from traditional hierarchies to more-­agile enterprises.
Along with the many success stories are some disappointments. For example, one prominent industrial com­
pany’s attempts over the past five years to innovate like a
lean startup have not yet generated the financial results
2
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Agile at Scale
sought by activist investors and the board of directors,
and several se­nior executives recently resigned.
Our studies show that companies can scale up agile
effectively and that ­doing so creates substantial benefits.
But leaders must be realistic. Not e­ very function needs
to be or­ga­nized into agile teams; indeed, agile methods
­a ren’t well suited to some activities. Once you begin
launching dozens or hundreds of agile teams, however,
you ­can’t just leave the other parts of the business alone.
If your newly agile units are constantly frustrated by bureaucratic procedures or a lack of collaboration between
operations and innovation teams, sparks w
­ ill fly from
the orga­nizational friction, leading to meltdowns and
poor results. Changes are necessary to ensure that the
functions that d
­ on’t operate as agile teams support the
ones that do.
Leading Agile by Being Agile
For anyone who ­isn’t familiar with agile, ­here’s a short review. Agile teams are best suited to innovation—­that is,
the profitable application of creativity to improve products and ser­vices, pro­cesses, or business models. They
are small and multidisciplinary. Confronted with a large,
3
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Rigby, Sutherland, and Noble
complex prob­lem, they break it into modules, develop
solutions to each component through rapid prototyping
and tight feedback loops, and integrate the solutions into
a coherent ­whole. They place more value on adapting to
change than on sticking to a plan, and they hold themselves accountable for outcomes (such as growth, profitability, and customer loyalty), not outputs (such as lines
of code or number of new products).
Conditions are ripe for agile teams in any situation
where prob­lems are complex, solutions are at first unclear, proj­ect requirements are likely to change, close collaboration with end users is feasible, and creative teams
­will outperform command-­and-­control groups. Routine
operations such as plant maintenance, purchasing, and
accounting are less fertile ground. Agile methods caught
on first in IT departments and are now widely used in
software development. Over time they have spread into
functions such as product development, marketing, and
even HR. (See “Embracing Agile,” HBR, May 2016, and
“HR Goes Agile,” HBR, March–­April 2018, which appears in chapter 5.)
Agile teams work differently from chain-­of-­command
bureaucracies. They are largely self-­governing: Se­nior
leaders tell team members where to innovate but not
how. And the teams work closely with customers, both
external and internal. Ideally, this puts responsibility for
4
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Agile at Scale
innovation in the hands of t­ hose who are closest to customers. It reduces layers of control and approval, thereby
speeding up work and increasing the teams’ motivation.
It also ­frees up se­nior leaders to do what only they can do:
create and communicate long-­term visions, set and sequence strategic priorities, and build the orga­nizational
capabilities to achieve t­ hose goals.
When leaders ­
haven’t themselves understood and
­adopted agile approaches, they may try to scale up agile
the way they have attacked other change initiatives:
through top-­down plans and directives. The track rec­
ord is better when they behave like an agile team. That
means viewing vari­ous parts of the organ­ization as their
customers—­people and groups whose needs differ, are
prob­ably misunderstood, and ­will evolve as agile takes
hold. The executive team sets priorities and sequences
opportunities to improve ­those customers’ experiences
and increase their success. Leaders plunge in to solve
prob­lems and remove constraints rather than delegate
that work to subordinates. The agile leadership team,
like any other agile team, has an “initiative owner” who
is responsible for overall results and a facilitator who
coaches team members and helps keep every­one actively
engaged.
Bosch, a leading global supplier of technology and ser­
vices with more than 400,000 associates and operations
5
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Rigby, Sutherland, and Noble
in 60-­plus countries, took this approach. As leaders began
to see that traditional top-­down management was no
longer effective in a fast-­moving, globalized world, the
com­pany became an early adopter of agile methods. But
dif­fer­ent business areas required dif­fer­ent approaches,
and Bosch’s first attempt to implement what it called a
“dual organ­ization”—­one in which hot new businesses
­were run with agile teams while traditional functions
­were left out of the action—­compromised the goal of a
holistic transformation. In 2015 members of the board of
management, led by CEO Volkmar Denner, de­cided to
build a more unified approach to agile teams. The board
acted as a steering committee and named Felix Hieronymi, a software engineer turned agile expert, to guide
the effort.
At first Hieronymi expected to manage the assignment the same way Bosch managed most proj­ects: with
a goal, a target completion date, and regular status reports to the board. But that approach felt inconsistent
with agile princi­ples, and the com­pany’s divisions ­were
just too skeptical of yet another centrally or­ga­nized program. So the team shifted gears. “The steering committee turned into a working committee,” Hieronymi told
us. “The discussions got far more interactive.” The team
compiled and rank-­ordered a backlog of corporate priori-
6
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Agile at Scale
ties that was regularly updated, and it focused on steadily
removing companywide barriers to greater agility. Members fanned out to engage division leaders in dialogue.
“Strategy evolved from an annual proj­ect to a continuous
pro­cess,” Hieronymi says. “The members of the management board divided themselves into small agile teams
and tested vari­ous approaches—­some with a ‘product
owner’ and an ‘agile master’—to tackle tough prob­lems
or work on fundamental topics. One group, for instance,
drafted the 10 new leadership princi­ples released in 2016.
They personally experienced the satisfaction of increasing speed and effectiveness. You ­can’t gain this experience by reading a book.” T
­ oday Bosch operates with a
mix of agile teams and traditionally structured units. But
it reports that nearly all areas have ­adopted agile values,
are collaborating more effectively, and are adapting more
quickly to increasingly dynamic marketplaces.
Getting Agile Rolling
At Bosch and other advanced agile enterprises, the visions are ambitious. In keeping with agile princi­ples,
however, the leadership team ­doesn’t plan ­every detail
in advance. Leaders recognize that they do not yet know
7
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Rigby, Sutherland, and Noble
how many agile teams they w
­ ill require, how quickly
they should add them, and how they can address bureaucratic constraints without throwing the organ­
ization
into chaos. So they typically launch an initial wave of
agile teams, gather data on the value ­those teams create
and the constraints they face, and then decide ­whether,
when, and how to take the next step. This lets them
weigh the value of increasing agility (in terms of financial
results, customer outcomes, and employee per­for­mance)
against its costs (in terms of both financial investments
and orga­nizational challenges). If the benefits outweigh
the costs, leaders continue to scale up agile—­deploying
another wave of teams, unblocking constraints in less
agile parts of the organ­ization, and repeating the cycle.
If not, they can pause, monitor the market environment,
and explore ways to increase the value of the agile teams
already in place (for instance, by improving the prioritization of work or upgrading prototyping capabilities)
and decrease the costs of change (by publicizing agile
successes or hiring experienced agile enthusiasts).
To get started on this test-­and-­learn cycle, leadership
teams typically employ two essential tools: a taxonomy
of potential teams and a sequencing plan reflecting the
com­pany’s key priorities. Let’s first look at how each can
be employed and then explore what more is needed to
tackle large-­scale, long-­term agile initiatives.
