How CEOs Keep Agile

Transformations Moving
By Martin Danoesastro, Benjamin Rehberg, and Grant Freeland

H ere’s a complaint we’re hearing Start with Why

more and more frequently from client New ways of working are not goals in them-
CEOs. “I’ve got a bunch of agile pilots selves: they are a means to an end. To mo-
going. Many are actually working. I’m bilize the troops and keep everybody on
seeing results, but they’re not transforming track when times are rough, leaders articu-
the company. They’re not having the full late why they want to change: What are the
impact I expected.” objectives and desired outcomes? Changing
is hard work, and in the face of difficulty,
There’s no question that making the transi- people tend to gravitate toward the old and
tion to agile ways of working, especially at familiar ways. Moving beyond the tipping
scale in a large and complex organization, point in agile transformations requires a
is a tall order. Agile transformations that shared conviction that continuing the way
stall or fail to reach the transformational the company has always done things is not
tipping point are common. good enough. Setting new standards in cus-
tomer service, getting products to market
Successful lighthouse projects can estab- before competitors, disrupting the industry,
lish momentum and achieve scale as the achieving step changes in productivity, and
results roll in and the organization gains winning the war for talent are all examples
understanding of what agile can accom- of objectives and outcomes that organiza-
plish. But the extra push from the CEO— tions can rally behind. People need to know
and the leadership team—can play a cru- why the new ways of working are critical.
cial role in getting over the inevitable
hurdles. On the basis of our experience,
we have identified five things that success- Adopt the Principles, Adapt
ful leaders do consistently—and consis- the Practices
tently well—to keep their transformations At its core, agile is a set of cultural values,
on track. principles, and behaviors, rather than a set
 of specific practices. Adopting values, prin- pelled most of them into senior leadership
ciples, and behaviors can be done success- positions in the first place. Many leaders
fully only by shaping the context in which find that they are required to unlearn what
people work. made them successful, and for more than a
few, this is a bridge too far. CEOs need to
Depending on the nature of the underlying recognize that agile transformations almost
work, the contextual solutions will differ. certainly require at least some changes in
New ways of working on the interface of the composition of the leadership team.
business and IT will likely include ele- These are tough decisions because the ex-
ments of, for example. agile scrum and de- ecutives in question haven’t done anything
sign thinking, while customer service and wrong. Still, making the necessary changes
operations activities may benefit more has two benefits. Most important, it puts
from lean or the self-management practices the people who will help drive the transfor-
of Holacracy. mation into critical roles. It also sends an
unmistakable message to others who might
For an individual team or a startup, specific be sitting on the fence of change: they
practices and ceremonies go a long way to- need to get with the program before they
ward leading people to “live” the aspired-to encounter a similar fate.
cultural values and principles. But spread-
ing values and principles across hundreds
of teams in a large and complex organiza- Align to Empower
tion requires addressing almost all ele- Small, cross-functional, empowered teams
ments of the operating model to set the are at the core of every agile organization.
context in which agile behaviors can take The ability to act autonomously spurs own-
hold and thrive. This level of change almost ership and creativity, enabling teams to
certainly needs to be driven by the CEO, as make quick decisions and move fast. But a
it often includes widespread alterations in high degree of autonomy works only when
such areas as governance and funding mod- there is also a high degree of alignment in
els, organization structures, incentives and and among teams. A key role of agile leaders
performance management, location and is to ensure strong alignment around overall
sourcing strategy, measurement frame- company purpose, strategy, and priorities.
works, and technological enablers. Leaders need to communicate their intent,
explaining both the why and the what, and
they need to let go, releasing their teams to
Change Your Leadership figure out how to address their specific as-
Nothing leads like an example. Leaders signed challenge. The more alignment that
should push themselves to adopt agile leaders are able to establish, the more auton-
ways of doing things and publicly demon- omy they can afford to give. Leaders can
strate their own changing behaviors. The spread and reinforce alignment in a variety
public aspect is important. To signal of ways that include modeling their own be-
change at one company, executives in cer- havior and strengthening governance mech-
tain divisions gave up their offices so that anisms, measurement frameworks, and per-
the company could create team rooms. At formance management practices.
another, executive team members commit-
ted to holding weekly “town hall” meetings
in the company café. In addition to provid- Learn and Adapt—at Speed
ing general business updates and answer- Agile puts a premium on feedback and les-
ing questions at these meetings, individual sons learned: adapting to change is more
executives spoke about their personal- important than following a plan. This rule
development agendas. applies even to the agile transformation it-
self. Of course, the transformation must be
Getting experienced leaders to change well thought through and carefully
their behaviors is not easy. After all, agile planned, but leaders must also be open to
behaviors are not the behaviors that pro- modification and adjustment along the

The Boston Consulting Group | How CEOs Keep Agile Transformations Moving 2
 way. Inevitably, there will be setbacks and that time frame—in some instances to less
challenges, but strong leaders are the ones than a year. The biggest counterweight to
who have the ability to learn, adapt, and resistance is momentum, and nothing
change course when things go awry. builds momentum like speed. Like loosen-
ing controls, moving fast can seem risky.
Transformations, which are often de- But the bigger risk to the transformation
scribed as journeys, can take two or three lies in not changing fast enough.
years. We are seeing more CEOs tighten up

About the Authors

Martin Danoesastro is a senior partner and managing director in the Amsterdam office of The Boston
Consulting Group and global coleader of agile at scale for the People & Organization practice. You may
contact him by email at [email protected].

Benjamin Rehberg is a partner and managing director in the firm’s New York office and global co-
leader of agile at scale for the firm’s Technology Advantage practice. You may contact him by email at
[email protected].

Grant Freeland is a senior partner and managing director in BCG’s Boston office and the global leader
of the People & Organization practice. You may contact him by email at [email protected].

The Boston Consulting Group (BCG) is a global management consulting firm and the world’s leading advi-
sor on business strategy. We partner with clients from the private, public, and not-for-profit sectors in all
regions to identify their highest-value opportunities, address their most critical challenges, and transform
their enterprises. Our customized approach combines deep insight into the dynamics of companies and
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achieve sustainable competitive advantage, build more capable organizations, and secure lasting results.
Founded in 1963, BCG is a private company with offices in more than 90 cities in 50 countries. For more
information, please visit bcg.com.

© The Boston Consulting Group, Inc. 2018. All rights reserved. 7/18 Rev. 1/19

The Boston Consulting Group | How CEOs Keep Agile Transformations Moving 3