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Agile Innovation

How to Embrace Agile Leadership to Innovate at Speed

Agile Innovation

GUEST POST from Diana Porumboiu

In a world dominated by uncertainty, how can we prepare for the unpredictable and keep innovating in what seems like a highly chaotic environment?

We simply need to be faster in adapting to change and navigating uncertainty. Studies show that organizations that move faster achieve significantly better results across various metrics, including profitability, operational resilience, organizational health, and growth.

How to make sure your organization is fast enough? Innovation at speed is more relevant than ever, but someone must put the pedal to the metal. Typically, that someone has to be a leader, because in the face of unprecedented change, leaders are needed to get us through the transformation.

However, unless organizations rethink leadership, they won’t be able to innovate systematically. In this day and age, great leadership requires a different mindset and a new approach to drive innovation and keep pace with change. We call this agile leadership.

This article, the second in the series dedicated to Agile Innovation Management, explores the critical role of agile leadership in innovating at speed.

Discover the key challenges and misconceptions surrounding the topic and understand why many leaders struggle with it. We’ll also provide practical steps and examples that will hopefully inspire you to increase the agility of your organization.

From Old Leadership Models to Agile Leadership

Let’s begin by clarifying what we mean by agile leadership and its position in relation to established leadership models.

The history of leadership traces back to Frederick Winslow Taylor, American engineer renown for his methods aimed at enhancing efficiency and productivity. Innovative at his time for shaping industrial management, his legacy still lives on today.

Unfortunately, his methods are not adapted for this century. Despite this, many leaders and managers still adhere to “Taylorism”, a top-down approach where leaders make the decisions and plans, and employees are tasked with executing them.

This model conflicts with the flexible and adaptable mindset required for agility. The gap between employees and Taylorist leaders trying to implement agile practices often leads to frustration and inefficiency.

Even if they introduce squads and sprints, Taylorists maintain a top-down approach, telling people what to do and how.

For successful agile transformations, you need to move away from rigid, outdated models. As we saw in the ING examplepresented in the “Guide to Business Agility” article, simply copying other companies without suitable leadership will not produce the desired outcomes. Therefore, fundamental change is needed.

True agile leadership allows for rapid decision making, resilience, adaptability and innovation. It requires leaders to embrace new ideas, offer clear direction without micromanaging, and create a culture that supports speed and innovation.

Agile leadership is about rapid decision making, resilience, adaptability and innovation.

It’s also important to remember that managers and leaders are not the same. Leadership goes beyond overseeing a group and delivering desired outcomes.

As Seth Godin stated in his “Leadership vs Management” speech, “managers do things right, leaders do the right things”.

While it would be ideal for all managers to cultivate leadership skills, the reality is that their primary focus is on increasing efficiency and productivity within their domains, often overlooking the broader picture. Such skills are essential in leading people, lifting them up and empowering them to become agile, innovative problem solvers.

Despite the progress of AI and technology automating mundane tasks, we still need leaders capable of making decisions that address both present and future challenges. Effective agile leaders should be able to navigate failure and complexities, and map a way to move forward.

To succeed, we need to hone in on critical thinking and those often overlooked “soft skills” like navigating tough conversations, giving and receiving feedback, and showing empathy. No matter where you fall on the org chart, mastering these skills can be the game-changer between just getting by and achieving excellence.

While agile leadership might not be about the “Agile” way, being familiar with the agile values and principles can be useful on a practical level.

For example, the authors of Doing Agile Right help leadership teams shift to agile methods by tailoring the Agile Manifesto’s core values to fit their unique situations. It’s about adapting and making it work for you.

Viima design created from Doing Agile Right: Transformation Without Chaos

To give another example, think of the principle of self-organizing teams. It’s important to know how to build self-organizing teams that thrive, collaborate and continuously learn from each other through continuous feedback and transparent communication.

We’ve seen this time and again in how teams use Viima to collaborate on their ideas, assess, prioritize and develop those that have been discussed openly. We noticed that most successful projects created using Viima have strong leadership too.

But moving away from the practical details to the bigger picture, how much can leaders influence the speed of innovation at an organizational level?

Can Agile Leadership Drive Innovation?

We established in The Guide to Agile Innovation Management that agility enables innovation by embracing experimentation and learning, implementing adaptive planning processes, emphasizing cross-functional collaboration and bringing together diverse perspectives and expertise.

All these elements would not be possible without the guidance of a great leader. So how can a good agile leader unlock innovation in an organization?

Adapting fast by building trust

Agility in leadership is about adapting to changing environments quickly, often under the pressure of performance.

