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Describes how Agile teams can use strategic management tools and processes to discover market-creating innovations.

The related article “The next frontier for Agile: strategic management” in the previous issue of Strategy & Leadership explored the theory and possibilities of enterprise-wide Strategic Agility, a combination of Agile mindset and processes with strategic management theory to produce continuous market-creating innovation. This second installment offers insights from noted practitioners about implementing it.

The strategic concepts of Kim & Mauborgne’s Blue Ocean Strategy, Clayton Christensen’s Job to Be Done theory and Curt Carlson’s SRI Playbook – Need, Approach, Benefits per costs and Competition (NABC) can be adopted by Agile teams seeking innovations that create new customer value.

Identifying a well-defined Job to Be Done produces the start of an innovation blueprint which is unlike the traditional marketing concept of “needs” because of the much higher degree of specificity required to identify precisely what problem your potential solution would address.

Using strategic management concepts, Agile teams can redefine how needs are being met and in the process, discover value for customers from offering something or doing something that the company or the industry currently doesn’t provide.

With Agile’s success in accelerating software products and services that customers valued and with the increasing importance of software in general business strategy, business leaders are increasingly turning to Agile for every aspect of their operations.

There are more than 70 different Agile practices. The author advises traditional managers on how to make sense of such a bewildering assortment of ideas.

His research found thatrganizations that have embraced Agile practice three core principles–The Law of the Small Team; The Law of the Customer; The Law of the Network.

The first and almost universal characteristic of Agile organizations is that practitioners share a mindset that work should be done in small autonomous cross-functional teams working in short cycles on relatively small tasks that deliver value to customers and getting continuous feedback from the ultimate customers or end users.

As a network, the organization becomes a growing, learning, adapting organism that is in constant flux to exploit new opportunities and add new value for customers. The future of Agile is ultimately about implementing the third principle: the whole organization operating as an interactive network. In the rapidly evolving “Connected Economy” the power of the network is increasing geometrically.

Some organizations are responding to the opportunity of innovation, while others are not. Harvard innovation expert Stefan H. Thomke says a key reason for the slow pace of innovation is that most organizations lack "a culture of experimentation." In this article the author explains the impediments to establishing such a culture. 10;

In his latest book, Experimentation Works: The Surprising Power of Business Experiments, 10;Thomke says, to create a culture of experimentation, firms need “a new model of leadership,” which cultivates curiosity, emphasizes data-informed decisions, experiments ethically, sets grand challenges and establishes systematic training and support for rapid experimentation. Those are all positive steps in the direction of creating a culture of experimentation.

But they won’t be enough because the underlying management model of most big organizations is explicitly aimed at preventing the very kind of experimentation that Thomke is recommending.

In a digital world, technology has made it radically simpler and quicker and cheaper to carry out and evaluate multiple experiments. The whole organization needs to become an organic living network of high-performance teams. In such firms competence resides throughout the organization and that innovation can and must come from anywhere. 10;

An important discussion of how top down managements squelch experimentation and thus throttle innovation.

The author contrasts 20th Century hierarchical management with Agile influenced 21st Century management, which is more suited to modern realities.

Understanding how 20th Century and 21st Century management differ offers an evidenced-based theory why today’s leading firms are leading and why yesterday’s giants are flailing.

For 21st Century management – the pioneering mode of Agile enterprises and of leading Silicon Valley firms, as well as individual businesses in Europe and China–the goal of the firm is to create customers.

Because the firm’s goal is to create value for customers in a dynamic environment, sustainable strategy must incorporate creating new businesses that attract new customers.

The author compares and contrasts the practices, principles, processes and mindsets of 20th Century management and those of the leading 21st Century firms that have become the most valuable firms on the planet as well as the leading global brands.

As senior executives increasingly explore Agile management in their operations they are discovering that their practices in managing people also require transformation.

The article, with an attached case, explores how some leading companies are radically changing their HR practices to prioritize fostering talent that adds customer value and champion the work experience of their talent. The article explains why transformation will involve, not merely HR process improvements, but a fundamentally different kind of management. It offers a case to illustrate new approaches.

At a time when talent is in such high demand, you must allow—and even encourage—people to have their say if you hope to attract the very best in your field. So, the successful deployment of talent is now largely a matter of creating an environment where the interests, ambitions and innovations of people constantly shape the strategy and future of the company.

