Transitioning to agile often becomes an obstacle when teams have made the switch while management does not.

“The mistake that most organizations are making today is that the leadership isn’t really participating in the transition,” said Lowell Lindstrom, vice president of services at VersionOne, in a recent SD Times interview. “They’ll sponsor the transition, fund the transition and support the transition, but they don’t actually participate. They don’t actually do agile. They don’t actually practice the things that they are asking their team members to do.”

Steve Denning, award-winning author and 2014 ALM forum keynote speaker, says one of the problems is most management is focused on making money rather than delivering value to customers. SD Times had a chance to talk to Denning on transitioning management to agile.

SD Times: What is agile management?
Steve Denning: It involves focusing on delivering value to customers rather than the goal of making money. Although it in fact does make a lot of money, that’s the result, not the goal.

The goal is based on self-organizing teams, rather than having individuals report to management. It is workers coordinated in these agile practices, in their various versions of Scrum, Kanban, lean and whatnot, but they basically set aside coordinating work by reports and plans and instead work in very short cycles, deliver value at the end of each cycle, and get feedback at the end of each cycle.

Those practices put together as a coherent self-reinforcing package have a hard time in an organization that is run on the old practices, and that’s the drama being played out in many organizations.

Why is it important for management to be agile?
The management will say our objective is to meet out quarterly numbers, and so everything focuses on how can we meet our quarterly numbers, how can we make money. The whole focus of the work starts to be pulled away from delivering value from customers and making a quick return.

What the company starts doing is totally counter to the philosophy of agile, which is about delivering value to customers. So you have conflicts really at every turn because the management is looking at one set of values and measuring things with one set of measures, allocating resources and rewarding and punishing people based on those metrics. Then you have the agile people working on a totally different set of goals and metrics. You can try to set up buffers between the two worlds, but the track record of coexistence is not a happy one.

Why do you think management isn’t on the same page when it comes to agile? Why are they having such a hard time?
Power in the market place shifted from the seller to the buyer and many organizations just didn’t notice that paradigm had shifted, and so they keep on trying to do the same thing. They find themselves running harder and harder just to stay in place so as to not fall further behind, and they are extremely stressed. In a sense they know that something is wrong, but they haven’t quite figured out what it is and they haven’t by and large brought it into agile practices.

Do you think management is just unaware or unwilling to transition?
They are entrenched in some very bad habits, and in some cases they are hugely compensated for maintaining those habits, particularly the C-suite. It’s very difficult to get someone to understand something when they are being paid not to understand it. That is the situation in many of these large organizations, but the economic forces are overwhelming and will drive these organizations out of business unless they change. The choice is change or die, and many may decide to die, but they don’t have a choice to keep doing what they are doing.

How are agile teams and management supposed to work together, and what needs to be done in an organization to get there?
You have to introduce agile thinking throughout the whole organization. Different goals, different ways of structuring work, different ways of coordinating work, different ways of values, different ways of communication, those are the core principles of agile. So an organization that wants to have the whole organization agile needs to run the organization on those principles. This is a big shift; I am not saying it is a simple thing to do. It is a huge transformation and it is a different way of looking at the world. It is a phase change. Going from ice to water, or it’s a Copernican Revolution where the center of the universe is shifted. It used to be within the corporation, and now it’s with the customers. It is a fundamentally different way of looking at and understanding the world.

How is an organization supposed to transition the entire organization to agile? Who leads the transition?
What you have in most big organizations are pockets of agile, even large, very large pockets. I mean in GE for instance, a very large organization that has a huge agile community in it, they are like revolutionaries within GE and actively agitating for the whole GE to become agile. You have GE largely still running on traditional lines, and then you have a whole segment of the corporation running on agile lines, so that certainly lays the foundation for change.

Ultimately, culture changes of this depth and magnitude require support at the top, and so it is great to have these islands of agile lower down, but ultimately the top of the organization has to come to terms with it and say, “We are going to run the whole organization in a different way.” That hasn’t happened in GE, but it will happen. It is only a matter of time.

I have heard companies say that in order for managers and agile teams to be on the same page, there has to be a level of trust. Do you agree with that?
Absolutely. Trust is key. That is a big problem in traditional management firms: There is very low trust. And that is one reason that it runs into problems. There is also verified trust when agile and Scrum are run properly. It is not blind trust. It has having a set of processes where there is continuous direct feedback from customers: Are they on the right track? If not, why not?

And in fact there is much more transparency than traditional management. It’s that transparency of agile that often horrifies management because suddenly all of the tricks that traditional management play on are revealed, and so it becomes intolerable, and the management often backs off and says “We don’t like the look of that,” and goes back to their old ways.

Trust grows from actually listening to people and understanding what they are saying and then acting consistently with what you say, and if you start doing those things, then trust will build up. When you don’t have that transparency and you don’t have that consistency between saying and doing, then obviously trust breaks down, so those things are age-old factors in building up trust and destroying trust. You can destroy trust in about 10 seconds, and it takes a long time to build up trust.

Denning will be speaking about transforming management through agile at the 2014 ALM Forum on April 2 from 4:30 pm to 5:30 pm.