However, this can have negative consequences. The Work Trend Index from Microsoft surveyed over 20,000 people across 11 countries and found that half of them reported experiencing burnout. Although 83% of employees claimed to be productive, only 12% of leaders felt confident their teams were genuinely productive.

To build trust and participation in feedback systems, leaders should regularly share what they’re hearing, how they’re responding, and why. — Work Trend Index 2022

As a leader, offering support and trust can help balance the pressure of performance. Including people in the organization’s narrative and showing them where they fit in helps build trust and provides a sense of purpose.

This sense of purpose encourages people to commit, learn, grow, improve, and innovate. Which brings us to the next point: agile leadership nurtures not only the ability but also the willingness of people to innovate.

Speed requires commitment

Many large firms still rely on outdated “industrial-era management” models. These models focus on hierarchical organizational charts, emphasizing static reporting relationships.

In such environments, it can be extremely difficult for ideas and initiatives to navigate through the many layers of hierarchy and reach the right decision-makers. If they do make it through, the process takes so long that the opportunity may be lost by the time an idea reaches approval.

This approach can lead to a culture with limited transparency and collaboration across teams and departments, along with an attitude of “every man for himself.”

It’s no surprise that over 70% of workforce is disengaged or quietly quitting, which significantly stifles an organization’s ability to innovate. When employees lack motivation, everything slows down. But when there is a sense of ownership and pride, there is higher commitment.

An agile leader fosters a sense of community and nurtures people’s commitment and dedication. This leads to speed and adaptability.

While the right mindset is crucial, using the right tools can also help build trust and promote collaboration. Many leaders use Viima to create processes that enhance idea sharing at all levels, collaboration and trust. They can provide feedback and follow up on people’s ideas in a timely manner, while employees can see the progress of their ideas.

But to reach this level, it’s important to understand the behavioral changes needed. In the next section, we’ll dive into practical tips on how to adapt your mindset by examining leaders who have successfully guided their organizations to thrive and innovate.

How to Be an Agile Leader

How can you become a great leader who adapts to change and guides others into the future? To provide some practical examples, I turned to Collective Genius: The Art and Practice of Leading Innovation by Linda Hill, Greg Brandeau, Emily Truelove, and Kent Lineback.

The authors conducted a decade-long research study of 24 leaders across different organizations and industries. They offer valuable insights into how exceptional leaders cultivate environments that foster collective creativity, collaboration, and experimentation.

In a nutshell, the authors describe the ABC of leadership which drives innovation and makes the shift from “vertical ideology of control” to “horizontal ideology of enablement”.

Their research has identified that to lead an organization that innovates at scale with speed, you need leaders that fill in three different functions:

  • the Architect — to build the culture and capabilities necessary to collaborate, experiment and work.
  • the Bridger — to create the bridge between the outside and the inside of the organization by bringing together skills and tools to innovate at speed.
  • the Catalyst — to accelerate co-creation through the entire ecosystem.

The Architect: Create the right environment

The paradox of business agility is that it takes time to build the capabilities needed for fast response and adaptability. Even if you want to move quickly and encourage others to do the same, you can’t force change.

Achieving agility requires a different mindset — letting go of some control that conventional leadership often demands. This is perhaps the most challenging aspect for many leaders who believe their power lies in maintaining control.

However, as an agile leader, you must recognize existing interdependencies. You rely on employees’ willingness, commitment, and ability to drive progress. Your success depends heavily on others, which is why it’s crucial to create an environment where people can ideate, create, and execute. As we will see in the next chapter, agile leadership involves balancing relinquishing control with providing enough direction and guidance to prevent chaos.

Many elements are at play here, but one of the most innovative animation studios, Pixar, offers a clear example. They created the first feature-length computer-animated film, Toy Story. What’s remarkable about Pixar is that every film they released after Toy Story became an instant commercial success.

Ed Catmull, co-founder of Pixar, is a mastermind of innovation and a pioneer in technology and storytelling. His legacy offers numerous inspiring lessons for leaders, but here are some key points on how he and other company leaders fostered an environment where innovation thrives.

Pixar’s culture is built on two essential elements: diversity and conflict.

  • Diversity

In this context, diversity means intellectual diversity — bringing together people with different perspectives, skills, working styles, and problem-solving approaches.

At Pixar, three different worlds converged: creative, technical, and business. People from all areas were treated as peers, and all perspectives were valued equally. Among visual artists and tech people, you could also find cultural anthropologists, music producers, and even a professional cheerleader.

When different views come together, great ideas, solutions, and innovations can emerge. But inevitably, disagreements and conflict can also arise.