8
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Agile at Scale
Create a taxonomy of teams
Just as agile teams compile a backlog of work to be accomplished in the f­uture, companies that successfully
scale up agile usually begin by creating a full taxonomy
of opportunities. Following agile’s modular approach,
they may break the taxonomy into three components—­
customer experience teams, business pro­cess teams, and
technology systems teams—­and then integrate them.
The first component identifies all the experiences that
could significantly affect external and internal customer
decisions, be­hav­iors, and satisfaction. Th
­ ese can usually
be divided into a dozen or so major experiences (for example, one of a retail customer’s major experiences is to
buy and pay for a product), which in turn can be divided
into dozens of more-­specific experiences (the customer
may need to choose a payment method, use a coupon,
redeem loyalty points, complete the checkout pro­cess,
and get a receipt). The second component examines the
relationships among ­these experiences and key business
pro­cesses (improved checkout to reduce time in lines, for
instance), aiming to reduce overlapping responsibilities
and increase collaboration between pro­cess teams and
customer experience teams. The third focuses on developing technology systems (such as better mobile-­checkout
9
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Rigby, Sutherland, and Noble
apps) to improve the pro­cesses that w
­ ill support customer
experience teams.
The taxonomy of a $10 billion business might identify
anywhere from 350 to 1,000 or more potential teams.
­Those numbers sound daunting, and se­nior executives
are often loath even to consider so much change. (“How
about if we try two or three of ­these ­things and see how it
goes?”) But the value of a taxonomy is that it encourages
exploration of a transformational vision while breaking
the journey into small steps that can be paused, turned, or
halted at any time. It also helps leaders spot constraints.
Once y­ ou’ve identified the teams you could launch and
the sorts of p
­ eople you would need to staff them, for instance, you need to ask: Do we have ­those p
­ eople? If so,
where are they? A taxonomy reveals your talent gaps and
the kinds of p
­ eople you must hire or retrain to fill them.
Leaders can also see how each potential team fits into the
goal of delivering better customer experiences.
USAA has more than 500 agile teams up and r­ unning
and plans to add 100 more in 2018. The taxonomy is fully
vis­i­ble to every­one across the enterprise. “If you d
­ on’t
have a ­really good taxonomy, you get redundancy and
duplication,” COO Carl Liebert told us. “I want to walk
into an auditorium and ask, ‘Who owns the member’s
change-­of-­address experience?’ And I want a clear and
confident response from a team that owns that experi10
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Agile at Scale
ence, w
­ hether a member is calling us, logging in to our
website on a laptop, or using our mobile app. No finger-­
pointing. No answers that begin with ‘It’s complicated.’ ”
USAA’s taxonomy ties the activities of agile teams to the
­people responsible for business units and product lines.
The goal is to ensure that man­ag­ers responsible for specific
parts of the P&L understand how cross-­functional teams
­will influence their results. The com­pany has se­nior leaders who act as general man­ag­ers in each line of business
and are fully accountable for business results. But t­ hose
leaders rely on customer-­focused, cross-­organizational
teams to get much of the work done. The com­pany also
depends on technology and digital resources assigned
to the experience ­owners; the goal ­here is to ensure that
business leaders have the end-­to-­end resources to deliver
the outcomes they have committed to. The intent of the
taxonomy is to clarify how to engage the right p
­ eople
in the right work without creating confusion. This kind
of link is especially impor­tant when hierarchical orga­
nizational structures do not align with customer be­
hav­iors. For example, many companies have separate
structures and P&Ls for online and offline operations—­
but customers want seamlessly integrated omnichannel experiences. A clear taxonomy that launches the
right cross-­organizational teams makes such alignment
pos­si­ble.
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Rigby, Sutherland, and Noble
Sequence the transition
Taxonomy in hand, the leadership team sets priorities and sequences initiatives. Leaders must consider
multiple criteria, including strategic importance, bud­get
limitations, availability of p
­ eople, return on investment,
cost of delays, risk levels, and interdependencies among
teams. The most impor­tant—­a nd the most frequently
overlooked—­are the pain points felt by customers and
employees on the one hand and the organ­ization’s capabilities and constraints on the other. Th
­ ese determine the
right balance between how fast the rollout should proceed and how many teams the organ­ization can h
­ andle
si­mul­ta­neously.
A few companies, facing urgent strategic threats
and in need of radical change, have pursued big-­bang,
everything-­at-­once deployments in some units. For example, in 2015 ING Netherlands anticipated rising customer
demand for digital solutions and increasing incursions
by new digital competitors (“fintechs”). The management
team de­cided to move aggressively. It dissolved the orga­
nizational structures of its most innovative functions,
including IT development, product management, channel management, and marketing—­essentially abolishing
every­one’s job. Then it created small agile “squads” and
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Agile at Scale
required nearly 3,500 employees to reapply for 2,500 redesigned positions on t­hose squads. About 40% of the
­people filling the positions had to learn new jobs, and all
had to profoundly change their mindset.
But big-­
bang transitions are hard. They require
total leadership commitment, a receptive culture, enough
talented and experienced agile prac­
ti­
tion­
ers to staff
­hundreds of teams without depleting other capabilities,
and highly prescriptive instruction manuals to align
every­one’s approach. They also require a high tolerance
of risk, along with contingency plans to deal with unexpected breakdowns. ING continues to iron out wrinkles
as it expands agile throughout the organ­ization.
Companies short on ­those assets are better off rolling
out agile in sequenced steps, with each unit matching the
implementation of opportunities to its capabilities. At the
beginning of its agile initiative, the advanced technology
group at 3M Health Information Systems launched 8 to
10 teams ­every month or two; now, two years in, more than
90 teams are up and ­running. 3M’s Corporate Research
Systems Lab got started ­later but launched 20 teams in
three months.
What­ever the pace or endpoint, results should begin
showing up quickly. Financial results may take a while—­
Jeff Bezos believes that most initiatives take five to seven
years to pay dividends for Amazon—­but positive changes
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Rigby, Sutherland, and Noble
in customer be­hav­ior and team prob­lem solving provide
early signs that initiatives are on the right track. “Agile
adoption has already enabled accelerated product deliveries and the release of a beta application six months e­ arlier
than originally planned,” says Tammy Sparrow, a se­nior
program man­ag­er at 3M Health Information Systems.
Division leaders can determine the sequencing just
as any agile team would. Start with the initiatives that
offer potentially the greatest value and the most learning. SAP, the enterprise software com­pany, was an early
scaler of agile, launching the pro­cess a de­cade ago. Its
leaders expanded agile first in its software development
units—­a highly customer-­centric segment where they
could test and refine the approach. They established a
small consulting group to train, coach, and embed the
new way of working, and they created a results tracker
so that every­one could see the teams’ gains. “Showing
concrete examples of impressive productivity gains from
agile created more and more pull from the organ­ization,”
says Sebastian Wagner, who was then a consulting man­
ag­er in that group. Over the next two years the com­pany
rolled out agile to more than 80% of its development
organ­izations, creating more than 2,000 teams. ­People
in sales and marketing saw the need to adapt in order
to keep up, so ­those areas went next. Once the front end
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Agile at Scale
of the business was moving at speed, it was time for the
back end to make the leap, so SAP shifted its group working on internal IT systems to agile.
