The document discusses the differences between traditional management structures and Agile frameworks. It notes that 88% of surveyed organizations report tensions between Agile teams and traditional management. Traditional management is described as hierarchical and top-down, focusing on efficiency and control, while Agile emphasizes self-organizing teams, iterative development, and customer collaboration. The document argues that Agile approaches are better suited to today's dynamic environment that requires continuous innovation, noting that horizontal companies using Agile principles like Google and Apple are outperforming traditional vertical firms.

1. The Case for Agile: What, Why
and How?
27 January 2015

2. Management versus Agile
• 88% of 400 people surveyed reported tension
between Agile managed in their organisation &
the way the rest of the organisation is managed

3. What is Management?
• Vertical mindset – strategy set at the top, power trickles down, high
rise buildings
• Big leaders appoint little leaders
• Individuals compete for promotion
• Compensation = rank
• Tasks assigned, managers assess performance
• Rules circumscribe discretion
• Purpose: make money for shareholders & top executives
• Communication top-down
• Values = efficiency + predictability + preserve gains of the past +
conservative
• Tight control = CSF
• Systematic disruption = large-scale fast-paced innovation that can
disrupt stable businesses very rapidly

4. What is Agile?
• Horizontal mindset – low flat buildings, established
foothold in most vertical organisations,
• Purpose = delight customers + liberate full talents &
capacities
• Making $$$ = result, not goal of activity
• Focus is on continuous innovation + enablement
• Communication = horizontal conversations
• Creation of the future  Banking, not banks;
transport, not cars.
• Creative economy

5. So what’s working?
Market capitalization
• Apple – $660 billion 
Horizontal
• Google – $362 billion 
Horizontal
• Facebook – $222 billion 
Horizontal
• IBM – $155 billion Vertical
• GM – $54 billion  Vertical
Vertical firms are struggling with
declining revenues & cost cutting
reorganizations. Horizontal firms
like Google & Apple are busy
growing & inventing the future

6. More on Agile
• Self organizing teams that
work in iterative fashion &
deliver continuous
additional value directly to
customers
• Practices include Scrum,
XP, Kanban, DevOps and
Continuous Development
 Source from lean
manufacturing

7. • “This new emphasis on speed and flexibility calls for a different approach
for managing new product development. The traditional sequential or
“relay race” approach to product development… may conflict with the
goals of maximum speed and flexibility. Instead, a holistic or “rugby”
approach—where a team tries to go the distance as a unit, passing the ball
back and forth—may better serve today’s competitive requirements.” ~
Hirotaka Takeuchi and Ikujiro Nonaka “The New New Product
Development Game” in HBR in January 1986

8. Hierarchical Bureaucracy
• Current firms with hierarchical bureaucracy
– Falling rates of returns on assets & invested capital
– Dispirited workforce
– Decline in competitiveness
– Widespread disruption of existing business models
– Basic idea = people report to boss who tell them what to
do, control their work & provide order

9. Hierarchical Bureaucracy
• Solves 2 problems
– Get semiskilled employees to perform repetitive
activities competently & efficiently
– Coordinate efforts to produce large quantities of
products
• Good for stable environments = Scalable +
efficient + predictable + reliable average
performance
• Weakness = Vertical + non-collaborative + linear
plans + internal focus + dispirited workforce +
inflexible + customer absence

10. Changes in economy
• In the past,
– Change wasn’t important because of stable context where firms can
predict what customers would buy
– Semi-skilled employees cared they had a job & paycheck 
collaboration was secondary
– Managers knew best
• Globalization, deregulation + new technology changed everything:
– Power in the marketplace shifted from seller to buyer. Customer was
now central.
– Now the new norm as “better, cheaper, faster, smaller, more
personalized and more convenient.” Average performance wasn’t
good enough. Continuous innovation became a requirement.
– In a world that required continuous innovation, a dispirited workforce
was a serious productivity problem.
– As the market shifted in ways that were difficult to predict, static plans
became liabilities.
– The inability to adapt led to “big bang disruption.”

11. Changes in economy
• In this turbulent context, the strengths of
hierarchical bureaucracy evaporated.
– Scalability turned into unmanageable complexity.
– The efficiency of economies of scale turned into
diseconomies and inefficiency.
– Predictability turned into a crippling lack of agility.
– Reliable average performance wasn’t good
enough for customers who wanted “faster, better,
cheaper, smaller, more personalized and more
convenient.”

12. Horizontal world of Agile
• Features of agile approaches
– Work is done by self-organizing teams that could
mobilize the full talents of those doing the work.
– Work is focused directly on meeting customers’ needs.
– A “lens” focuses attention on the customers’ needs
(when the lens is a person, as in Scrum, the person is
known as a “product owner”; in large scale
applications, the lens is “a platform.”)
– Work proceeds in an iterative fashion so that it can
progressively satisfy customers’ needs better.

13. Horizontal world of Agile
• Features of agile approaches
– Workplace interesting, inspiring and autonomous
– Customer central & purpose is to delight the
customer
– Basic dynamics of traditional economy reversed

14. Implementation of Agile