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Agile leadership – buzzword or future trend?

There is currently no getting around the topic of "agility" - and it is particularly worthwhile to turn the agile gaze to the topic of "leadership". Because agile leadership combines methods and values, process management and people management, techniques and ideas. In our free whitepaper, we devote ourselves entirely to the topic of agility and answer the question of why agile leadership can only work with an agile corporate culture.

Buzzword or future trend?

Buzzword agility

The buzzword ‘agile’ has been a trend in project management for years. Having gained a foothold there, it now dominates other areas of the company as well. Agile employees, agile leaders, and complete agile enterprises are riding high. However, it is often not clear what agility actually means. Flexibility in thinking, flat hierarchies, employee participation, a project planning technique from IT or a basic philosophy of any corporate management in the 21st century?

Agile leadership in particular is not infrequently a miracle: Doesn’t agility mean that teams lead themselves? So what does it actually mean to talk about agile leadership? We show what agility means, how agile leadership can be thought of, what advantages and disadvantages it has, and which companies should think about using it.

Origins of the agility trend

To understand how agile methods became as important as they are today, a brief look at the past is needed. The decisive milestone in the development of agile methods was marked by the publication of the agile manifesto in 2001. On less than one A4 page, 17 software developers formulated their findings from 20 years of process management in the IT industry (Manifesto 2001). Even then, their demands were by no means new. Rather, they gathered insights from management principles gleaned since the 1980s from Japanese methods such as kaizen, total quality management, and their U.S. adaptations such as lean management (Medinilla 2012). What does that mean?

Toyota was one of the original companies of lean management. The central idea behind his production philosophy, developed since the 1950s, was to constantly improve one’s own processes and never to be satisfied with the current state. Perfection was the goal that could never be achieved, but always had to be strived for. This was made possible by implementing a high degree of flexibility in the work processes and supplementing it with an orientation toward long-term corporate goals. Many of these ideas can also be found in agile work processes. However, one important principle was still missing at that time: the radical orientation of the company to customer requirements.

Customer orientation

Customer orientation is important for all companies. But it was the agile manifesto that elevated an uncompromising fixation on what customers want to its highest principle. This can be achieved if customers are not first consulted about the use of finished products, but are firmly integrated into the product development process. Wherever no real customers can make themselves available for this full-time job, employees take over their roles. The well-known
SCRUM system is probably the best known model that works with such role assignments.

The example of Toyota shows that the triumph of agile methods began many decades ago. But it was not until the agile manifesto that the principles and ideas, which until then had often only been applied in the automotive industry, became known to a broad public. Starting in the IT industry, they found their way into the organizational routines of many companies. In terms of content, however, they initially remained limited to the task for which they were proposed in the manifesto: the efficient execution of project management.

Many of the agile concepts like SCRUM, Kanban, XP or Lean Development focus on this. They are optimized for implementation in small teams and make it possible to translate communicative proximity and daily interaction into work processes that can be expected to produce the best possible results. Despite their focus on task distribution in small teams, however, they are based on comprehensive ideas. This makes them components of an entire culture of economic activity. Beyond all the detailed technical process solutions, it is these broad principles of governance that are at the core of agile leadership (Wong 2021).

Agility in the corporate culture

The process methods of agile teamwork have a huge advantage, which is also a dangerous disadvantage: they can be formalized and thus implemented relatively easily. In this way, they suggest that agile working is a question of method. In reality, however, process organization is completely incomprehensible and certainly even an efficiency guzzler if it is not accompanied by an agile corporate culture, because: Agility is primarily a question of values and attitudes and only in the second step a collection of methods and process flows. El Haddad and Bonnet (2020) show in an impressive single case study of a technology company how much money can be wasted by incorrectly implemented agile methods.

The cultural dimension of agile cannot be overestimated because all agile practices are built on a set of core beliefs. In this context, agile values must reflect the core of a company’s cultural self-image. The methods are only the variable form through which these values are realized. Although methods and values ultimately complement each other, the method is a result of the values – and not vice versa. That is why agility is based on an organizational culture and not on procedures. This realization is critical if agile leadership is to succeed.

Agile leadership

The management goals formulated in the agile manifesto were based on the structures of small, interdisciplinary IT teams of programmers, testers and analysts. But: How can these processes, developed for IT teams of six to nine members, be transferred to other industries and to entire companies?

Despite the long history of agile methods, an answer to this question is not easy if it is not to be wrong in one of two ways. It is wrong, first, when it suggests simply applying SCRUM, Kanban, XP, Crystal, or any of the other techniques to all processes, even if a company is not developing software or any products at all. It is also wrong if the techniques and procedures for small teams are simply scaled up to organizations with several hundred or thousand employees. To avoid both mistakes, the path must lead through the normative core of agility, as emphasized in the third chapter. Because agile leadership always combines both aspects: Methods and values, process management and people management, techniques and ideas. However, the values have priority.

