Creating Real Organizational Agility, with Steve Denning

Innovation and leadership keynote speaker Steve Denning is the author of eight business books, including The Age of Agile (HarperCollins, 2018), which was selected by the Financial Times as one the best business books of 2018, and featured in The Economist. Denning is the former Program Director of Knowledge Management at the World Bank, where he led a major strategic change. He now works with organizations in the U.S., Europe, Asia and Australia on leadership, innovation, business agility and organizational storytelling. Denning’s innovative work has been recognized world-wide. His clients have included many Fortune 500 companies.

SPEAKING.COM: Organizational agility is a hot topic now. What are some of the most common misconceptions surrounding this topic?

DENNING: The most common misconception is to think that organizational agility comprises a process, a system, or a methodology that can be taught in a short training course and rolled out across a unit or an organization.

It doesn’t.

Organizational agility involves a different mindset from traditional management. It’s a different way of understanding and thinking about how work gets done. It involves values and attitudes that are quite different from top-down bureaucracy. Acquiring organizational agility is therefore typically neither simple nor quick.

SPEAKING.COM: What key characteristics do organizations need to succeed in the Age of Agility?

DENNING: It involves a willingness to embrace the Agile mindset and the accompanying attitudes and values of openness, curiosity, persistence, empathy and courage. This goes beyond empty HR clichés like “team spirit,” “winning,” self-actualization,” or “being number one,” where the language is often a desolate echo of genuine excellence. Instead, there needs to be a rigorous focus on solving problems and enabling people to get on with work without interruption, drawing on real expertise, removing impediments, and continuously delivering value to customers in the face of mind-boggling complexity.

SPEAKING.COM: In your book The Age of Agility, you write, “The central theme of this book – that corporations must radically reinvent how they are organized and led and embrace a new management paradigm – may seem to some readers to be extreme. It is not.” Why isn’t it extreme?

DENNING: This isn’t a management fad that was invented last Tuesday and that will be gone by Friday. It’s a permanent change to the way the organization is being run. It delivers a higher level of performance. The end result —instant, intimate, frictionless value to customers at scale— is demonstrated every day by firms like Apple and Google. Anyone with a mobile phone knows what it is like, continually experiences it, and wants more of it. So, this has become the new gold standard of corporate performance. This is what customers are expecting and demanding. Organizations that don’t progress towards delivering it won’t survive.

SPEAKING.COM: How do leaders need to rethink their roles to create a more agile management system?

DENNING: Leaders need to view their role as enablers rather than controllers. The move-by-move supervision that is natural to bureaucratic management must shift towards nurturing the organization—its structure, processes, and culture—to enable the subordinate components to function autonomously like a smoothly flowing network. It isn’t total autonomy, because the efforts of every team are linked to the organization’s goal, but it enables creative effort forces to flow throughout the entire organization. Decisions must be pushed to the lowest possible level in the organization so that teams are not waiting around for decisions or approvals from the top. They can get on with whatever is necessary to delight customers. Managers must be removing, rather than creating, impediments.

SPEAKING.COM: How does a giant corporation set in its bureaucratic ways start off the process of restructuring its paradigm?

DENNING: The first step is for the senior managers to educate themselves. Agile management is not what they were taught in business school. They need to find out what has been learned about the Agile management in organizations around the world, the reasons why it has emerged, the potential that it offers and the obstacles that implementation faces. They need to understand the deep changes involved in implementing genuine Agile management.

SPEAKING.COM: What are some ways leaders can incorporate their employees into shifting toward a more agile culture?

DENNING: Managers can start by finding out what is already being done in the way of Agile management within their own organization, even before any top-down action. Today, Agile management is now so widespread in software development that almost every organization has at least pockets of Agile management already under way, often without the knowledge of senior management. An important step therefore is for management to find the people involved in and responsible for those pockets and learn what progress is being made and what obstacles are being encountered. Those people are often the future exemplars and champions of the incipient Agile transformation journey.

SPEAKING.COM: What are some setbacks companies may face early on when reinventing their management paradigm?

DENNING: Some firms run into problems with an excessively top-down approach. Others run into problems through lack of top management support. Still others run into problems from treating Agile management as a process without the requisite mindset.

Often the most difficult step is for managers to realize that they themselves have to change. In the words of General Stan McChrystal, they have to “view effective leadership in the new environment as more akin to gardening than chess. The move-by-move control that seemed natural to military operations proved less effective than nurturing the organization… Although I recognized its necessity, the mental transition from heroic leader to humble gardener was not a comfortable one.”

SPEAKING.COM: In lieu of the setbacks, what are the long-term payoffs for companies that are working towards more agile models?

DENNING: The payoffs are survival and thrival. To put it bluntly, top-down bureaucracy simply can’t cope with today’s VUCA world—volatile, uncertain, complex and ambiguous. Instances of firms that have been disrupted because they haven’t adjusted, like General Electric, are numerous, as are the examples of firms that have made the transition, like Microsoft. The choice for most firms is simple and stark: change or die.

SPEAKING.COM: How can leaders avoid the trap of “fake agility?”

DENNING: The key to avoiding the trap of “fake agility” is to foster and embody an obsession with adding value to customers. Everyone throughout the whole organization must view everything that happens from the perspective of the impact on customers. There should be a suspicion of internally oriented processes and systems that are bureaucracy in disguise. Scaling frameworks are often a particular source of trouble.

SPEAKING.COM: What is the difference between creating value and extracting value?

DENNING: Firms whose primary goal is to maximize shareholder value as reflected in the current stock price inevitably slide towards short-changing the customer in order to transfer resources to shareholders. Ironically, this tends to undermine long-term shareholder value as the firm’s position in the marketplace suffers. By contrast, when firms are obsessed with creating value to customers, the firm’s position in the marketplace tends to prosper and gains to shareholders often follow. In effect, making money for the firm and shareholders is the result, not the goal, of the firm.

To bring innovation and leadership speaker Steve Denning to your organization, please contact Michael Frick at: Mike@Speaking.com