Too many companies make the ­mistake of ­going for
easy wins. They put teams into offsite incubators. They
intervene to create easy workarounds to systemic obstacles. Such coddling increases the odds of a team’s success, but it d
­ oesn’t produce the learning environment
or orga­nizational changes necessary to scale dozens or
hundreds of teams. A com­pany’s early agile teams carry
the burden of destiny. Testing them, just like testing any
prototype, should reflect diverse, realistic conditions.
Like SAP, the most successful companies focus on vital
customer experiences that cause the greatest frustrations
among functional silos.
Still, no agile team should launch ­unless and ­until it is
ready to begin. Ready ­doesn’t mean planned in detail and
guaranteed to succeed. It means that the team is:
• Focused on a major business opportunity with a lot
at stake
• Responsible for specific outcomes
• Trusted to work autonomously—­guided by clear
decision rights, properly resourced, and staffed
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Rigby, Sutherland, and Noble
with a small group of multidisciplinary experts
who are passionate about the opportunity
• Committed to applying agile values, princi­ples,
and practices
• Empowered to collaborate closely with customers
• Able to create rapid prototypes and fast feedback
loops
• Supported by se­nior executives who w
­ ill address impediments and drive adoption of the team’s work
Following this checklist w
­ ill help you plot your sequence for the greatest impact on both customers and
the organ­ization.
Master large-­scale agile initiatives
Many executives have trou­ble imagining that small agile
teams can attack large-­scale, long-­term proj­ects. But in
princi­ple ­there is no limit to the number of agile teams
you can create or how large the initiative can be. You can
establish “teams of teams” that work on related initiatives—an approach that is highly scalable. Saab’s aeronautics business, for instance, has more than 100 agile
teams operating across software, hardware, and fuselage
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Agile at Scale
for its Gripen fighter jet—­a $43 million item that is certainly one of the most complex products in the world. It
coordinates through daily team-­of-­teams stand-­ups. At
7:30 a.m. each frontline agile team holds a 15-­minute
meeting to flag impediments, some of which cannot be
resolved within that team. At 7:45 the impediments requiring coordination are escalated to a team of teams,
where leaders work to ­either ­settle or further escalate
issues. This approach continues, and by 8:45 the executive action team has a list of the critical issues it must
resolve to keep pro­g ress on track. Aeronautics also
coordinates its teams through a common rhythm of
three-­week sprints, a proj­ect master plan that is treated
as a living document, and the colocation of traditionally disparate parts of the organ­ization—­for instance,
putting test pi­lots and simulators with development
teams. The results are dramatic: IHS Jane’s has deemed
the Gripen the world’s most cost-­
effective military
aircraft.
Building Agility Across the Business
Expanding the number of agile teams is an impor­tant
step ­toward increasing the agility of a business. But
equally impor­tant is how ­those teams interact with the
17
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Rigby, Sutherland, and Noble
rest of the organ­ization. Even the most advanced agile
enterprises—­Amazon, Spotify, Google, Netflix, Bosch,
Saab, SAP, Salesforce, Riot Games, Tesla, and SpaceX,
to name a few—­operate with a mix of agile teams and
traditional structures. To ensure that bureaucratic functions ­don’t hamper the work of agile teams or fail to
adopt and commercialize the innovations developed by
­those teams, such companies constantly push for greater
change in at least four areas.
Values and princi­ples
A traditional hierarchical com­pany can usually accommodate a small number of agile teams sprinkled around
the organ­ization. Conflicts between the teams and conventional procedures can be resolved through personal
interventions and workarounds. When a com­
pany
launches several hundred agile teams, however, that
kind of ad hoc accommodation is no longer pos­si­ble.
Agile teams ­will be pressing ahead on e­ very front. Traditionally structured parts of the organ­ization w
­ ill fiercely
defend the status quo. As with any change, skeptics can
and w
­ ill produce all kinds of antibodies that attack agile,
ranging from refusals to operate on an agile timetable
(“Sorry, we c­ an’t get to that software module you need
18
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Agile at Scale
for six months”) to the withholding of funds from big
opportunities that require unfamiliar solutions.
So a leadership team hoping to scale up agile needs to
instill agile values and princi­ples throughout the enterprise, including the parts that do not or­ga­nize into agile
teams. This is why Bosch’s leaders developed new leadership princi­ples and fanned out throughout the com­pany:
They wanted to ensure that every­one understood that
­things would be dif­fer­ent and that agile would be at the
center of the com­pany’s culture.
Operating architectures
Implementing agile at scale requires modularizing and
then seamlessly integrating workstreams. For example,
Amazon can deploy software thousands of times a day
­because its IT architecture was designed to help developers make fast, frequent releases without jeopardizing the
firm’s complex systems. But many large companies, no
­matter how fast they can code programs, can deploy software only a few times a day or a week; that’s how their
architecture works.
Building on the modular approach to product development pioneered by ­Toyota, Tesla meticulously designs
interfaces among the components of its cars to allow each
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Rigby, Sutherland, and Noble
module to innovate in­de­pen­dently. Thus the bumper
team can change anything as long as it maintains stable
interfaces with the parts it affects. Tesla is also abandoning traditional annual release cycles in ­favor of real-­time
responses to customer feedback. CEO Elon Musk says
that the com­pany makes about 20 engineering changes a
week to improve the production and per­for­mance of the
Model S. Examples include new battery packs, updated
safety and autopi­lot hardware, and software that automatically adjusts the steering wheel and seat for easier
entry and exit.
In the most advanced agile enterprises, innovative
product and pro­cess architectures are attacking some of
the thorniest orga­nizational constraints to further scaling. Riot Games, the developer of the wildly successful multiplayer online b
­ attle arena League of Legends,
is redesigning the interfaces between agile teams and
support-­and-­control functions that operate conventionally, such as facilities, finance, and HR. Brandon Hsiung,
the product lead for this ongoing initiative, says it involves at least two key steps. One is shifting the functions’
definition of their customers. “Their customers are not
their functional bosses, or the CEO, or even the board of
directors,” he explains. “Their customers are the development teams they serve, who ultimately serve our players.”
The com­pany instituted Net Promoter surveys to collect
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Agile at Scale
feedback on w
­ hether t­ hose customers would recommend
the functions to o
­ thers and made it plain that dissatisfied
customers could sometimes hire outside providers. “It’s
the last t­ hing we want to happen, but we want to make
sure our functions develop world-­class capabilities that
could compete in a f­ ree market,” Hsiung says.
