AGILE BUSINESS MANAGEMENT MANIFESTO

Seven principles of agile business management


Recognize the entire ecosystem and its community

Why?

Traditionally we view a business as a hierarchy. For agile business management we need to take a different view: 

  • To view the business as an ecosystem, a network of elements,
  • For which flow of energy (in business: of money), of matter (in business: products and services) and information (between the elements in the network) determine performance,
  • And health of this flow determines sustainability of business.

See book by Bernard Lietaer, "Towards a sustainable world"

Ecosystem

  • The business ecosystem comprises all elements which support of hinder these flows, within or outside of the businesses elements.
  • Customers and customersĀ“ customers, competitors, partners, regulators of compliance, suppliers and suppliersĀ“ suppliers.
  • Each element comprises the people working in it. All people in the ecosystem define the ecosystems community, its social system.

Focus efforts on one single goal: Sufficient revenue/Income

  • Traditionally we manage a business by tracking performance of processes and responding to "off track" situations.
  • In the accelerated world this approach is too complex, too slow and not flexible enough.
  • To make a business agile - faster and more flexible - managers must focus on the one single vital goal "sufficient revenue for today and tomorrow" (in accounting terms, income in the income statement)
  • This is a priority decision: other goals may also be of importance, but only if they are necessary conditions for the overriding, prime goal.

Give priority to income generating units

Again a decision to set focusing priorities, to enable agile business management: 

  • Traditionally we manage all functions with equal priority of each, in their own view. Again, too slow in the accelerated world.
  • With the single vital goal in mind managers must give highest attention to units which generate income/revenue. There, we need to manage reaching each unitsĀ“ goal.
  • What about all the other units? Finance, I.T., Marketing, Manufacturing, procurement ...?
  • For agile business management these are contributing units - assisting the income generating units to reach their goal.



Select only initiatives resolving constraints

And again a matter of focussing on the essentials - enabling business agility.

  • Traditionally managers are requested to "improve everything, always".
  • Unfortunately, this principle leads to waste of time and money, and reduces business agility.
  • The agile point of view instead is - as E.Goldratt stated - "Improving anything but a constraint is a waste of time and money"
  • Any initiative must stand the test "which constraint to the goal does this eliminate?"
  • Only by applying this principle a business will focus on its optimal portfolio of initiatives
  • Such decision requires tough logic analysis and decision making - but it is key to "doing the right things instead of doing things right"

Drive short operational sprints for execution

  • Traditionally managers design strategies and longer range business plans and deploy them top-down in the organization.
  • Again a challenge for business agility: often, by the time deployed plans arrive at the execution level, the assumptions they are built on have changed.
  • As William A. Woehr, author of Unblock the power of your sales force showed - in worst case top management strategies and longer range plans are out of synch with real world problems experienced at the operational level.
  • Agile managements solution: execute operational plans in short operational sprints.


Respond to change after each operational sprint

  • Experience teaches managers that most operational plans need to be revised at least every three months.
  • For agile business management this is a habit, resulting in a revised plan for the next sprint.
  • Agile managers call this "spinning the PEC (plan-execute-check) cycle.
  • The spinning speed of this cycle determines a businesses competitiveness: spinning the PEC cycle faster than competitors lets a business win.



Lead the change

  • Compared to traditional approach to managing a business, agile business management is a new paradigm, a change of mind, an upgrade of management capability.
  • This change does not happen by itself - it requires constant leadership effort by top managers.
  • Progress shows in how well a business achieves its vital goal and how well it delivers its operational sprints.
  • Top class agile businesses excel in both.