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In today’s world, everything is accelerating. In fact, acceleration is a monster wave coming the way of every business. Experts say the only way to avoid being submerged by this wave is to transform the traditional leadership model to agile management. The way to do this is to overlay a second management system over the traditional hierarchical approach, with the two working together synergistically. Agile business management is quite different from agile project management, but we can learn a great deal from the experiences in the software business as they transformed to agile project management. In agile business management, business leaders lead by the seven principles of agile business management, with full accountability at all levels and clear, engaged leadership from the top.  

In this article, we discuss the key drivers behind the need to adapt agile business management and explain how it works. Understanding what is meant by business agility is just the start. However, this is an essential first step.

  • Acceleration has become the single overriding, dominant force in our world. 
  • Climate change accelerates, Covid accelerates, political development accelerates.
  • Same for businesses: customer needs change faster and faster, sales and marketing accelerate, supply chains accelerate, service of all kinds accelerate, as do our competitors -  to name just a few examples of business processes accelerating. 

Traditional management can´t cope.

Experts saw this coming already years ago – as for example John Kotter of Harvard Business school in 2012, as did Henry Mintzberg and Claudio Feser of McKinsey. 

Coping with acceleration is now a matter of winning in competition

in competition with other businesses the business with higher agility will win over its competitors 

The answer is a second management system

Quote from John Kotter´s article “Accelerate!” in HBR, Nov. 2012:

The existing structures and processes that together form an organization’s daily operating system need an additional element to address the challenges produced by mounting complexity and rapid change.
The solution is a second operating system, that uses an agile, network like structure and a very different set of processes.”
Kotter then lays out the unique features of this “second management system”:

  • The new operating system identifies key hazards early enough,
  • Formulates strategic initiatives nimbly,
  • Implements initiatives fast enough,
  • And reacts with agility, speed and creativity.
  •  This is not an “either or” idea, he writes,. It’s “both and.” I’m proposing two systems that operate in concert. 

This new, second operating system is agile business management. 

Our illustration shows these two systems – with agile business management positioned as a second system and complementing traditional daily management, with its hierarchical structure, leading by key performance indicators and optimizing process performance.

Manifesto for business agility

A group of experienced agility consultants in our consulting network laid out seven principles for  agile business management:

First, the purpose, the goal of agile business management: it is to achieve sustainable business success in our accelerated world 

Second, the seven principles of agile business management: 

  • One: Recognize the business as ecosystem,
  • Two: Focus on one single goal, revenue,
  • Three: Give priority to revenue generating units,
  • Four: Select only initiatives resolving constraints
  • Five: Drive short operational sprints
  • Six: Respond to change after each operational sprint
  • And seven: Lead the change to adopt agile business management