Riot Games also revamped how its corporate functions
interact with its agile teams. Some members of corporate
functions may be embedded in agile teams, or a portion
of a function’s capacity may be dedicated to requests from
agile teams. Alternatively, functions might have ­little formal engagement with the teams a­ fter collaborating with
them to establish certain bound­aries. Says Hsiung: “Silos
such as real estate and learning and development might
publish philosophies, guidelines, and rules and then say,
‘­Here are our guidelines. As long as you operate within
them, you can go crazy; do what­ever you believe is best
for our players.’ ”
In companies that have scaled up agile, the organ­
ization charts of support functions and routine operations generally look much as they did before, though
often with fewer management layers and broader spans
of control as supervisors learn to trust and empower
­people. The bigger changes are in the ways functional
departments work. Functional priorities are necessarily
more fully aligned with corporate strategies. If one of the
21
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Rigby, Sutherland, and Noble
com­pany’s key priorities is improving customers’ mobile
experience, that ­can’t be number 15 on finance’s funding list or HR’s hiring list. And departments such as ­legal
may need buffer capacity to deal with urgent requests
from high-­priority agile teams.
Over time even routine operations with hierarchical
structures are likely to develop more-­agile mindsets. Of
course, finance departments w
­ ill always manage bud­gets,
but they d
­ on’t need to keep questioning the decisions
of the o
­ wners of agile initiatives. “Our CFO constantly
shifts accountability to empowered agile teams,” says
Ahmed Sidky, the head of development management at
Riot Games. “­He’ll say, ‘I am not h
­ ere to run the finances
of the com­pany. You are, as team leaders. I’m ­here in an
advisory capacity.’ In the day-­to-­day organ­ization, finance partners are embedded in e­ very team. They d
­ on’t
control what the teams do or ­don’t do. They are more like
finance coaches who ask hard questions and provide deep
expertise. But ultimately it’s the team leader who makes
decisions, according to what is best for Riot players.”
Some companies, and some individuals, may find t­ hese
trade-­offs hard to accept and challenging to implement.
Reducing control is always scary—­until you do so and
find that ­people are happier and success rates ­triple. In
a Bain survey of nearly 1,300 global executives, more respondents agreed with this statement about management
22
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Agile at Scale
than with any other: “­Today’s business leaders must trust
and empower ­people, not command and control them.”
(Only 5% disagreed.)
Talent acquisition and motivation
Companies that are scaling up agile need systems for acquiring star players and motivating them to make teams
better. (Treat your stars unfairly, and they w
­ ill bolt to a
sexy startup.) They also need to unleash the wasted potential of more-­typical team members and build commitment, trust, and joint accountability for outcomes.
­There’s no practical way to do this without changing HR
procedures. A com­pany can no longer hire purely for
expertise, for instance; it now needs expertise combined
with enthusiasm for work on a collaborative team. It c­ an’t
evaluate ­people according to w
­ hether they hit individual
objectives; it now needs to look at their per­for­mance on
agile teams and at team members’ evaluations of one another. Per­for­mance assessments typically shift from an
annual basis to a system that provides relevant feedback
and coaching ­every few weeks or months. Training and
coaching programs encourage the development of cross-­
functional skills customized to the needs of individual
employees. Job titles m
­ atter less and change less frequently
23
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Rigby, Sutherland, and Noble
with self-­governing teams and fewer hierarchical levels.
­Career paths show how product o
­ wners—­the individuals
who set the vision and own the results of an agile team—­
can continue their personal development, expand their
influence, and increase their compensation.
Companies may also need to revamp their compensation systems to reward group rather than individual accomplishments. They need recognition programs that
celebrate contributions immediately. Public recognition
is better than confidential cash bonuses at bolstering
agile values—it inspires recipients to improve even further, and it motivates ­others to emulate the recipients’
be­hav­iors. Leaders can also reward “A” players by engaging them in the most vital opportunities, providing them
with the most advanced tools and the greatest pos­si­ble
freedom, and connecting them with the most talented
mentors in their field.
Annual planning and bud­geting cycles
In bureaucratic companies, annual strategy sessions
and bud­get negotiations are power­ful tools for aligning
the organ­ization and securing commitments to stretch
goals. Agile prac­ti­tion­ers begin with dif­fer­ent assumptions. They see that customer needs change frequently
24
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Agile at Scale
and that breakthrough insights can occur at any time. In
their view, annual cycles constrain innovation and adaptation: Unproductive proj­ects burn resources ­until their
bud­gets run out, while critical innovations wait in line
for the next bud­get cycle to compete for funding.
In companies with many agile teams, funding procedures are dif­fer­ent. Funders recognize that for two-­
thirds of successful innovations, the original concept
­will change significantly during the development pro­
cess. They expect that teams ­will drop some features and
launch ­others without waiting for the next annual cycle.
As a result, funding procedures evolve to resemble ­those
of a venture cap­i­tal­ist. VCs typically view funding decisions as opportunities to purchase options for further
discovery. The objective is not to instantly create a large-­
scale business but, rather, to find a critical component
of the ultimate solution. This leads to a lot of apparent
failures but accelerates and reduces the cost of learning. Such an approach works well in an agile enterprise,
vastly improving the speed and efficiency of innovation.
. . .
Companies that successfully scale up agile see major
changes in their business. Scaling up shifts the mix of
work so that the business is ­doing more innovation relative to routine operations. The business is better able to
25
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Rigby, Sutherland, and Noble
read changing conditions and priorities, develop adaptive
solutions, and avoid the constant crises that so frequently
hit traditional hierarchies. Disruptive innovations ­will
come to feel less disruptive and more like adaptive business as usual. The scaling up also brings agile values and
princi­ples to business operations and support functions,
even if many routine activities remain. It leads to greater
efficiency and productivity in some of the business’s big
cost centers. It improves operating architectures and
orga­nizational models to enhance coordination between
agile teams and routine operations. Changes come on
line faster and are more responsive to customer needs.
Fi­nally, the business delivers mea­sur­able improvements
in outcomes—­not only better financial results but also
greater customer loyalty and employee engagement.
Agile’s test-­and-­learn approach is often described as
incremental and iterative, but no one should m
­ istake incremental development pro­cesses for incremental thinking. SpaceX, for example, aims to use agile innovation to
begin transporting ­people to Mars by 2024, with the goal
of establishing a self-­sustaining colony on the planet.
How w
­ ill that happen? Well, p
­ eople at the com­pany ­don’t
­really know . . . ​yet. But they have a vision that it’s pos­
si­ble, and they have some steps in mind. They intend to
dramatically improve reliability and reduce expenses,
partly by reusing rockets much like airplanes. They in26
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Agile at Scale
tend to improve propulsion systems to launch rockets
that can carry at least 100 ­people. They plan to figure out
how to refuel in space. Some of the steps include pushing
current technologies as far as pos­si­ble and then waiting
for new partners and new technologies to emerge.
That’s agile in practice: big ambitions and step-­by-­step
pro­gress. It shows the way to proceed even when, as is so
often the case, the f­ uture is murky.
