Agile companies still need managers, just not old-fashioned ones

At Headlink, we like Agility.

We discussed it several times: sometimes with passion, sometimes with restraint. While we agree on its core principles, the result-driven governance, the positive impact it has on motivation … We often warn our clients of the disastrous effects of a « declared », agility, as opposed to an embraced transformation. Bottom line, stand up meetings and new KPIs will not create long lasting performance, but may destroy motivation on the long run, if not connected with a shared ambition – and a strong commitment from managers.

New management methods may scare Top and Middle managers: after all, some of them, such as Holocracy or Teal Organization promote « self management ».

Agility promotes the construction of multi disciplinary teams with a common objective, de-emphasizing the role of traditional, function based hierarchy. Organic models are replacing reassuring, seemingly indestructible traditions of logical, nearly engineered hierarchical matrices.

Are managers an endangered specie ? No.

Should the oak transform into a reed ? Yes.

Our ever-evolving markets and needs might have already given the answer. You will find underneath the new roles of our top and middle managers in this new paradigm – and why the transformation might be challenging.

The « How to » Agile guide for Top Managers – and why some leaders may not overcome the transformation.

Ensure alignment at the managerial level on objectives, strategy and priorities

Why does it matter? As we mentioned early on,  Agile teams are composed of all the relevant expertise: Operational, Legal, Organizational, Compliance … devoted to a common goal, should it be the creation of a new fund, the automation of standard credit issuing, or the design of a new generation of compliance function. This cannot work if:

  • hierarchies of our team members are not aligned on the global objectives of the company,
  • the goal of the Agile team is incompatible with the global strategy of the firm – or worse, it there is no common strategy,
  • an unplanned change in priorities puts the project on hold – destroying the team’s purpose.

Why is it a challenge? Setting a clear sail in uncertain waters is tough. Budget-oriented and financial analysis profiles may need to focus on the ambition of the company (what we want to be) rather than objectives characterized by figures (what is our Y+3 market share).

Set clear objectives for the teams and the associated room for maneuver

Why does it matter? Now that Top Managers are aligned on the objectives, strategy and priorities of the company, they need to distribute « field » objectives to Agile teams. More importantly, they ought to give teams enough space for creation. Creativity is the core of problem solving in an uncertain environment. Constraint does not kill creation, but rigid control does – remember,  only results matter here – the more frictions there are in the team’s interactions, the lesser room for new solutions there is.

Why is it a challenge? Top Managers are not used to Agile work. They often want reassuring, linear progress, and colorful progress status reports. Creative solutions often come unexpected – like a good Conan Doyle ending. Agree in advance on KPIs compatible with the team’s particularities, and let the ship sail.

Communicate clearly on these objectives, the expectations towards the teams and be transparent on the ends

Why does it matter? Lack of transparency is compatible with Fordism, or silo work. If a co-worker’s job is clearly defined by a list of tasks, he only needs to know information relevant to his perimeter. For an Agile team to truly outperform expectations, it needs to have the global picture, the why, when, what for, whom for, scope, context, ecosystem … Or else it will still provide unexpected solutions – only incompatible with the broader picture.

Why is it a challenge? It is common knowledge that information is power. In the mind of most executives, sharing information can induce risk. We easily find ourselves reluctant to share power, and we often overestimate the impact of sharing certain information. Transparency brings empowerment for everyone – while it is often when we learn something from hallway rumors that wrongdoing happens.

Be exemplary on openness, trust/accountability and collaboration

Why does it matter? The switch from concrete, tangible objectives and rigid guidelines to ambitions and horizons has provoked a changed in paradigm for your employees. They need not to ask « what to do » anymore, but « what to be ». To achieve this transformation, they will look up for an example, and this example is you, as a top manager. The quality of your workplace is created by credibility, serenity and coherence – not by fruit baskets and nerf guns. If you want your employees to feel accountable, show them the way. If you want them to collaborate, don’t be the end of dialogue.

Why is it a challenge? Leaders can be motivated by their own KPIs, rather than those of their teams. Worse, some companies may have created a culture where lone desperados find their way to the top at the expense of team players. This may seem as an unethical yet viable emulation method for the years of plenty. It is unfit for harsher years, and deadly on the long term.

The « How to » Agile guide for Middle Managers – from the famous Spotify method

Top Managers may have to change their mindsets, yet their roles remain in practice the same: ensuring the survival of the company by making the right large scale, long term decisions. For Middle Managers, the difference is more tangible: they might loose their traditional edge (being the « N+ »). They will need to be facilitators rather than controllers. In the Agile world, their role relies much more on animation rather than steering.

There is no panacea for finding the perfect middle management for all companies. New roles will need to be well thought under the lens of a company’s culture and history. Still, the well-known Spotify method remains a solid source of inspiration.

From the Steering Manager to the:

Squad Leader

  • He is not the hierarchical manager of his team.
  • He must develop the cohesion of a multidisciplinary team with the mind of an animator/coach.
  • He must report to the tribe leader on the overall performance/progress of work as well as on the performance of employees with each chapter leader concerned.

Tribe Leader

  • He is no longer in charge of developing a team.
  • He is now in charge of customer development on his perimeter (developing the right strategy, defining the right objectives, making the right decisions) with the support of the different squads.
  • He is in charge of  his P & L: as a mini-CEO of his field, he must develop a global view of the different skills and capacities of the organization.

Chapter Leader

  • He acts as a hierarchical manager.
  • He is in charge of developing the expertise and skills of the teams.
  • He must equip them with the right tools and methodologies for a delivery of excellence.
  • And must put in place actions of coaching and evaluation … without direct supervision (i.e. no implication nor validation in the delivery).

Why is it a challenge? First of all, there will mathematically be less hierarchical middle managers in an Agile organisation. Moreover, some managers may be unfit for animation or coaching positions, especially if the company’s way of attributing managing position relies on individual performance. More precisely:

  • Squad leaders are accountable to their teams, and could suffer from this obvious change in the balance of power.
  • Tribe leaders need to have sales skills as well as a 360 vision.
  • Chapter leaders need to learn how to provide the necessary tools without controlling their use.

Bottom Line

The idea of autonomous teams is no novelty. Quality circles, composed by nearly unsupervised operators and engineers focused on continuous improvement of quality (kaizen) have been created by Toyota’s Taiichi Ōno in the early 60s.

Nowadays, banking groups are challenged by smaller, more reactive players, namely fintechs.

At Headlink, we believe a well implemented Agility will bring back their competitiveness by bringing this reactivity back to large scale players – if their managers start the change with the man in the mirror.

Feel free to contact us should you want to discuss the benefits of Agility for your organization.