Understanding Agile Leadership
I recently went one on one with Steve Berez, a partner at Bain & Company and co-author of the new book Doing Agile Right. Steve is a founder of Bain’s Enterprise Technology practice and was most recently its Americas head. Steve is also a senior leader in Bain’s Agile Innovation and Healthcare practices.
Adam: Thanks again for taking the time to share your advice. First things first, though, I am sure readers would love to learn more about you. How did you get here? What experiences, failures, setbacks or challenges have been most instrumental to your growth?
Steve: I first joined Bain & Company right out of engineering school, and, as is common in management consulting, I left after a couple years to go to business school. Rather than returning to Bain right after that, I worked for several years in my family’s consumer products business. I would have to say I met with mixed success there, but I learned a great deal from the experience that has served me well as a consultant.
I am now in my 30th year at Bain, and let’s just say I haven’t had the most traditional career path here. In part that’s because I’ve been one of the first to take on new roles, and in part it’s because some aspects of the consulting job don’t come naturally to me—they required concerted effort to learn new skills.
Along the way, I had the privilege of helping to found and be a leader in Bain’s Enterprise Technology practice, and I recently co-authored my first book. I have encountered many, many businesses over my career, and there is no other organization I would be prouder to call my own.
Adam: You recently co-wrote a book on how Agile can help business leaders navigate and recover from our current crisis. Can you elaborate on your thesis and explain what leaders should understand about Agile and why? And perhaps most importantly, what can and should they do?
Steve: We wrote Doing Agile Right to help business leaders achieve the most value from Agile by understanding how to make Agile principles and practices part of a balanced management system. We also wanted to help them avoid the many pitfalls that commonly arise along the journey. While we wrote the book before the current crisis, we are hearing from readers that the themes are even more relevant and valuable in addressing the crisis and its aftermath.
Our thesis is that Agile practices are the best method for businesses to innovate rapidly and effectively. Yet we believe traditional management practices, alongside Agile values, are best for businesses to operate reliably and efficiently. We also believe these approaches to innovation and operations must be harmonized. We call businesses that do all three of these jobs well “Agile Enterprises.”
We see too many leaders who get enamored with Agile by hearing about successes in other companies, and then use their traditional command-and-control techniques to try to adopt Agile in their own company. They hire consultants to develop a detailed, comprehensive transformation program. They instruct everyone in the organization to adopt the new model. They carry out Agile loyalty tests and jettison skilled employees who don’t toe the line. They say things like “Burn the boats. There is no turning back!”
Of course, commitment is important to any change process. But problems arise when commitments turn into inflexible commands and controls. This leads Agile to become a bureaucratic club rather than a tool for helping people become happier and more successful.
Agile, done well, requires humility from leaders—not a false humility that belittles self-confidence, but the sort that accelerates learning and bolsters the confidence of every team member. Humble people recognize the futility of predicting the unpredictable and instead build rapid feedback loops to ensure that initiatives stay on track. They understand that good ideas can come from anyone, not just from those with the highest status. They view their job as helping team members learn and take responsibility, rather than telling every team member what to do and how to do it. An Agile leadership team has to adopt such attitudes, or its Agile pronouncements will ring hollow.
When we advise senior leaders, we recommend an approach that begins by describing a compelling and credible vision and a strategy for achieving it. Describe it passionately, describe the potential benefits, and admit that parts of the strategic hypothesis may need to adapt. Identify the assumptions that must hold true for the strategy to succeed, and then create a prioritized and sequenced list of activities that move the organization toward that vision, while testing assumptions and adapting along the way.
Don’t be afraid to admit what you have learned, and remember that employees are the customers of your change process—not robots for executing it.
Adam: In your experience, what are the defining qualities of an effective leader? How can leaders and aspiring leaders take their leadership skills to the next level?
Steve: The most effective leaders I know focus on their employees and customers rather than themselves, they model the behaviors they seek from others, and they are humble and always working to learn. So these are some things you can do to become a better leader:
Focus on the customer. Understand and meet their needs; as a leader, recognize that your employees are customers too, and they will be far better able to meet external customer needs if their own needs are met.