  • Conflict

Conflict is something many leaders fear and seek to minimize. When conflict becomes destructive, personal, or a battle for who is right and who is wrong, nobody wins. However, at Pixar, feedback is honest and direct. Sometimes even brutal. But the aim is to improve things and find the best solution.

A confrontation becomes a debate in search of a better solution that serves everyone’s goals. Those who receive and provide feedback should always keep this in mind.

Naturally, this is not always achievable, and tempers can flare quickly under pressure, frustration or when passionate people clash. When conflict turns into a fight to win an argument, you should intervene, remind people of the greater purpose, and bring them back on track.

As a leader, community building should also be on your radar. Foster a strong sense of “we” and psychological safety. This encourages people to stand up for their ideas and pursue the solutions they believe are best for the greater good.

This is what contributed to Pixar’s continued innovation. As a leader, Ed Catmull realized early on the critical role of leadership in creating the context for innovation.

I realized the most exciting thing I had ever done was to help create the unique environment that allowed that film (Toy Story) to be made. My new goal became … to build a studio that had the depth, robustness, and will to keep searching for the hard truths that preserve the confluence of forces necessary to create magic.

The Bridger: Decentralize decision making

Decentralized decision-making is key to breaking down silos and eliminating bottlenecks, enabling faster experimentation, learning, and improvement. Although this approach is increasingly popular and recommended for driving innovation, many struggle with its implementation.

Decentralization demands strong leadership that empowers teams to drive progress, avoids micromanagement, and provides the right support while removing barriers and building innovation capabilities.

For teams to collaborate effectively, they need a leader who plays a central role — not to manage decisions, but to facilitate innovation.

Take the example of Volkswagen. In 2010, Luca De Meo was the CMO for VW, a group of nine brands, helping the organization achieve its goal of becoming a leading car manufacturer.

VW’s marketing decisions were decentralized, with local marketing teams independently creating and implementing their own strategies based on general guidelines from headquarters.

However, this approach led to a lack of communication and collaboration among marketing teams worldwide. Marketing spoke with different voices in each market, lacked alignment, and had no clear strategic role within the organization.

To build mutual trust and respect De Meo organized a two-day design lab where he brought together over seventy people to collaborate, ideate and work together to build a global brand. Of course, a one-time brainstorming workshop is not enough, so this became a recurrent event. Each gathering had different goals or action points on which diverse teams had to work together, bring their own experience and expertise to the table.

He also took a new approach in handling launches by creating a cross-functional team that brought together fresh perspective from young employees in marketing or other fields. He created a small team and gave them a free hand to come up with an integrated marketing strategy for the launch of a new city car model.

De Meo did not interfere and did not tell them how to go about it. Instead, he encouraged them to work as intrapreneurs within the larger organization. He set high expectations and tried to nudge them in the right direction when needed. Most importantly, he encouraged them to take risks and allowed them to make mistakes. The agile way.

A very important thing to highlight from this story is that De Meo made sure that minority voices were heard. In setups with a conventional approach to leadership, the loudest (or more experienced) voices usually get their ideas across. This means that many opportunities can be missed.

Long story short, leadership created the environment for people to innovate and removed barriers and enabled people to move faster. The efforts paid off and VW grew both as a recognized brand and in financial results.

The Catalyst: Grow capabilities of everyone around you

Visionary leaders made history, but if we take a closer look, it was not all about vision. It’s not enough to have a vision and expect others to follow you. You also need to set direction on how to get there, not just by dictating but by unleashing and amplifying people’s own capabilities, talents, passion and strengths that are useful for the bigger goal.

In our latest conversation in The Innovation Room podcast, we had the great pleasure of talking to John Bessant, an innovation veteran. From his vast experience he shared a few examples of how innovation leaders focused on facilitating conversations and debates to lead people to the future.

Such leaders can cultivate agility, and what is called dynamic capability: the ability to integrate, build and reconfigure internal and external competences to address rapidly changing environments.

To illustrate dynamic capability, Bessant gives the example of Procter and Gamble. P&G made a major change after 150 years of excelling in R&D and market research. They switched to a model they called “Connect and Develop” — their open innovation approach — well ahead of the open innovation trend. This shift involved a significant change in mindset and took them 20 years to get through it. They stepped back, reassessed, and adapted to the changing world.

This is a summary of their achievements, but reaching such results required an internal shift in culture. P&G needed to get everyone on board with open innovation, not just to embrace external ideas, but internal ones too. Early on, they recognized this model as essential for adapting to future challenges.

P&G leadership understood the critical role of employees in driving these changes. The new approach required employees to be more agile and flexible, to develop skills like curiosity, collaboration, and connectedness.