The agile core values include: Customer orientation, task accomplishment in inter-functional teams, close personal exchange, frequent feedback, manageable work steps, measurable goals, tolerance of mistakes, willingness to change. In agile contexts, entrepreneurial work consists of interaction between customers and teams on the one hand, and between team members on the other. Like all good teams, agile teams are made up of specialists who themselves know best how to complete tasks to achieve their goals. Leading teams in the 21st century is not about guiding their members (Koning 2019). The belief that a leader would be the smartest person of all once underlay the leadership theory of the ‘great man’ (Great Man Theory) until it was empirically disproved in the 1940s.

Leading as a manager

However, a manager should be really good at one thing: leading. Team leadership means giving the team the freedom and opening up the opportunities so that each team member can perform to the best of their ability. This includes strengthening the team internally, for example by growing trust between team members. And it means protecting the team externally and ensuring it has a space for action in which the best solutions can be developed, tried out and, if necessary, discarded. An agile team leader can be a team’s idea generator, facilitator, motivator, or coach, depending on the situation. Leading agile teams requires at least as much curiosity, willingness to experiment, and willingness to learn from the team leader as from the team members. Only then can the interests of the team members, the skills of the team leadership and the tasks of the team come into convergence. As Monika Henn (2018) rightly points out, this includes sensitivity to behavioral differences between the sexes.

Different leadership styles

Agile leadership thus means enabling teams to work independently and in a radically customer-centric way (Campbell 2020). For larger companies, this means reorganizing the level of middle management and also handing over its tasks to the responsibility of teams. This is because all tasks within a company can be the responsibility of groups instead of individuals. Then each individual team member always takes responsibility for the team’s results. Responsibility does not erode. This is also important in a fault-tolerant and experimental working environment, because it is the only way to trigger concrete learning processes that ensure that the same mistakes are not made again.

Leadership in agile environments thus has similarities to newer leadership styles such as transformational leadership, authentic leadership or servant leadership. Above all, servant leadership can help to get to the heart of the meaning of agile leadership, as Eilers et al. (2020) demonstrate in their study. In these newer concepts of leadership, leaders are not seen as dominators or commanders, but as supporters. They enable their employees and teams to perform at their best by providing them with what they need. Depending on the situation, these can be free spaces, fields of experimentation, inspiration and motivation, but also order and structure, rules, trust or control. More generally, leaders promote and safeguard corporate culture when employees join or leave, and especially when things get stressful and unhealthy habits might creep in.

Instruments and management techniques

The tools available to agile leaders to guide their teams through the challenging tasks of a complex and highly dynamic environment are as diverse as the situations in which they are needed. Therefore, the following tools and leadership techniques are only examples that need to be adapted and modified for real teams as desired. The initiative for this must come from the agile leader, who must closely align his or her leadership style with the needs and maturity of his or her team members. In their study with teams from Robert Bosch GmbH, Spiegler et al. (2021) found that agile leaders in the role of a Scrum Master used nine different leadership styles to guide their agile team. Depending on the maturity of their team, they purposefully changed their leadership style to bring the team closer and closer to their self-management competence.

The most important focus point of agile working is the customers. Understanding them and satisfying their needs is essential for agile teams. Agile leaders can support their teams in this task by helping them. Systematically record the nature and frequency of their customer contacts and ask how successful those contacts were. Key value indicators (KVI) are helpful in giving team members an orientation about their performance beyond customer contacts. They are more important than the otherwise popular key performance indicators (KPIs). KVI is measured by the increase in value that customers generate for the company. Here, not only the turnover of a customer should be considered, but also the number of customer contacts of a team, the reach of social communication of customers or the number of positive feedbacks.

Agile leadership

Since agile leadership relies heavily on employees’ self-leadership skills, approaches from coaching can also play an important role. The idea of asking powerful and inspiring questions forms a way to stimulate growth and change through inspiration in team members. Conventional paths must always be questioned and put up for disposition in order to try something new, which may be a better fit for the teams’ goals or processes. In this way, team processes turn into incubators of new ideas that improve or even completely replace previous ideas. Gren et al. (2017) were able to show that team maturity is a crucial variable for the success of agile techniques. Therefore, they suggest integrating this psychological measurement into the teaching of agile leadership.

Developing teams also means paying attention to the development of individual team members. Strengthening talents and skills not only enhances individuals, but also the performance of the entire team. Agile teams should consist of employees from different departments who do not remain stuck in their specialized knowledge. Instead, everyone is required to be willing to address the challenges of other departments as well, in order to develop a comprehensive understanding of customer needs and products that are valuable to customers.

Many of the instruments and tasks of agile leadership also coincide with the leadership tasks that are familiar from non-agile companies: Demands must be communicated and teams must be spurred on to top performance. The team’s needs in terms of rules, freedoms and responsibilities must be individually inquired about and agreed upon. The team leadership often only acts as a moderator here and must be prepared to be irritated and challenged by the wishes of the team members. Ultimately, it is the team that performs, not the team management.