Be a role model. It might sound trite, but don’t ask others to behave in ways you aren’t willing to model yourself.
Be humble. Ask genuine questions, listen carefully, and recognize that you don’t have all the answers.
Adam: What are the best lessons you have learned from building and leading Bain’s Enterprise Technology practice?
Steve: Technology capabilities work best when approached in an integrated, cross-functional way. Bain’s Enterprise Technology practice is highly integrated with the firm’s other practices, including industries such as Healthcare and Financial Services, and capabilities such as M&A and Customer Experience. This required far more effort to harmonize skills and culture than building a standalone technology unit, but it is also a far more effective way to help our clients achieve their technology-related goals.
Back in the late ‘90s, I was more enthusiastic about the idea of building a robust Enterprise Technology practice than some of my peers at the time. What I learned is that being early to recognize a customer need can be exciting, but a bit lonely. Nonetheless, if you stay true to how your firm can best serve customers, you are likely to succeed in the end. Since then, my colleagues and I have advised many of the world’s most influential companies on their toughest technology challenges, and it’s been a fun ride—totally worth that initial period of uncertainty.
Adam: What have you found are the most common pain points among organizations when it comes to technology and what have you found are the common areas of opportunity?
Steve: Companies are under increasing demand to build new digital capabilities. Software development, at its heart, is an innovation activity, so this is one of the most important places for companies to use Agile teams. However, while we see many organizations with lots of Agile technology teams, we don’t see many truly Agile technology organizations. In other words, companies are going through the motions of Agile, but not getting much of the benefit we would expect in speed, flexibility, and most importantly, fit to customer needs.
I’ve seen two patterns behind this paradox. The first pattern is that many firms think of Agile software development as something that lives solely within the four walls of the IT department. They miss the critical roles played by other parts of the company, such as:
Senior leadership, which sets the tone for trust, respect, safety, experimentation and other cultural elements that are critical to the success of Agile;
Members of the business functions, who will use the software, working alongside the engineers as internal customers; and
Finance leaders, who create planning and budgeting systems that empower Agile teams to guide their work based on customer value rather than preagreed project deliverables.
The second pattern involves IT leaders who put too much faith in Agile to solve their problems, while underinvesting in necessities such modular architecture, automation, data management, advanced analytics and engineering skills.
Adam: What are your best tips for technology entrepreneurs and for leaders of technology teams?
Steve: Take a holistic and balanced approach to improving the effectiveness of your technology teams. Use retrospectives and other feedback loops to identify the full set of improvement opportunities. Organize and prioritize these opportunities as an Agile backlog, and focus on making progress with a few areas at a time until other areas become the greatest opportunities. Most importantly, empower your teams to drive their own improvement. Once you have aligned with them on desired outcomes, spend your time helping to remove any barriers they are facing.
Adam: What are the most important trends in technology business leaders should understand?
Steve: As technology innovation becomes increasingly central to the success of more and more businesses, they must adopt the best practices of technology leaders if they want to survive, let alone thrive. They must adapt IT organizations and systems that were not designed for the level of innovation and strategic capabilities now being asked of them. That means supporting their IT leaders in adopting the techniques and tools I’ve discussed here, such as Agile product management and software development, modular architecture, and upgraded engineering skills. As importantly, it means doing their part in helping their organization move toward becoming an Agile Enterprise, which aligns the entire organization to make the Agile technology teams most effective.
Adam: What are your best tips on the topic of client service?
Steve: Listen and be humble. These are particularly important in client service. But it’s also important to understand that in consulting, you always have two types of clients—the organizations that pay your bills and the individuals whom you serve. You have to keep the needs of both in mind in everything you do. At times it requires ingenuity and integrity to ensure you do what is best for each.
Adam: What is the single best piece of advice you have ever received?
Steve: Build and nurture a personal board of directors, which a friend counseled early in my career. Mine includes a few Bain colleagues I have known for decades, some close friends I’ve known even longer, my wife, and my son and daughter, now both in their late 20s. This group provides me invaluable advice and perspectives on both the business and personal fronts, and I couldn’t possibly have succeeded without them.