TAKEAWAYS
Once ­you’ve seen what agile can do, you’ll want to incorporate it into more parts of your organ­ization. How do
you know which functions should be reor­ga­nized into
multidisciplinary agile teams and which should not?
And how can you launch several new teams without creating bottlenecks or being hampered by bureaucracy?
Take t­ hese steps to ensure a successful scaling up at your
organ­ization:
✓ ­Don’t just create agile teams; integrate agile method-
ologies and values into your work, such as viewing
dif­fer­ent parts of your organ­ization as customers.
27
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Rigby, Sutherland, and Noble

Create a taxonomy of opportunities to set
priorities.

Break workstreams into modules for seamless
integration.

Take a VC-­like approach to funding when it’s time
to begin your annual bud­geting pro­cess.
Reprinted from Harvard Business Review, May–­June 2018 (product #R1803F).
28
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2
WHY AGILE
GOES AWRY
by Lindsay McGregor and Neel Doshi
I
n the spirit of becoming more adaptive, organ­izations
have rushed to implement agile software development.
But many have done so in a way that actually makes
them less agile. Th
­ ese companies have become agile in
name only, as the pro­cess ­they’ve put in place often ends
up hurting engineering motivation and productivity.
29
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McGregor and Doshi
Agile Software Development
Frameworks for adaptive software development like agile
have been around for a long time and have manifested
in many forms. But at the heart of most of ­these models
are two t­hings: forming hypotheses (for example, what
is a feature supposed to accomplish?) and collaborating
across domains of expertise on experiments, all in the
spirit of driving learning and not careening down a path
that proves to be incorrect.
When Agile was born in 2001, it articulated a set of
four critical princi­ples to elevate the craft of software development and improve engineering and product man­
ag­er motivation.
1. Individuals and interactions over pro­cesses and
tools
2. Working software over comprehensive
documentation
3. Customer collaboration over contract negotiation
4. Responding to change over following a plan
In our research on h
­ uman motivation, we have analyzed the practices of engineers across over 500 dif­fer­ent
30
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Why Agile Goes Awry
organ­izations using a combination of survey-­based and
experimental approaches. We’ve found that what happens
in practice wildly departs from t­ hese stated princi­ples.
For example, in common practice, pro­cesses and tools
have become the driver of work, not individuals and interactions. In one large Fortune 100 com­pany, the head of
digital products said to us, “­We’re not allowed to question the agile pro­cess.” In another Fortune 500 organ­
ization, product man­ag­ers and engineers communicated
exclusively through their tools, which ­were used primarily for the former to issue commands to the latter.
Similarly, documentation often trumps working software. In one large tech com­pany, its product team focused
significant up-­front time writing small requirements
(called “user stories”). Th
­ ese requirements w
­ ere put into
a ticket queue as tasks for the next available engineer to
start working on. The bar for documentation to keep
the queue moving became high. Ultimately, this pro­cess
became one of many small “waterfalls,” where work is
passed from a product department to designers to engineering. This pro­cess is exactly what agile was meant to
eliminate. It is no won­der that the CTO of this com­pany
said, “My engineers feel like short-­order cooks in the
back of a diner.”
When it comes to “responding to change over following a plan,” this often gets misinterpreted to mean
31
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McGregor and Doshi
“­don’t have a plan.” For example, in one fast-­growing tech
com­pany, the agile teams did not try to understand the
broader strategy of the organ­ization. As a result, their
attempts to iterate often focused on low-­value or strategically unimportant features. Without a plan, teams w
­ on’t
know how to prioritize actions, and how to invest in ­those
actions responsibly. This princi­ple has gone so far as to let
engineers believe that it is not appropriate to have time
boxes or common milestones.
It would be one ­thing if ­these misapplications actually improved engineering motivation and per­for­mance,
but we have found that in practice, the opposite happens.
Agile, when practiced as ­we’ve described, reduces the total
motivation of engineers. B
­ ecause ­they’re not allowed to
experiment, manage their own work, and connect with
customers, they feel ­little sense of play, potential, and
purpose; instead they feel emotional and economic pressure to succeed, or inertia. They stop adapting, learning,
and putting their best efforts into their work.
For example, one venture capital partner shared with
us a story of how a video game development com­pany
continued to build a product for a year, despite ­every engineer feeling like the game was not worth playing. The
com­pany realized it wasted a lot of time and money.
Agile pro­cesses go awry, ­because as companies strive
for high per­for­mance, they become ­either too tactical
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Why Agile Goes Awry
(focusing too much on pro­cess and micromanagement)
or too adaptive (avoiding long-­term goals, timelines, or
cross-­functional collaboration).
The key is balancing both tactical and adaptive per­
for­mance. ­Whether ­you’re an engineer or product man­
ag­er, ­here are a few changes to consider for finding this
balance, so you can improve your engineering (or any)
team’s motivation and per­for­mance.
Software Development Should Be a
No-­Handoff, Collaborative Pro­cess
Rather than a pro­cess where one person writes requirements (even small ones) while another executes them, all
without a guiding strategic North Star, a team striving
for true agility should have a no-­handoff pro­cess versus a
pro­cess where one person writes requirements while the
other executes them. In a no-­handoff pro­cess, the product man­ag­er and the engineers (and any other stakeholders) are collaborative partners from beginning to end in
designing a feature.
First the team, including executives, should articulate
the team’s strategic challenges. Challenges take the form
of a question, always focused on improving some kind of
customer outcome or impact. Think of them as a team’s
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McGregor and Doshi
detailed mission in question form to trigger expansive
thinking. The challenges themselves are developed and
iterated by the w
­ hole team, including its executive sponsors (and customers). E
­ very single person on the team (or
any team for that ­matter) is asked to contribute ideas to
each challenge whenever they want.
For example, in one bank, a challenge was, “How can
we help customers be better prepared for pos­si­ble financial shocks?” Another was, “How can we make it more
fun and less of a chore for customers to maintain healthy
financial habits?” ­These challenges produced dozens of
ideas from many dif­fer­ent ­people.
Then, instead of someone writing requirements while
another person executes, t­hese teams develop and mature an idea collaboratively, from rough draft to testable
hypothesis.
The Team’s Unit of Delivery Should Be
Minimally ­Viable Experiments
Teams often find they waste time by adapting too much.
To avoid this, not only should ideas be formed for a strategic challenge, they should also be executed with fast
experiments aimed at learning just enough to know what
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Why Agile Goes Awry
works for customers. Teams should be maximizing their
“speed to truth.”
In order to reduce wasted effort and increase the team’s
decision rights, experiments should be short in nature. If
pos­si­ble, an experiment should be no longer than a week.
Sometimes this requires the team to minimize a feature to what is absolutely needed to test its weakest assumption. Sometimes it means that the team d
­ oesn’t code
but instead completes an offline experiment through
research.
The Team’s Approach Should
Be Customer-­Centric
The pro­cess of building software (even internal-­use software) should be squarely customer-­centric.
At the simplest, ­these princi­ples should cover the
following:
• Challenges are always framed around customer
impact.