They worked to support employees who were inclined to control more, were insecure, or were resistant to sharing and opening up. P&G set new challenges and increased the complexity of some tasks to push employees’ capabilities. They ensured that employees worked across the business in different markets. As employees gained experience in different areas and improved at identifying and solving problems, their mindsets began to evolve.

Cultivating an innovative mindset is a process that takes time and a structured, intentional approach.

These are just a few examples, and although summarizing them may make it sound simple, each of these leaders struggled in their journey to achieve the desired outcomes.

Excellent agile leadership is challenging, but it doesn’t have to be an all-or-nothing approach. Let’s explore these challenges in more detail to help you assess what you can realistically implement in your own leadership role.

Challenges and Limitations of Agile Leadership

Being a great leader is never easy and being an agile one — navigating through uncertainty — is even tougher. Whether you call it agile leadership or not, your role as a leader is to create spaces for your teams to adapt quickly and steer the organization toward future success.

Let’s see what are some of these challenges and how you can address them by leading with agility.

1. Providing a sense of certainty in an uncertain environment

Certainty is an emotional state that can influence how we perceive our work environment. While you can’t control uncertainty, you can manage the fear of the unknown by being transparent. The least transparent environments often breed anxiety, rumors and speculations.

Remember: Share the big picture with your team, and don’t shy away from the truth. Provide updates on ongoing projects, successes, and setbacks. This way you build trust and foster a sense of purpose. Balance transparency with discretion — too much detail can overwhelm people, but too little breeds suspicion.

2. Managing the chaos

You want your team to take initiative and explore new ideas, but a lack of guidance can cause confusion and inefficiency. I’ve seen leaders struggle with this balance, either micromanaging their teams or stepping back too far.

Remember: Define clear ground rules and processes to guide your team. Support people to innovate within a framework that provides structure. Encourage ideas to surface and provide top-down guidance to turn them into actionable innovations.

3. Adapting to a new leadership model

Embracing agile leadership requires stepping out of your comfort zone and taking others with you. It demands discipline and a low tolerance for incompetence, with a focus on striving for excellence.

Remember: Encourage a disciplined approach to experimentation and ensure that failures lead to valuable lessons rather than wasted efforts. Candid feedback should flow both ways. Both leaders and employees should be open to having their ideas challenged. Embracing this kind of culture fosters growth and adaptability, but it also demands discipline and high standards to strive for excellence, as mediocrity thrives in comfort zones.

Conclusion

Whether you’re a leader or aspiring to be one, it’s important to recognize that perfection in leadership doesn’t exist — everyone has their own shortcomings and challenges. While we should empathize with these struggles, we must also hold leaders accountable.

Today, speed is a crucial competitive advantage, often going hand in hand with scale. Agility at the team level alone may not be enough; you need speed and scale in innovation to drive meaningful change.

Achieving this requires responsible and committed leadership that understands the need for both rapid and large-scale innovation. As you navigate your leadership journey, strive to lead with accountability, adaptability, and a focus on accelerating innovation.

Article originally published on viima.com/blog

Image credits: Unsplash

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Top 10 Human-Centered Change & Innovation Articles of March 2024

Top 10 Human-Centered Change & Innovation Articles of March 2024Drum roll please…

At the beginning of each month, we will profile the ten articles from the previous month that generated the most traffic to Human-Centered Change & Innovation. Did your favorite make the cut?

But enough delay, here are March’s ten most popular innovation posts:

  1. Agile Innovation Management — by Diana Porumboiu
  2. How to Re-engineer the Incubation Zone — by Geoffrey A. Moore
  3. It’s Not Clear What Innovation Success Is — by Robyn Bolton
  4. How Do You Know If Your Idea is Novel? — by Mike Shipulski
  5. How to Tell if You Are Trusted — by Mike Shipulski
  6. Innovation is Rubbish! — by John Bessant
  7. Celebrating the Trailblazing Women Pioneers of Innovation — by Art Inteligencia
  8. Thinking Differently About Leadership and Innovation — by Janet Sernack
  9. The Remarkable Power of Negative Feedback — by Dennis Stauffer
  10. 10 CX and Customer Service Predictions for 2024 (Part 1) — by Shep Hyken

BONUS – Here are five more strong articles published in February that continue to resonate with people:

If you’re not familiar with Human-Centered Change & Innovation, we publish 4-7 new articles every week built around innovation and transformation insights from our roster of contributing authors and ad hoc submissions from community members. Get the articles right in your Facebook, Twitter or Linkedin feeds too!

Have something to contribute?

