What must management do for a successful agile transformation? 7 tips!

Research shows that in Germany alone, half of the companies with more than 500 employees already use agile working methods and a further 15% are planning to introduce them (see Bitkom Research). 

This means that a large proportion of companies are currently undergoing or about to undergo an agile transformation, and managers are asking themselves how they can contribute to the success of it.

And that’s a good thing. We have conducted hundreds of interviews with agile companies, agile coaches and other decision makers in the context of agile transformations.

The result: the readiness of management ranks #1 as the key success factor.

According to the official test, the answer to the question of “What must management do in agile transformations?” is simple: Commit to quality and be the change agent in the system.

But what does this abstract statement mean? Here are 7 tips for you as a manager or leader.

1. Agile leadership - Agile Transformation is not a classic reorganization

Many managers are practiced in implementing regular reorganizations in their company. While there are some parallels to a classic reorganization, it is important to also understand the differences to an agile transformation.

The goal of an agile transformation should not be to reshuffle all the teams and then remain static in this form for as long as possible. On the contrary: the idea of an agile transformation is to build an organizational form that is capable of continuously developing on its own.

An agile transformation is the last top-down-driven transformation in a company.

When the agile transformation is “complete”, all teams and business units should be set up in such a way that from now on they themselves continuously develop around customer benefit.

An agile transformation is therefore much more challenging than a classic reorganization - especially when it comes to the corporate culture required for it.

By the way, a quick note in the context of agile transformation: Do you want to make sure that you are currently setting the right priorities in your agile transformation? 

Then take our maturity level check for your agile transformation - it only takes 3 minutes. You even get a benchmark based on the over three hundred other participants. See button 🙂

2. What must management do for a successful agile transformation? The right framing!

So what must management do for a successful agile transformation? Well, the right kind of communication is a success factor that applies to both classic reorganizations and agile transformations.

Many reorganizations are communicated based on Change model from Kotter This means someone plays consciously with fear to create the readiness for change. 

From a psychological point of view, one should certainly doubt that fear is the right way to initiate an agile transformation. After all, this is not about the willingness to “endure a change” - but about promoting a will to shape things.

That’s why I would like to offer a more positive framing in order to communicate agile transformations. A form of communication that inspires employees instead of frightening them. 

Answer the following questions:

• What has made us successful in the past?
  This consciously creates a positive atmosphere right at the beginning, that honors what has already been achieved.
• What has changed in the environment of the organization and what impact does this change have on us?
  It should now become clear that current developments in the market require a change for your company.
• What will change because of that? And possibly: What will not change as a result?
  This question is about the specific change, so that the company can respond to the new framework conditions. At the same time, it should be clarified what a company will keep doing (in relation to point 1).
• Why are we ready for change?
  Finally, it is worth showing that this change has already been “demanded” from the workforce. Give examples here that show that change is already taking place.

Answering these questions provides employees with the initial information they need to mentally open up for change and prepare them to shape it.

Answering the above questions in a fictitious example of a tool manufacturer might look like this:

• Over decades, our consistent focus on quality in the d.i.y.-tools sector has gained us a market position of which we can all be very proud.
• While quality is still in demand, the intelligent networking of tools is also an important factor in our customers’ purchasing decisions. We are facing an increasingly dynamic competitive environment of IoT companies here - that are currently responding to digital opportunities faster than we are.
• In order to continue offering our customers the best tools in the market for the future, we will build a software department in addition to our hardware department, which will enable us to actively shape the dynamic developments in the IoT area. For us, this also means adapting our working methods to respond to our customers’ new use cases in a more agile way.
• In the past, you as our staff have already shown that you have ideas for the further development of our products. For example, in the case of the wi-fi module, you wanted to make it ready for market more quickly than our organization could allow. Now our goal is to enable you to consistently test your ideas and implement them more quickly through the new ways of working. 

Now it’s up to you to apply this example to your business. From our point of view, the effort is worth it, because good communication will release energy for everyone involved and at the same time prevent resistance to and fear of the transformation.

3. What must management do for a successful agile transformation? Create a safe space!

As already explained in point 1, the role of teams will change drastically through an agile transformation: Every team is urged to think, to question, and to actively shape its own working environment.