Instead of strategy gurus telling talent what to do, now talent needs to play a central role in strategy formulation. Imagine a company divided into some two hundred customer-facing units, each with its own pay scale and work methods, each so talent-driven that employees are given the right to fire their unit leader?

The shift from a strategy-led company to a talent-first company requires fundamental changes in the way CEOs understand the very concept of management—it’s the beginning of a new age.

The article warns that genuine business agility is not easily achieved despite the many consultants offering their services as specialists. It lays out the elements of the best practice approach – the methodology of Agile management.

Using Toyota as an example, the article show how one company is taking an innovative approach to agile team work and decision making.

The concept of Agile management includes both operational agility – making the existing business more focused on customer value – and strategic agility – generating new products and services to bring in new customers.

The shadow of Agile management done too hastily or badly has fostered widespread cynicism.

The article is a clarion call to wake up bureaucratic organizations that pass decisions down a lengthy chain of command. The need now is to have decisions made as close as possible to those who have the best information to make the best decision, which often requires the teams themselves to be the deciders. 10;Leadership becomes a function shared by all the people participating in the team. The team itself becomes the leadership.

The article outlines the arguments by the proponents and opponents of maximizing shareholder value and identifies the true threat the concept poses to U.S. businesses.

The author quotes authorities on both side of the debate over the validity of maximizing shareholder value as a driving principle of management and points out the risks and the alternatives. He notes that many long-established public corporations in the U.S. have chosen to bow to the power of shareholders and reward them instead of attempting risky initiatives that might create new customers or enhance customer value.

Maximizing shareholder value is either the guiding principle of business success that provides a rightful reward for investors or a corrupting influence that thwarts investment in employee talent, sustaining innovation, product quality and customer loyalty.

Since the C-suite is hugely compensated for increases in the current stock price, decisions based on “shareholder value” tend to be decisions that boost the current stock price.

As evidence the problem is being recognized, some CEOs have already spoken out against preferentially rewarding stockholders instead of investing to sustain the organization.

The author concludes that shareholder value theory has not only failed on its own narrow terms of making money for shareholders. It has been steadily destroying the productive capacity and dynamism of the entire economy.

The purpose of this article is to show how companies that embraced the Agile management mindset succeeded at continuous innovation.

The article describes the processes and mindsets of companies that successfully and unsuccessfully adopted post-bureaucratic management models.

Pioneering companies that have adopted a post-bureaucratic mindset are obsessed with adding more value for customers and end-users.

A case example of the model in practice is included.

The article recounts the problems and advantages of both top-down and bottom-up adoption of Agile management concepts and practices.

The author reports on the chief obstacle to successful digital adoption, the resistance to change the fundamental way a firm is managed—one requiring a transformation from industrial-era management to digital-age thinking and management.

The author explains that it has become increasingly apparent that the most successful firms at digital transformation are being run very differently from industrial-era management practices.

As every company becomes a digital company, they need a distributed computing fabric to build, manage, secure and deploy applications anywhere.

The use of “low code/no-code technology” is now “rapidly becoming a priority for every organization’s digital capability building”.

The crucial learning: At Novartis, digital technology did not initially infuse itself throughout the firm as management initially hoped. Some Novartis managers began to realize that technologists and data scientists alone couldn’t bring about the kind of wholesale innovation the business needed, so they began pairing data scientists with business employees who had insight into where improvements in efficiency and performance were needed.

Instead of merely adding a socially popular mission to its existing business goals, Tesla’s CEO Elon Musk has innovated its operations by working backwards from its mission of saving the planet by making and selling a vast number of electric cars in order to help remove a principal cause of an approaching global environmental disaster.

When Elon Musk became CEO in 2008, Tesla’s mission of saving the planet by replacing gasoline-driven cars with electric cars seemed a preposterous overreach.

Tesla is not only making extraordinary progress towards the accomplishment of its mission, but the mission serves as an accelerator of its business generally and its innovations in particular.

The example of CEO Musk showing up on the factory floor, and working shoulder to shoulder with the staff in teams and mobs to solve urgent bottleneck issues sets the tone of Tesla’s workplace. The overriding preoccupation with accelerating innovation is enabled by modularity in design.

A unique study of Tesla’s post-Agile management innovations by an expert on Agile teams and practices.