Human-Centered Change & Innovation is open to contributions from any and all innovation and transformation professionals out there (practitioners, professors, researchers, consultants, authors, etc.) who have valuable human-centered change and innovation insights to share with everyone for the greater good. If you’d like to contribute, please contact me.

P.S. Here are our Top 40 Innovation Bloggers lists from the last four years:

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Agile Innovation Management (Part Two)

How Agility Enables Innovation

Agile Innovation Management (Part Two)

GUEST POST from Diana Porumboiu

In the previous article on agile innovation we covered the main concepts around agile, business agility and its role as a driver for innovation. Now, let’s see how to actually leverage agility to innovate and how other companies have succeeded in this area.

Agility is an enabler for innovation. The pace of innovation, while not easy to achieve, has become the ultimate competitive advantage as we all need to adapt quickly to evolving environments, the digital age and increasing pressing needs.  

The reality is that agile thinking is changing the world whether we decide to adopt it or not.  

Those who succeed at this are ahead of the game. McKinsey research suggests that agility is a critical factor for organizational success. 

The Organizational Health Index (OHI) assesses various aspects of organizational health, including agility, and examines how these factors correlate with business success. An increased organizational health is linked with more resilient, adaptive, and high-performing organizations that can better navigate complexity, drive innovation, and achieve strategic goals. 

What’s more, agile organizations are best at balancing both speed and stability, and these are also the companies that rank highest in the organizational health index.  

McKinsey Ability
Source: McKinsey&Company

The research goes even deeper and identifies a series of management practices that differentiate the most from the least agile companies.  

As you can see, there’s more to business agility than meets the eye and a few sprints just won’t cut it.  

However, if we look at the agile principles, there are several ways in which they can enable innovation:

  • They bring an empirical process control approach, which emphasizes transparency, evaluation, and adaptation.  
  • They enable experimentation and learning as teams are encouraged to test hypotheses, validate assumptions, and learn from both successes and failures. This experimental mindset is essential for innovation.
  • They are about adaptive planning processes that allow teams to adjust their priorities, strategies, and product roadmaps based on emerging opportunities and threats.
  • They emphasize customer-centricity. By focusing on delivering value to customers through continuous delivery and customer feedback loops, you make sure your innovations meet real market demands and solve genuine problems.
  • They encourage cross-functional collaboration and self-organizing teams, bringing together diverse perspectives and expertise.  

To get a better idea of how this looks in practice, we’ll take the example of ING Bank.

ING Bank

ING is a global financial institution originally from the Netherlands and a good example to illustrate how agile can be introduced organization-wide, the right way.

ING wanted to become agile for the right reasons. The shift to agility wasn’t about working faster or growing more—it was about being flexible and adaptable. Even though things were going well financially in 2015, ING noticed that customer behavior was changing due to trends in other industries, not just in banking. So, they knew they had to change too.

ING Bank embraced several key principles of agility, drawing inspiration from the practices of tech companies to align with their objectives and operations: 

  • Cross-Functional Teams: ING structured its IT and commercial departments into agile squads, mirroring the approach seen at Tesla. This integration fosters cross-functionality and collaboration, with teams physically situated together within the same premises.
Agile at ING Bank - McKinsey
source: McKinsey & Company
  • Rapid Decision-Making and Experimentation: Without bottlenecks created by middle management, ING facilitates swift decision-making and continuous experimentation. This agile approach enables the organization to constantly refine and test customer offerings without bureaucratic delays.
  • Enhanced Collaboration and Transparency: Recognizing the importance of collaboration, ING implemented structural changes to break down silos. Clear delineation of roles, responsibilities, and governance structures fosters improved cooperation across teams and departments.
  • Accelerated Delivery: Instead of their usual annual product launches, ING adopted a more agile release cycle, rolling out software updates every two weeks. This agile delivery model allows the organization to respond promptly to market demands and customer feedback, ensuring rapid innovation and adaptation.  

The first step in achieving this agile transformation was to develop a clear strategy and vision. They started small and rolled out the new structures and way of working across the entire headquarters in eight to nine months.  

Last, but not least, they invested significant energy and leadership time in fostering a culture of ownership, empowerment, and customer-centricity, which are foundational elements of an agile culture.

As Bart Schlatmann from ING points out, agility is a means to an end, not the end goal itself; it is the pathway to achieving innovation.

