The traditional command-and-control leadership style has fallen out of fashion and a new trend for Agile management has come to the fore.
This flexible form of leadership, which involves the application of the principles of Agile software development to management tasks, relies on decentralised decision-making. It breaks tasks into smaller components and integrates planning with execution, which it's supporters say allows an organisation to create a mindset that helps a team respond effectively to changing requirements.
Agile management has proven to be a good fit for our socially distanced times, where geographically disparate leaders and their teams must respond rapidly to fast-changing circumstances.
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Managers – even if they want to – can no longer keep a close eye on their teams. Their employees aren't physically close and they have a complex range of priorities to balance. Agile management produces benefits in two key ways: it gives workers the empowerment that research suggests they crave, and it frees up leaders to focus on higher-level tasks, such as refining strategy and developing new business models.
Yet while the beneifts of Agile seem clear, the switch to looser forms of management will be a shock for some leaders who have tended to keep a tight grip on their people and projects. Learning to relinquish control can be difficult, says Rob Doepel, partner at consultant Ernst & Young.
"We should all be a little bit easier on ourselves when we're going through these big transformations to move and operate in a very different way, because it is hard and it takes time and not everyone will move at the same pace," he says.
So how can leaders learn to let go and create an effective Agile leadership style? Two business leaders, who spoke at The Economist's recent Innovation@Work virtual event, give their best-practice tips for sustaining effective Agile management.
Learn to serve others
Mark Evans, managing director of marketing and digital at insurer Direct Line, says the key to effective Agile management is what's known as servant leadership, a leadership philosophy in which the main goal of the leader is to serve.
Rather than commanding and controlling, leaders need to give other people the power to make decisions. Evans says this shift in behaviours and mindsets is probably the most challenging part of a switch to Agile for business leaders.
"I went through a change curve, where I could get the idea that I'm not really in control of anything and I'm just sort of facilitating and helping to prioritise and maybe set the overall vision and mission. But, truthfully, it's a really big deal to jump to that and feel like your self-worth is still there," he says.
Direct Line started its transformation journey nine years ago by running an internal technology team using Agile methodologies. This unit became a part of the core business a couple of years ago. Finally, Direct Line began an organisation-wide consultation process to push Agile across the business last February.
"It's been quite a journey," Evans reflects, suggesting that the coronavirus pandemic has led the organisation to accelerate its transformation to Agile.
"The interesting thing that happened is that we think that people have sort of jumped to Agile a little bit more readily than they otherwise would have done – not without bumps, to be honest – but because they've let go of some of the identity things that sometimes holds us back in these moments," he says.
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Evans says there's no silver bullets for managers looking to create a culture that embraces Agile ways of working. However, he believes the rapid response to COVID-19 has helped make clear the link between how organisations treat their people and how they then treat the company's customers.
Direct Line has seen record Net Promoter (NPS) employee and engagement scores during the past 12 months, which has also flown through into record NPS scores for its customers. The company has used Agile to respond effectively to the customer challenges it encounters. "Agile has helped us to deal with this complexity as a business," he says.
Adopt management as a service
Elke Reichart, chief digital officer at travel and tourism giant TUI Group, has coined her own philosophy for effective Agile leadership known as management as a service, which is about being available to make decisions rapidly. She's used this philosophy for a few years but says it's even more applicable during the coronavirus crisis.
"I think we all have to be bad-weather captains," she says. "Everybody can be a good-weather captain but I think COVID is demanding that we all become very well versed at being bad-weather captains. And being a bad-weather captain means being even more visible for our teams, colleagues, bosses and our stakeholders."
Reichart's management as a service approach means being ready to step in and make effective calls that will support the work of empowered Agile teams. She says the relevance of this approach has been clear during the past 12 months, especially at her firm which operates in a sector that has been significantly impacted by COVID-19.
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"What we had to do at TUI, as we were so heavily affected by the coronavirus crisis, was that we had to make decisions in very short hand within hours or within days. We had to make very drastic decisions that usually would take weeks and months. As an Agile leader, you need to be around; you need to be available."
Reichart says the rapid response to the coronavirus pandemic has helped to sharpen TUI's belief in Agile working methods. The company was already using the methodology in its product-oriented teams. COVID, and its impact on tourism, has pushed reprioritisation.
"We have measured projects in terms of the business multiples they deliver. In the past, we usually had an equation; for one Euro invested, we generated at least two Euro in business value – we are now more at a ratio of one to four, because obviously we are even tougher in the prioritisation. But in general, that process has also brought home to more people at TUI that IT is not a cost centre but a real value-driver, a business multiplier."
That change in perception is welcome. When she joined TUI three years ago, Reichart says there was a perhaps understandable fear that moving to Agile might mean introducing anarchy. Now people understand that embracing agility actually fosters accountability.
"Agile makes the employee much more accountable than ever before," she says, before suggesting companies that introduce the methodology must ensure they match projects to business outcomes and that the tracking of that process is transparent.
"We have reports that all our teams and leaders can access any time they want," says Reichart. "That takes away a lot of unnecessary work for the team to provide PowerPoints for review meetings. It also gives a lot of trust to the leadership team – they can always check on the progress and see it in a very transparent way."