• Problem-­solving meetings always start with a customer update, and representatives from the front
line are included frequently in ­these discussions.
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McGregor and Doshi
• ­Every experiment is built around a customer-­
centric hypothesis. That way, the team can hold
itself accountable to the outcome predicted by the
experiment.
However, even more impor­tant is that engineers see
with their own eyes how customers use their products.
This requires the frontline reps and the engineers working
together to see if the product is creating customer impact.
Use Time Boxes to Focus
Experimentation and Avoid Waste
Interestingly, adaptive software development encourages
time boxes as a way to ensure an experiment is given the
investment that is justified and to signal the acceptable
quality level of a given feature. On the other hand, typical agile prac­ti­tion­ers avoid time boxes or deadlines, for
fear that the deadline w
­ ill be used to create emotional
pressure. One of the worst feelings for a software developer is spending a few months working on something
that ends up being not useful. This fills you with emotional pressure (“I let every­one down”) and a sense of inertia (“Why am I even d
­ oing this?”).
To avoid this outcome, be clear about how far an engineer should go before checking to see if the direction
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Why Agile Goes Awry
is still correct. The greater the uncertainty on a team’s
hypothesis, and the greater the risk, the shorter that runway should be. With that in mind, the time box i­sn’t a
deadline. It is a constraint that should guide the level of
depth and quality for an experiment before a real test. In
this way, time boxes can increase total motivation.
The Team Should Be Or­ga­nized to
Emphasize Collaboration
To make sure you end up with a no-­handoff pro­cess, the
vari­ous stakeholders involved should function as a single
cross-­functional team, also known as a pod. The goal of the
pod is to drive collaboration. Each pod should contain
the full set of experts needed to deliver a ­great product.
This may include se­nior executives. In one organ­ization,
for example, product pods include a product man­ag­er, a
front-­end engineer, a back-­end engineer, a designer, a quality engineer, and part-­time repre­sen­ta­tion from customer
ser­vice, and a se­nior executive from a control function.
In many organ­izations, ­there are telltale signs of “faux”
pods—­teams that call themselves pods but ­don’t actually
operate that way. Signs of faux pods include:
• Experts are in separate, aligned teams, not the
same team. For example, a product team has
37
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McGregor and Doshi
dedicated engineering “sprint teams.” ­These are
not pods.
• The team uses tools that prevent real collaboration.
For example, when we asked one engineering
team’s members why they chose the agile software
tools they ­were using, they said, “­These tools w
­ ill
prevent executives from engaging in our work.”
All this does is perpetuate a cycle of mistrust.
• Engineering and product functions actually have
dif­fer­ent goals from the top. Executives in both
functions use their hierarchical power to get their
­people to prioritize the function’s goals above all
­others, including their pod’s goals. Th
­ ese conflicts
ultimately result in clashes in the working teams
that prevent true teamwork.
• Rigidly hierarchical talent pro­cesses, like per­for­
mance ratings, hierarchical titles, pressure to get
promoted, and up-­or-­out systems, destroy the teamwork required to make pods function well. Th
­ ese
systems ­will ­either make team members more beholden to their boss than their team’s customer or
put team members in competition with each other.
­Either way, they ­will not function as a team.
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Why Agile Goes Awry
The stronger an organ­ization’s silos, the more p
­ eople
­will solve for the needs of their silo versus the needs of
their team. This makes collaboration and consensus very
difficult to achieve without constant escalation.
The Team Should Constantly Question
Its Pro­cess
A famous maxim of engineering design is known as
Conway’s law. It states that any organ­ization that designs
a system w
­ ill produce a design whose structure is a copy of
the organ­ization’s communication (that is, pro­cess) structure. Basically, if ­you’re a monolithic organ­ization, you’ll
produce monolithic designs. If y­ ou’re or­ga­nized by user
segments, your product w
­ ill optimize for that structure.
If you want to defeat Conway’s law, the better practice
is to constantly adjust your structure and pro­cesses to
suit the prob­lem at hand. This requires teams that have
­simple, lightweight pro­cesses and structures that they
constantly question and tweak.
Thus, rather than creating agile as a religion that cannot
be questioned, engineering teams should be in the habit
of constantly diagnosing and iterating their own team’s
operating model. In the best examples w
­ e’ve seen, on a
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McGregor and Doshi
monthly basis, teams diagnose their operating model and
decide if it needs changing to produce a better product.
. . .
The ability to attract, inspire, and retain digital product
talent is becoming mission critical for organ­izations. Most
have fallen prey to a s­ imple message—­implement agile as
a series of ceremonies and every­thing gets better. Unfortunately, this is often not the case when the h
­ uman side
of the equation is lost. By getting back to the basics of
motivation and adaptive per­for­mance, you can build an
organ­ization that is truly agile.
TAKEAWAYS
In the rush to become more adaptive, some companies
have implemented agile in a way that actually makes them
less agile, like misinterpreting “responding to change over
following a plan” to mean “we d
­ on’t need a plan.” To be
agile in more than name only:

Develop a no-­handoff pro­cess where the product
man­ag­er, engineers, and other stakeholders collaborate from beginning to end.
40
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Why Agile Goes Awry

Create teams that contain the full set of experts
needed to deliver on your goal—­from se­nior executives to part-­time customer ser­vice reps.

Focus on short experiments (no longer than a
week) to reduce wasted effort and increase the
team’s decision rights.

Keep customers at the center of every­thing—­from
observing them using products to starting ­every
meeting with customer updates.

Use time boxes to guide the level of depth and
quality for experiments.
Reprinted from hbr​.­org, originally published October 1, 2018 (product #H04KA0).
41
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3
HOW TO MAKE SURE
AGILE TEAMS CAN
WORK TOGETHER
by Alia Crocker, Rob Cross, and Heidi K. Gardner
I
ncreasing volatility, uncertainty, growing complexity,
and ambiguous information (VUCA) have created a
business environment in which agile collaboration is
more critical than ever. Organ­izations need to be continually on the lookout for new market developments
and competitive threats, identifying essential experts
and nimbly forming and disbanding teams to help tackle
those issues quickly. However, ­
­
these cross-­
functional
groups often bump up against misaligned incentives,
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Crocker, Cross, and Gardner
hierarchical decision making, and cultural rigidities, causing pro­gress to stall or action to not be taken at all.
Consider the case of an organ­ization in our consortium, the Connected Commons, that uncovered a
groundbreaking audiovisual technology that would differentiate the organ­ization in existing channels but also
had the potential to open up entirely new markets. The
CEO heralded it as a pivot point in growth and formed
a cross-­functional initiative of 100-­plus top employees to
bring it to new commercial channels. Yet, unfortunately,
pro­gress did not match expectations. Employees assigned
to the effort strug­gled to make time for the work. They
often did not understand the expertise or values of dif­
fer­ent functions and advocated too aggressively for their
own solutions. The group was surprised several times by
the demands of external stakeholders. Despite this proj­
ect’s visibility, critical mandate, and groundbreaking technology, the organ­ization was ultimately hindered when it
came to agile collaboration. This story is not unique.