Drawing from these examples and research from other organizations, we can summarize the five tenets of agile organizations:

  1. Purpose-Driven Mindset: Shift from a focus on capturing value to co-creating value with stakeholders, embodying a shared vision across the organization.
  2. Empowered Network of Teams: Transition from top-down direction to self-organizing teams with clear responsibility and authority, fostering engagement, innovative thinking, and collaboration.
  3. Rapid Learning Cycles: Embrace uncertainty and continuous improvement through iterative decision-making and experimentation, prioritizing quick adaptation over rigid planning.
  4. Innovation Culture: Cultivate ownership, empowerment, and customer-centricity, enabling employees to drive organizational success.
  5. Integrated Technology Enablement: View technology as integral to unlocking value and enabling responsiveness to business and stakeholder needs, leveraging advanced tools for seamless integration and rapid innovation.

Actionable Steps to Drive Innovation through  Business Agility

We can’t wrap things up without going through some of the key steps that should not be missed in an agile transformation journey.  

Constancy of purpose  

You might have heard of Edwards Deming and even used his PDCA cycle in your continuous improvement work. He is well known for his legacy in the field of quality management, particularly for his contributions to the improvement of production processes in Japan after World War II. To some degree, his work is also seen as one of the main inspirations for the agile movement.

Among his work, we can also find the “14 Points for Management,” where Deming outlines how essential it is to have a clear and unwavering commitment to a long-term vision or mission. 

He called it constancy of purpose. You can also call it your North Star. Regardless of the words you choose, it’s important to set your goals and align all activities, processes, and resources towards achieving them. How to do this?

  • Communicate the Purpose: Regularly communicate the organization’s purpose, mission and goals as well as how agility contributes to achieving them.
  • Define Goals: Clearly define objectives and goals that align with the organization’s purpose. These goals should support the overall mission and vision.
  • Empower Teams: Trust by default and enable teams to make decisions, take ownership of their ideas and work. Provide them with the autonomy and resources they need to innovate and deliver value.
  • Measure Progress: Measure progress towards your goals, but also establish metrics that can measure your ability to be responsive. Regularly review and assess how agile practices are contributing to the overall mission.
  • Adapt and Iterate: Embrace continuous improvement processes that align with your internal structures and needs. Encourage teams to experiment, learn, and iterate on their approaches.

Agile leadership

Adopt the ABC of leadership which drives innovation and makes the shift from “vertical ideology of control” to “horizontal ideology of enablement”.

Linda Hill, renowned professor at Harvard Business School, specializing in leadership and innovation makes a great point about the roles a leader should take if they want to drive innovation and agility.  

Over time leadership evolved from a purely strategic role, to providing a vision that guides people in the same direction. More recently, research showed that a visionary leader is not enough. You need leaders that can also shape the culture and capabilities needed for people to co-create the future. This requires a different approach to leadership.

Research has identified that in order to lead an organization that innovates at scale with speed, you need leaders that fill in three different functions:  

  • the Architect – to build the culture and capabilities necessary to collaborate, experiment and work.
  • the Bridger – to create the bridge between the outside and the inside of the organization by bringing together skills and tools to innovate at speed.
  • the Catalyst – to accelerate co-creation through the entire ecosystem.  

Here is Hill’s short summary on the ABC of leadership:

Another top voice is Steve Denning who has been an advocate of agile and agile management for years. He makes some great points about the agile mindset which requires a new way of running organizations.

For an organization to be truly agile, the so called industrial-era management needs to be replaced with digital-age management which is strongly driven by an agile mindset.  

The traditional management style makes it hard for agile to work because the old command-and-control approach goes against the agile principles. The top-down approach is riddled with bureaucracy which obstructs visibility to the customer and the realities at the lower levels of the organization.  

Some of the most successful and innovative organizations, like Apple, Google, and Microsoft understood this early on and shifted their focus to delivering customer value first, one of the agile principles. This required a change in mindset but also in the corporate culture, which is no easy undertaking.

To make this transition, Denning talks about five major shifts that companies need to make:

  • From profit-focused to customer-focused goals.
  • From direct reporting to self-organizing teams where management’s role is not to check on employees, but to enable them to do their work by removing obstacles.
  • From bureaucracy, rules, and reports to work coordinated by Agile methods and customer feedback.
  • Prioritize transparency and continuous improvement over predictability.
  • Encourage horizontal communication rather than top-down directives.  

While they are straightforward and make sense for most of us, these changes are maybe the hardest to make, especially for established organizations that are not used to challenging the status quo.  

These big undertakings are what make agile possible at scale. But even if you’re not there yet, you can still apply the agile principles at a smaller scale to enable innovation.  

Minimize complexity  

Complexity is the enemy of agility. People in companies both large and small try to come up with the perfect solution, that often doesn’t exist in the first place, and only end up having solved the wrong problem.