For the success of this cultural change the transformation itself should embody this philosophy. One way to involve the teams in the transformation from the outset is theOpenSpace Agility”(OSA for short). 

The core idea of the process is to work out the specific changes (with the participation of all employees) in a comprehensive workshop, then to try them for 100 days and then to reflect on them again with all employees. 

Although this process is time-consuming, it directly shows everyone involved how it feels to be appreciated and to actively help shaping the company.

How exactly one creates this “safe space” for an active “co-design of the change” is up to the company, but one thing is certain: If you don’t allow the space and don’t actively involve teams in the transformation, you have a poor foundation for the self-organization and agility of the teams after the transformation.

4. Deal with uncertainties openly

In classic reorganizations, it was assumed that there was a central “transformation plan” that described all changes in detail. Anyone who has ever been part of such a top-down reorganization will know that this plan is usually extremely incomplete and many decisions only arise in the process of implementation.

In these classic reorganizations, management often had the urge to hide uncertainties in order to avoid appearing vulnerable to employees. This behavior can trigger stress, conflicts and a loss of trust by parts of the employees.

The good news: In agile transformations, uncertainties and unanswered questions are on the agenda for the teams and the driver for change. There is no expectation that management has all the answers, but management trusts in the self-organization of the teams to answer these questions on their own.

What must management do for a successful agile transformation? Do yourself a favor and openly communicate uncertainties as such. Don’t be pressured into giving answers to questions that teams can answer much better themselves.

Simple rule of thumb: In an agile transformation, you as a manager should be asking your teams more questions than giving answers.

5. Use the right kind of agile metrics

Agile transformation and change is difficult to measure. There are some “maturity models” that try to paint a comprehensive picture of the transformation. Many managers love such models because they love using clear KPIs and metrics. 

But beware: Teams also become really good over time at providing you with exactly the KPI trends you want to see.

Especially in agile transformations, where the #1 blocker is the cultural change process (see State of Agile Survey), key figures are always associated with a certain degree of fuzziness and should not become an end in themselves. 

By the way, in this blog article my colleague Christian investigated what good agile metrics are and what they look like.

What do you think happens when teams realize that they get into trouble when the values are bad and are left alone when they are good? They make sure that all the values are good. So should you simply do without KPIs? We believe - no. Some very experienced Agile Coaches themselves now say that it was a mistaketo forego agile metrics and KPIs in agile transformations.

In retrospect, I think it’s one of my biggest mistakes that I always categorically rejected metrics for agile transformation.

Marcus Raitner

In our view, agile metrics and KPIs should only ever serve as a basis for discussion and be reflected together with the teams (for example, in retrospectives). The value of conscientious measurement lies in the dialog with the teams and not in the metrics and numbers itself. What must management do for a successful agile transformation? Measure the right things!

6. What must management do for a successful agile transformation? Be realistic!

As already mentioned in point 4, there are many uncertainties that must be accepted during an agile transformation. So the expectation should be that mistakes will happen and that there will also be occasional setbacks. 

Accordingly, both the budget and the time horizon must be estimated so that teams have the latitude to respond to such failures and setbacks. 

Particularly important: In order to increase the self-efficacy of the teams, especially at the beginning, and to quickly make conflicts visible and resolve them, it is worthwhile to plan sufficient coaching capacities.

In addition, the planning itself should be regularly reviewed on the basis of new findings and, if necessary, updated. After all, agile work thrives on regularly generating new insights and incorporating them into planning. 

The regular adaptation of planning is therefore also a best practice for the transformation to agile working.

7. Agile leadership: “Walk the talk”

A very simple, but central point: The management team should live the saying “walk the talk”. From the very beginning, they themselves should work as a team in sprints - including retrospectives, dailies and so on.

This is the only way to credibly demand working with agile methods and frameworks from your own teams. And at the same time, you will benefit from a more effective way of working yourselves.

Conclusion: challenged in a new role

It has become clear that an agile transformation cannot be compared with classic reorganizations in many respects. Likewise, the role of management in these transformations is different. 

Leaders need to move away from providing all the answers themselves and empower teams to organize themselves and make decisions.