Agile governance – why do we need it?
If you are running a business in 2020 you should expect to face a different set of challenges in the second half of the year to the ones you faced pre-COVID-19.
As we grapple with what the ‘new normal’ might look like (if there is such a thing), there is a justifiable clamour for businesses to build resilience and to be more responsive to change. This would include massive shocks like COVID-19.
So let’s be more Agile in our leadership and governance practices.
Agile principles as a methodology have spread business-wide since they were first written down by a group of very smart, forward-thinking software developers in 2001 but their use has almost become meaningless.
Agile does NOT mean wandering along aimlessly without a plan, in a ‘suck it and see’ type of way. In fact Agile without strategic planning is meaningless, and strategic planning without purpose and reference to our values is also meaningless.
So has COVID-19 changed the things we all value? No, rather it has brought them into focus, short and sharp.
A change in values
It’s been happening over time but this gradual mind-shift in our collective value set has really come under the spotlight under level 4 lockdown conditions.
There can be no doubt that in a fast-moving crisis the core values of Agile have resonated.
We value:
Individuals and interactions over processes and tools
Working solutions over comprehensive documentation
Stakeholder collaboration over contract negotiation
Responding to change over following a plan
Just at the original authors noted, “while there is value in the items on the right, we now value the items on the left more’.
These values will hold true as we try and make sense of the economic shock of COVID-19 and in the way in which we will now lead and govern our companies to continuously stay relevant and therefore profitable in the ‘new normal’.
To demonstrate what this looks like, We have framed up some principles to show how we might rethink traditional governance in the context of Agile.
Agile governance methodology
In the spirit of the Agile movement, We have kept it simple. We have adapted the founding principles of Agile from the meeting of IT minds 20 years ago to how we might govern now in the real world.
The resulting principles may provide a useful framework for business leaders in the ‘new normal’.
The 14 principles of Agile governance:
- Always start with your values, then make your plans.
- Prioritise stakeholders using early and continuous communication of valuable decisions and directions.
- Welcome changing risks and opportunities. Agile processes will harness change to maintain the company’s competitive advantage.
- Keep it simple – minimise the amount of unnecessary work.
- Continuously deliver minimum effective solutions when you as a Board tackle problems or opportunities. Always ensure constant progress in small steps.
- Monitor strategic and accountability trends regularly: monthly, quarterly, and annually.
- The GM, the Chair and the Board and committees must work together often using an annual programme.
- Build Board projects and initiatives around motivated individuals. Give them the environment and support they need and trust them to get the job done.
- Where possible use face-to-face conversation – the most efficient and effective method of conveying information to and within a Board team.
- Use effective decision making as the primary measure of progress.
- Promote restorative development. The Shareholders, Board, and Management should be able to maintain a constant pace together indefinitely.
- Pay continuous attention to technical excellence and good circular design to enhance agility.
- Promote self-organising teams to achieve the best solutions, policy, and needs analyses.
- Reflect, at regular intervals, on how your leadership team (or Board / Advisory board), can become more effective. Then constantly tune and adjust your behaviour accordingly.
How do we apply these principles in real life?
Chartered Members of the Institute of Directors in New Zealand find it useful to frame their thinking around the guidance given in The Four Pillars (recommended reading) which succinctly lays out the role of a board as:
- Strategy – to define the purpose and decide the company direction.
- Accountability – to monitor how the management is doing. Are they achieving the outcomes and goals that were agreed upon?
- Compliance – to decide if remedial action is required and ensure management takes it early, through both motivation and accountability interventions.
- Culture – to assess if the Board has the skills and operating processes to work effectively together and set the tone from the top.
Our Boards and/or Advisory Boards must make effective decisions within these four areas of work. Then by applying Agile governance, be relentless in helping to define and redefine specific minimum effective solutions and then not be afraid to act.
Looking forwards
In my experience, Agile governance works. Matching risk appetite, traditional power structures and so on, all hinder progress. No company can afford this as we emerge from lockdown into what might be one of the worst downturns in a century.
Recessions make or break companies but some of the world’s most successful companies were recession start-ups. What we learn is that when times are tough, boards must enable innovation and allow creative thinking to flourish.
View a recording of our webinar ‘Agile Governance: why we need this in the ‘new normal’