On the other hand, if you were to simply move ahead quickly with something that creates real value and solves at least some of the problems, you’ll see which of your assumptions and concerns are real, and which aren’t. You’ll also see which problems you can work around, and which ones you simply must address directly.

This obviously eliminates a lot of uncertainty and reduces the complexity associated with solving the problem, which again helps you focus your innovation efforts on what matters – creating real value.

The bigger and more complex the problem, the more important it is to take an agile and modular approach. 

Thus, the bigger and more complex the problem, the more important it is to take this agile and modular approach that focuses on the speed of making tangible progress. 

Conclusion

As we explained in our complete guide to innovation management, there is no single perfect way of managing innovation. Different companies have different approaches for innovation management.  

However, the common thread of successful organizations are structures and processes that mitigate the somehow chaotic nature of innovation management.  

In these two articles we explored agile as a method to enable innovation and improve its management for sustained success. We don’t believe in quick fixes or miracle solutions. That’s why we made the case of agile as a mindset that should permeate every aspect of the organization.


Article originally published in full format on viima.com/blog

Image credit: Unsplash, McKinsey

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Agile Innovation Management

Agile Beyond Software Development

Agile Innovation Management

GUEST POST from Diana Porumboiu

Research reveals that 90% of executives recognize the critical importance of agility for their company’s future success, with 96% emphasizing the need to increase agility in the future. What’s more, agile companies grow revenue 37% faster and generate 30% higher profits than their non-agile counterparts.  

Incumbents are shaken by the highly dynamic environment they operate in, and they are too slow to respond to disruptive changes. 52% of companies in the Fortune 500 have either gone bankrupt, were acquired, or ceased to exist.

An AEIU survey, 27% of respondents cited their organization’s lack of agility as a competitive disadvantage in anticipating marketplace shifts. Unfortunately, it’s not enough to be better and stronger, you also need to be faster to swiftly adapt to the market race.

Based on our experience in working with top innovators, and on market insights and trends, we can see that the future of innovation management is agile. What does this mean, and how does it concern you, the ambitious innovator?

The following two articles dedicated to agile innovation aim to answer these big questions and act as a guide to agile innovation management. Let’s start by framing the major concepts and explain the thinking behind them and later continue with practical and actionable tips.

Let’s start by untangling the intricate connection between business agility and innovation management by shedding some light on all these terms: innovation, innovation management, agile and business agility. 

Innovation is a highly debated topic. You might be sick of hearing this buzzword everywhere, but whether you choose to use it or not, the concept behind it is here to stay.

The short definition of innovation comes from the Merriam-Webster dictionary: innovation is “the introduction of something new.”  

This is an oversimplification, so we have to take it one step further to explain the nuances.  

Innovation is not just about generating and implementing new ideas. While these ideas can refer to products, services or processes, adding innovation to the mix means that you bring about positive change and create value.

Through innovation you should identify new opportunities that can be transformed into tangible outcomes that address unmet needs, solve problems, or improve existing conditions. 

To achieve these results, you need to manage a series of activities that are involved in the process of introducing those new ideas. These activities can range from ideation, development prioritization, evaluation, to implementation and launching of new products or introducing new processes. This is what we call “innovation management”.   

The challenge is not only in managing all these activities to pursue innovation, but also in doing it fast.  

Here, we refer to the pace of innovation, which plays a crucial role in sustained business growth.

In a nutshell, the pace of innovation is the speed at which an organization can improve their existing products and services and their ability to develop them while capturing the needs of the constantly evolving markets. 

Your rate of improvement (so the pace of innovation), has compounding, exponential returns and thus gives a clear competitive advantage.  

Why are we talking about the pace of innovation? Because it goes hand in hand with the agile mindset, which in the past decade has developed into the more holistic approach, business agility.  

A short introduction to “agile”

Agile as a business concept emerged in 2001 with the “Agile Manifesto”.  

At its core, agile refers to a set of twelve principles and four values intended for teams that work on software development. It started as a manifesto, but the brains behind it never imagined that their vision on how to better develop software would play such a pivotal role in management at an organizational level. 

This is, in a nutshell, the 2001 version of agile:

  • The four values of the Agile Manifesto. The idea is that what is on the left should be valued more than what is on the right.  
  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 
  • The twelve principles behind the Agile Manifest that the signatories followed.

Today, “agile” left the dark chambers of software development to capture the attention of leaders across many industries.  

These days there are countless frameworks and practices that ride the agile wave, but to be truly agile it’s more important to understand the thinking behind the agile concept, before deciding what methodologies are fit for purpose.