The future of agile leadership

Does it follow from these considerations that agile leadership will increase and become the dominant leadership style in the foreseeable future? Any look into the future is speculative, but there are good reasons to believe that agile leadership will remain the best leadership organization only for certain people, processes, and industries for the foreseeable future. For example, Garton and Noble (2017) argue that traditional management structures, particularly in the areas of purchasing, sales, and accounting, will continue to be the more cost-effective alternative in the medium term. By no means is agile leadership a silver bullet of leadership. Rather, certain conditions must exist for it to be effective. Thus, team members must be experts with a sense of the general context of their business. They must be able to work and manage themselves in a self-directed manner. As Rigby et al. (2020) in the Harvard Business Review, agile working is particularly ideal for work at the top management level.

On the side of industries and processes, agile leadership also lends itself particularly well when products or services are being developed that can be tested and commented on by customers. Agile processes are also suitable for achieving results via self-selected, internal interim goals. However, process organization via easily tangible results such as products, which then have to work, makes agile working easier and intrinsically more consequential. With more abstract intermediate goals and results, the KVIs must be defined particularly wisely in order to also be able to call up the full efficiency of agile methods.

The Stacey Matrix

If it is not clear whether a task can be accomplished in an agile manner, creating a Stacey Matrix will help. On its two axes, the how of the implementation and the what of the objective of a task are plotted. At the zero point of the axes there is clarity about the how and the what, but at the end of the two axes there is complete ambiguity. Depending on the degree to which the how or the what of a task lie in the direction of ambiguity, various agile techniques are available to enable a project to be realized in an agile manner despite uncertainty and unpredictable consequences (Diehl 2021). However, if a task is close to the zero point of the diagram in terms of how and what, it is better not to use agile methods.

The bottom line is that the potential of agile leadership for the future is far from exhausted. Nevertheless, agility will not solve all problems in the foreseeable future and its schematic and ill-considered implementation will even cost efficiency instead of freeing it up. The introduction of agile processes requires the development of an agile corporate culture. This insight cannot be emphasized strongly enough, because any attempt to do it the other way around will create chaos and frustration. However, with the right mindset and the right teams, agile leadership results in motivation, satisfaction and high efficiency. This benefits both employees and the company as a whole.

Want to read more on the topic of agile leadership? Download our free whitepaper about it!

Bibliography

Brede Moe, Nils; Mikalsen, Marius. (2020): Large-Scale Agile Transformation: A Case Study of Transforming Business, Development and Operations. In: Viktoria Stray, Rashina Hoda, Maria Paasivaara, and Philippe Kruchten (eds.): Agile Processes in Software Engineering and Extreme Programming. Cham: Springer International Publishing (383), pp. 115-131.

Campbell, Alex (2020): Agile Essentials of Team and Project Management. Manifesto for Agile Software Development: Independently Published.

Diehl, Andreas (2021): Stacey Matrix – When the use of agile methods is necessary and effective. In: Andreas Diehl, 2021. Available online at https://digitaleneuordnung.de/blog/stacey-matrix/, last checked 07/26/2021.

Eilers, Karen; Simmert, Benedikt; Peters, Christoph. (2020): Doing Agile vs. Being Agile – Understanding Their Effects to Improve Agile Work. In: International Conference on Information Systems (ICIS 2020). Available online at https://aisel.aisnet.org/icis2020/isdevelopment/isdevelopment/6.

El Haddad, Pierre; Bonnet, Marc. (2020): From Agile Leader to Agile Leadership: An OD Project in an International Company Operating in the Middle East. In: Organization Development Journal (Winter), pp. 9-22.

Gren, Lucas; Torkar, Richard; Feldt, Robert. (2017): Group development and group maturity when building agile teams: A qualitative and quantitative investigation at eight large companies. In: Journal of Systems and Software 124, pp. 104-119. DOI: 10.1016/j.jss.2016.11.024.

Koning, Pete r (2019): Agile Leadership Toolkit. Learning to Thrive with Self-Managing Teams. Boston: Addison-Wesley.

Manifesto (2001): Manifesto for Agile Software Development. Available online at https://agilemanifesto.org/, last updated 06/09/2020, last checked 05/27/2021.

Medinilla, Ángel (2012): Agile Management. Berlin, Heidelberg: Springer Berlin Heidelberg.

Rigby, Darrell; Elk, Sarah; Berez, Steve. (2020): The Agile C-Suite. A New Approach to Leadership for the Team at the Top. In: Harvard Business Review (May-June), pp. 64-73.

Wong, Michael (2021): Corporate Agility. Insights on Agile Practices for Adaptive, Collaborative, Rap-id, and Transparent Enterprises. Hoboken New Jersey: John Wiley [&] Sons Inc.

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