Organizations are constantly faced with the changes being wrought by our new digital world: everything connected, enormous amounts of data, and practically unlimited computing power. A common prescription is to transform an enterprise into one that’s leaner and more agile. Typically, becoming more agile means that a company is more sensitive to the needs of the market, and has tighter connections between “the business” and “technology.” To accomplish increased agility, some executives look to the Manifesto for Agile Software Development and the popular scrum process; others look to product orientation.
We know we need small, empowered cross-functional teams, overlapping roles, rampant entrepreneurialism balanced with controls, incremental and continuous value delivery, and value-based instead of contract-based partnerships, but we still have to choose how to get there. The two basic archetypes for change are “People Driven” and “Drive People.” Neither approach is inherently superior: it all depends on the context.
The People Driven Approach
The People Driven approach focuses on enabling your leaders and teams to adopt agile values and techniques that best suit them, at their own pace. Enterprise leadership articulates the need to change, broadly enlists existing leadership in the vision, hires a few new people to help accelerate that change, provides encouragement and support, and adjusts as needs become apparent.
Some helpful steps within this approach include evolutionary reorganization to become less functionally siloed; developing or hiring “chief engineers” who combine business, technical, and leadership skills; and making training available on both principles and on execution. Innovative and ambitious leaders will take the reins, and as others see success, a shift will diffuse through the organization. Methods, roles, and tools can provide diversity, and will accommodate local variations in business needs, technology, and staff.
This approach fits best when current performance is uneven to good, and the need for change is only moderately urgent, and the organization is performing adequately. It works for a strong, participative culture with good people who just need to get better, or a growing organization where you have the luxury of salting the team with some hires who have different experience. People Driven is also a good fit if the senior executives don’t have the expertise — or the hubris, or trust in consultants — to tell everyone what to do.
To imagine People Driven in action, take the case of this well-established financial company: it had a strong culture, good profitability, and excellent leaders. To help it move more quickly, the leaders initiated a People Driven transformation. To avoid disrupting what was generally working well, lean and agile techniques were gradually introduced within existing contexts. Agile terms like product owner, scrums, and backlogs were de-emphasized in favor of existing mechanisms that did essentially the same things, while real change was made in team leadership, customer engagement, test-driven development and physical space. Training was made available, and change was encouraged and supported — but not forced.
Drive People Approach
The Drive People approach focuses on broad and rapid adoption. While the need to change is articulated to all, there is less need to gain the enlistment of existing leadership as, most often, this approach is associated with a newly installed group of employees. In this case, enterprise leadership directs specific actions with new standardized methods and new tools.
Some helpful steps within this approach include large-scale immediate reorganization, possibly including comprehensive switching of human resource job titles — no more project managers and lots more scrum masters and product owners; a focus on specific processes and tools; a large centralized support group of “agile coaches,” and metrics on each group’s degree of compliance. In this case, local variation is seen as resistance, while compliance with the general standard is rewarded.
This approach best fits organizations that urgently need to change, if current performance is unacceptable — such as a directive culture with weak leadership; or an organization that needs to cut costs fast. The change requires senior executives who either know what they want and are confident enough to tell everyone what to do, or who feel they have no choice otherwise as the organization cannot evolve quickly enough without dramatic measures.
One example of Drive People involves a technology product company. It conducted a Drive People transformation because its products were being overtaken in the market and its profits were shrinking. New management already had experience in more agile firms and leaders were comfortable disrupting the poor performance. Functional departments were dismantled, and product/component cross-functional teams were created. These were led by the best of the existing staff plus some new hires. A standardized method and set of tools were implemented and required, with mandatory training and testing. During the transition, a significant amount of lower-performing staff was let go, and were replaced by better product owners and chief engineers.
Whichever Approach, Choose Wisely
Every organizational transformation is unique. In general, People Driven will be more welcomed and is more likely to improve employee commitment. It’s more sustainable since it is integrated into the existing fabric of the company. But “Drive People” change is faster and more extensive, and results show more quickly — whether positive, as in better market engagement, better products and profits, and lower costs; or negative, as in the disruption of current initiatives, production instability, and unwanted staff turnover.
Most leaders during the process of moving a company toward agility would much prefer to be able to be People Driven. After all, the first agile value is People and Interactions over Process and Tools, and unlocking the creativity and commitment of talented teams is the goal. Yet, there are times when leaders don’t have the luxury to go slow or continue accumulating costs. They may believe that enforced commonality is a better option. If you have to choose Drive People, be sure to gain the firm and broad commitment of business partners, because it could be a bumpy ride. At some point, be prepared to come back to the foundation of the people and interactions, since that is how to truly sustain agility.