A significant part of the prob­lem is that work occurs
through collaboration in networks of relationships that
often do not mirror formal reporting structures or standard work pro­cesses. Intuitively, we know that the collaborative intensity of work has skyrocketed, and that
collaborations are central to agility. Yet most organ­izations
­don’t manage internal collaboration productively and as44
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How to Make Sure Agile Teams Can Work Together
sume that technology or formal org charts can yield agility. Th
­ ese efforts often fail ­because they lack informal
networks—­for example, employees who share an interest
in a technological innovation like artificial intelligence
or a passion for environmental sustainability, and who
can bridge the organ­ization’s entrepreneurial and operational systems by bringing cutting-­edge ideas to ­people
who have the resources to begin experimenting and implementing them.
Our research focuses on agility not as a broad ideal but,
rather, on where agility ­matters most—at the point of execution, where teams are working on new products, strategic initiatives, or with top clients. All of t­ hese points of
execution are essential for organ­izations, yet all encounter
inefficiencies ­unless t­hey’re managed as a network. We
assessed ­these strategically impor­tant groups in a wide
range of global organ­izations via network surveys, which
­were completed by more than 30,000 employees. We also
conducted hundreds of interviews with both workers and
leaders in t­hese companies. We found that agility at the
point of execution is typically created through group-­
level networks such as account or new product development teams formed with employees drawn from the ­whole
organ­ization, lateral networks across core work pro­cesses,
temporary teams and task forces formed to drive a critical orga­nizational change or respond to a strategic threat,
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Crocker, Cross, and Gardner
and communities of practice that enabled organ­izations to
enjoy true benefits of scale. ­These and other lateral networks provide agility when they are nurtured along four
dimensions—­managing the center of the network, engaging the fringe, bridging select silos, and leveraging boundary spanners. Leaders who nurture their internal networks
in this way produce better outcomes—­financial, strategic,
and talent-­related. Figure 3-1 shows how.
Managing the Network’s Center
When agility is viewed through a network lens, it becomes
apparent that collaboration is never equally distributed.
We typically see that 20%–35% of valuable collaborations
come from only 3%–5% of employees. Through no fault
of their own, t­hese p
­ eople become overly relied upon
and tend to slow group responsiveness, despite working
to their wits’ end. They are more likely to burn out and
leave the com­pany, creating network gaps, which then
become another barrier to agility. Se­nior leaders need to
consider where overload on the network’s center might
preclude agile collaboration and:
• Encourage overwhelmed employees to redistribute collaborative work in conjunction with their man­ag­
ers. Groundbreaking work from the Institute for
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Source: Alia Crocker et al.
Leverage the
network’s edge
Information
exchanges
Frequent
collaborators
Key
Employees
Sales
Manufacturing
Engineering
Make external
connections
Know and utilize the
network’s center
Bridge silos where
collaboration matters
Ask yourself if ­you’re identifying networks’ centers, leveraging their edges, bringing silos together, and making external connections.
To manage collaboration, pay attention to four points of execution
F I G U R E 3 -1
Crocker, Cross, and Gardner
Corporate Productivity found that acknowledging
and shifting collaborative demands in this way is a
practice that’s three times more likely to be found
in high-­performing organ­izations than in ­those
with lower per­for­mance.1
• Understand how employees have ended up in the
­center—and if it is a result of formal position or
personal characteristics, then take the corrective
actions necessary to reduce overload. For example,
­simple shifts in a few be­hav­iors can yield as much
as 1­ 8%–24% more time for collaboration.2 Such
be­hav­iors include managing meetings more efficiently, creating an effective climate of email use,
blocking time in calendars for reflective work, negotiating role demands, and avoiding triggers that
lead us all to jump in on proj­ects or meetings when
we ­shouldn’t, to name just a few.
• Map the interdependencies between dif­fer­ent teams where
your central players contribute, in order to understand and plan for potential risks. When a star sits
at the center of multiple proj­ects, a surprise shock
in one team can create nasty ­ripples well beyond
the jolted team. Be sure team leaders have a backup
plan to cover t­ hese emergencies.
48
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How to Make Sure Agile Teams Can Work Together
Engaging the Network’s Fringe Players
Agility requires the integration of dif­fer­ent capabilities
and perspectives to understand VUCA issues and figure
out what kinds of experts are needed to tackle them. But
­those who see the world differently or who are new to
a group often languish at the network edges. Whereas
­those in the center may be overrelied on, t­hose on the
fringes are often not tapped in a way that allows for agile
collaboration. For example, our research shows that it can
take three to five years for a newcomer to replicate the connectivity of a high performer.3 Few organ­izations provide
such luxury of time, however: our research also shows that
if an experienced hire ­doesn’t get integrated into substantive proj­ects within the first year, they are seriously at risk
of leaving before they reach the three-­year mark.
Getting ­others to trust fringe employees is essential
for drawing them into agile collaboration. Their competence i­ sn’t usually in question if you have rigorous hiring
and merit-­based promotion pro­cesses; the trick is getting o
­ thers to trust their motives (“­Will he take undue
credit?” or “­Will she walk away with my clients?”) if few
colleagues can vouch for their character. Se­nior management can help by taking the following actions:
49
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Crocker, Cross, and Gardner
• Create a “hidden gems” program to help unearth high-­
potential but overlooked experts who could take some
of the burden off overworked central players. Role
model this be­hav­ior by, for example, ­assigning
an up-­a nd-­comer to co-­lead a high-­status
initiative.
• Help t­ hose on the fringe to create “pull” for their work.
Instead of pushing expertise on ­others across the
network, t­ hese employees need to be seen as a strategic resource to be pulled into opportunities. This
is done by identifying mutual value and matching
capabilities from the fringe to needs across the
network.
• Pair newcomers and network influencers through staffing
or mentoring. This ­simple practice ­triples newcomer
connectivity compared to ­those who do not get this
experience.
• Create inclusive and trusting environments to facilitate agile
collaboration. A culture of fear exists when employees do not feel safe to come forward with ideas,
and ­those on the fringe may be less confident about
contributing. High-­performing organ­izations are
2.5 times more likely to facilitate an environment
of safe communication.4
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How to Make Sure Agile Teams Can Work Together
Bridging Select Silos
­ very organ­ization we studied strug­gled with silos across
E
functions, expertise, geography, level, and cultures—­
whether occupational or national. The network lens can
help uncover specific points that, if crossed, could yield
agility benefits, rather than inefficiently bridging all silos.