Agile 2.0

Agile 2.0 is the next iteration which comes from different authors who want “agile to pivot”. Given today’s use of agile and how it has been growing outside of its initial purpose, the initiative is understandable and laudable.   

Agile 2.0 is more anchored in today’s digital world and puts greater emphasis on some areas that were missing or misunderstood in the first version.

It’s also more balanced and encourages a more holistic approach. For example, even though the first manifesto does not incite chaos by making the case of self-organizing teams, it fails to address the importance of leadership, which agile 2.0 wants to rectify. To get a better understanding of agile 2.0, you can read the principles on the dedicated page.  

To summarize, “the agile way” refers to the ability to respond to change, adapt, build things in smaller cycles, get feedback, and unveil new opportunities. 

Why Business Agility is More Relevant than Isolated Agile Practices 

Agility promotes flexibility, collaboration and continuous improvement. It’s about adapting and responding quickly to changes. This is why it also helps increase the pace of innovation. Of course, easier said than done.

We have seen in the past twenty years how agile has outgrown its software development box. The problem is that most organizations that want to be agile are trying to fit a square peg in a round hole. This leads to frustrations especially on the receiving end, when employees are forced into these “agile ways” even though leadership did not set the stage for agile in the first place.

Instead of fixating on agile methods, the focus should be on how to scale the approach at a higher level through business, organizational and enterprise agility. They might seem one and the same thing, but there are nuances that differentiate the three.   

While business agility focuses on operational responsiveness, organizational agility emphasizes cultural and structural adaptability, and enterprise agility encompasses a broader perspective, incorporating external relationships and ecosystem dynamics in addition to internal capabilities.  

In all three scenarios, achieving an extensive agile transformation is a highly complex journey and requires a top-down approach. However, it doesn’t mean that agility can’t also be achieved bottom-up, outside the IT department. In our work with customers, we see many innovation champions who put the wheels in motion through their determination and commitment to embrace agility.  

Even though the agile concept is used as a badge of honor by many organizations, it’s still highly misunderstood.  

That’s why it’s also important to understand not just what agile is, but also what is not.  

What is NOT Agile  

Scaling agile thinking organisation-wide it’s very difficult and hard to achieve. One reason is the lack of direction. Leaders and managers rush into methodologies and frameworks that sound good because others seem to be successful in implementing those. But more often than not, they forget to ask themselves why they want to be agile in the first place. Is it for the right reasons? Is there a good understanding of agile before bringing on board an agile coach?

Using Kanban, organizing Sprints, and hiring Scrum Masters will not automatically make you more agile. It’s important to understand agile holistically and put it into context before getting to the actual tactics and tools.

Start by asking yourself, what do you want to achieve, and what problems you want to solve with agile?

If your goal is to increase efficiency, deliver more or faster, increase productivity, or quality, there are plenty of other methods that can help you achieve this. Agile can contribute to these, but it’s not a prerequisite.  

Agility is primarily about adaptability and changing conditions. So, the main reason for considering the agile approach should be market responsiveness: your organization’s ability to adapt rapidly to changes that are happening in the market. 

Without clearly understanding the above, it’s easy to see how, for many organizations, agile became synonymous with processes like scrum.

Just to give a bit of context, Scrum is the most popular method (even though it precedes the Agile manifesto) used now by agile practitioners. It’s an iterative framework that brings small teams together to find adaptive solutions for complex problems.  

source: unsplash.com

A scrum process is built around product innovation and works best when there is a lot of uncertainty, and you don’t know which way your product should go.

In Scrum, work is organized into short iterations called sprints, usually lasting 2-4 weeks, during which a cross-functional team works to complete a set of tasks or goals. Sprints have been adopted by other departments too, not just those working on product development.  

But whether these can be successfully implemented outside of software development and scaled to other departments, is still a matter of debate. We’ll explore the reasons behind this in the next section where we dissect the challenges and pitfalls of agile.    

Bottom line, scrum is most suited for exploration and validation of assumptions. Scrum is not about speed, efficiency, and predictability. If you’re in a highly exploratory environment Scrum is a valuable practice.

Then there are those teams that proclaim their agility through Kanban. We explained the tool in greater detail here, where we show how it’s used to improve flow efficiency and optimize operations.

While it can be a highly valuable tool within the agile transformation, Kanban on its own is not enough to increase agility.  

So, while these are very popular agile practices, useful in their own right, they don’t have the power of embedding agility at the core of the business.

What does this all have to do with innovation management and how can you actually drive agility to innovate?  Something to explore in the next article.


Article originally published on viima.com/blog

Image credit: Unsplash.com, viima.com

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