Often, this means connecting p
­ eople across units or geographies d
­ oing similar work to yield benefits of scale or
identifying points where integrating dif­fer­ent perspectives
yields agile innovation. This type of multidisciplinary collaboration produces higher revenues and profits ­because
it tackles higher-­value prob­lems. Motivating experts to
engage in agile collaboration requires them not only to
identify and appreciate knowledge from other silos but
also to be willing to give up some control and autonomy
over a proj­ect’s direction. Se­nior leaders can help motivate experts with the following actions:
• Set specific goals and reward agile collaboration. Our research found that, compared to lower-­performing
organ­izations, high-­performance organ­izations
are three to five times more likely to reward collaboration,5 motivating employees to move beyond
silos. Our studies of firms that use peer feedback to
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Crocker, Cross, and Gardner
e­ ffectively identify and celebrate agile collaborators
show that ­these bottom-up pro­cesses often uncover
excellent ­people whom the formal per­for­mance reviews might other­wise overlook.
• Use data and analytics to understand where silos exist, in
order to unlock pos­si­ble agile collaboration. In one study,
we found discrepancies in connections between
headquarters and affiliates, and poor collaboration
between engineering and sales. This insight produced the business case for holding brainstorming
sessions to build connections and improve communication. A data-­driven approach is not only
more accurate and less biased than relying on
individuals’ perceptions, but also more convincingly demonstrates the quantifiable upside for agile
collaboration.
• Identify experts scattered across silos and key cross-­points
in the firm for agile collaboration. Set up communities
of practice or business development initiatives to
help share expertise or resources. For example,
many business ser­vice firms are prompting professionals who serve customers in similar industries
such as insurance or biotech to meet informally
and share sector insights and leads. The well-­
connected professionals act as bridges to and from
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How to Make Sure Agile Teams Can Work Together
silos. Some firms have successfully tasked high-­
potential employees with tracking the evolving
expertise in adjacent departments, which has to
be a dynamic pro­cess, definitely not a knowledge
­database. ­These employees should be recognized for
identifying ­opportunities to use cross-­silo knowledge. Exchange programs or rotational programs
can help ­here, too.
Spanning External Bound­aries
Agility thrives when employees understand their organ­
ization within the broader ecosystem and continually
scan for market developments that pose ­either threats or
opportunities. ­Doing so requires dynamic knowledge of
external bodies such as competitors, customers, regulators, and expertise communities or associations. ­Those
who span the boundary between internal and external actors can solve prob­lems in unique ways, ­because they can
access knowledge from ­these dif­fer­ent worlds. They can
also facilitate agile collaboration by efficiently integrating disparate viewpoints and creating multistakeholder
solutions, but they need to be properly empowered, managed, and resourced in order to do so. Se­nior man­ag­ers
can facilitate this by d
­ oing the following:
53
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Crocker, Cross, and Gardner
• Identify and enlist boundary spanners to help tackle v­ exing
prob­lems. ­People who connect the organ­ization
with its ecosystem can propose plans that can be
feasibly implemented, since they have access to the
shortest informational paths in the network and
legitimacy in the broader environmental context.
• Nurture relationships and promote the exchange of informa-
tion by organ­izing forums or special events that convene key
players from across the ecosystem. This approach helps
to create more p
­ eople in your organ­ization who
are capable of functioning as bridges to external
­parties, and it provides insights on pain points and
opportunities in the ecosystem.
• Promote connectivity to key external stakeholders. High-­
performing organ­izations are 2.5 times more likely
to encourage interaction with external stakeholders
such as clients, suppliers, regulatory bodies, or professional associations.6 Se­nior man­ag­ers should require employees who are well connected internally to
work on external connections, or suggest that t­ hose
who are well connected externally mentor ju­nior employees in networking to ensure boundary spanning.
Managing ­these collaborative players as part of a
network can help organ­izations be more agile. Although
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How to Make Sure Agile Teams Can Work Together
agile collaboration requires continual reassessment of
complex prob­lems, it is pos­si­ble for firms to combine and
recombine essential expertise from across points in the
network to address VUCA issues. By steadily nurturing
agile collaboration, se­nior management can more effectively and more efficiently access the necessary depth of
expertise of key collaborators within the organ­ization.
TAKEAWAYS
Collaboration is central to agility, yet most work is done
by combinations of colleagues that ­don’t report up the
same formal ladder or share standard pro­cesses. To enjoy
true benefits of scale, networks drawn from employees
across core work and temporary teams should nurture
themselves by:

Mapping interdependencies between teams to understand and plan for potential risks

Drawing in fringe players by creating a “hidden
gems” program to help unearth high-­potential
but overlooked experts; matching capabilities to
needs across the network; pairing newcomers
55
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Crocker, Cross, and Gardner
and network influencers through staffing or
mentoring; and creating inclusive and trusting
environments

Connecting p
­ eople ­doing similar work by setting
specific goals and rewarding collaboration; using
data and analytics to understand where silos exist;
and establishing communities of practice to share
expertise and resources

Staying vigilant about overload, considering where
it might hinder collaboration and redistributing
work accordingly

Understanding your organ­ization within the
broader ecosystem and scanning for market developments that pose threats or opportunities
NOTES

-­overload​/­.
3. Connected Commons, “Connect and Adapt—­Improving Retention and Engagement in First Five Years,” video, 2019, https://­
56
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How to Make Sure Agile Teams Can Work Together
connectedcommons​.­com​/­connect​-­and​-­adapt​-­improving​-­retention​
-­and​-­engagement​-­in​-­first​-­five​-­years​-­v ideo​/­.
4. Institute for Corporate Productivity, “Purposeful Collaboration: The Essential Components of Collaborative Cultures.”
5. Ibid.
6. Ibid.
Adapted from content posted on hbr​.­org, May 15, 2018 (product #H04BXH).
57
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4
HOW NEXTDOOR
ADDRESSED RACIAL
PROFILING ON ITS
PLATFORM
by Phil Simon
O
n March 3, 2015, hyperlocal social network Nextdoor announced that it had raised $110 million in
venture capital. The deal valued the com­pany at
more than $1 billion—­revered, unicorn status. It had to
be a giddy moment for CEO Nirav Tolia and cofound­ers
David Wiesen, Prakash Janakiraman, and Sarah Leary.
59
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Simon
But just three weeks l­ater, all of that celebrating must
have seemed like a distant memory.
The news site Fusion ran an article explaining how
Nextdoor “is becoming a home for racial profiling.”1
Reporter Pendarvis Harshaw detailed how presumably
white members w
­ ere using Nextdoor’s crime and safety
forum to report “suspicious” activities by African Americans and Latinos. Jennifer Medina of the New York Times
followed up, reporting that “as Nextdoor has grown, users
have complained that it has become a magnet for racial
profiling, leading African-­American and Latino residents
to be seen as suspects in their own neighborhoods.”2
As I discuss in my book Analytics: The Agile Way, how
Nextdoor responded illustrates not only the importance
of reacting quickly in a crisis but the usefulness of a
data-­driven, agile approach.
The Response
Agile teams benefit from dif­fer­ent perspectives, skills,
and expertise, so the cofound­ers assembled a small, diverse
team to tackle the issue. Members included product head
Maryam Mohit, communications director Kelsey Grady,
a product man­ag­er, a designer, a data scientist, and ­later
a software engineer.
60
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