Will the Agile Enterprise Outpace the Lean Enterprise?

“The problem is not with the techniques. These work. The problem lies somewhere in the mindsets and behaviors of managers and employees. ”
–Jim Womack

What’s good for the goose must be good for the gander – right?

As more and more technology teams experience benefits with Agile ways of working, the Agile community and the organizations they serve are looking for the next frontier. Some have branded this as “Business Agility”. Others have coined it the “Agile Enterprise”. This is reminiscent of the leap from Lean Manufacturing to the “Lean Enterprise” in the 1990’s. A leap that’s still in mid-air with mixed results almost 30 years later.

The aspiration of both the Lean Enterprise and the Agile Enterprise is the diffusion of a way of thinking and working from one part of an organization to the rest of the organization and beyond. In the case of Lean, the diffusion spread to other industries like Healthcare. A 2017 State of Lean survey of Lean experts highlighted 3 findings:

1. Lean is still viewed as a management fad
2. Senior leaders don’t get it
3. The discipline of PDCA learning is still a challenge

My simple acid test is: “Does your organization still have a Lean Improvement Office or Lean Center of Excellence?” If it does then you still have a very long road ahead of you.
Is the Agile Enterprise destined for the same fate? What can we learn from the lessons of the Lean Enterprise?

I believe the Agile Enterprise will progress faster and have a greater impact than the Lean Enterprise.

What’s the relationship between Lean and Agile?

Many years ago, I was a senior technology leader actively engaged in an Agile transformation. I was part of what our consultant Agile coaches called, an “Agile-Lean Transformation Team” or “ALTT” for short. At the time, I didn’t understand why it wasn’t just an “ATT”. What did Lean have to do with Agile?

I learned over time that Agile ways of working were deeply rooted and influenced by the Lean Thinking that came out of the Toyota Production System (TPS)

Lean’s prime directive is made up of 5 principles:

1. Value
2. Value Stream
3. Flow
4. Pull
5. Perfection

Agile’s prime directive is the Agile Manifesto made up of 4 values and 12 principles.

If we examine the prime directives of both, we’ll see that Lean and Agile are joined at the proverbial hip.

• The Quest for “Why?”. Lean’s first principle is focused on Value. “Value” is anything the Customer would pay for. In fact, in the absence of Value, everything is “muda” or waste. The Agile Manifesto was borne out of frustration with the state of software development at the time. Features were wearily developed and delivered that were defective or never used. In a word, muda. There had to be a better way.
• Customer Obsessed. Lean’s Value Stream runs end-to-end horizontally across a business starting and ending with the paying Customer. Satisfying the Customer is Agile’s highest priority. The Customer is the center of the Lean and Agile universe.
• Role of Leaders. Lean viewed managers as “system builders” that worked respectfully and collaboratively with their staff on Gemba walks to fix and improve the flow of the system. Leaders in the Agile world provide the environment, support and trust that teams need to get the job done. Both implore management to resist the urge to push work onto people in favor of letting people pull work only when they’re ready.
• Continuous Improvement. Kaizen enables Lean practitioners to take on the Sisyphean task of striving for perfection. While at the same time guided by Pareto optimality to check that no one is worse off and some individuals and organizations are better off. The Agile retrospective strives for the same. Both are grounded in Deming’s PDCA cycles.
• Layering. Lean can be implemented in “fragments”. Using the plethora of Lean tools such as 5 Whys, Kaizen or Kanban will yield benefits including cost-savings. In fact, this was the focus of the Lean Tools Age (1990-2005). However, the benefits will be piecemeal, short-lived and a fraction of what’s possible. It’s analogous to “doing” Agile practices. Both Lean and Agile have deeper layers that involve thinking beyond the tools and practices. Layers of “being” and living the Lean or Agile mindset. If you peel back these layers on the Agile side, some Agile practitioners have anecdotally observed improvements grow from 20% to 3X.

What are the biggest rocks impeding Lean Enterprises?

Jim Womack is a prolific proponent of Lean Production and Lean Thinking. He founded the Lean Enterprise Institute in 1997 to advance and disseminate Lean Thinking. In 2005, he reflected on the State of Lean. On the surface, things were going well. Toyota, the darling of Lean Production continued to increase sales and share in all markets. Lean Thinking was spreading and growing in popularity globally and across industries. However, he could see rocks below the surface.

• Many managers didn’t know what to do after implementing Lean tools.
• Those organizations that had knowledgeable Lean improvement departments struggled to teach others what to do.
• The further an industry was from manufacturing, the vaguer the methods and the more confusion in management about what “lean” really is.
• The senior leaders within organizations were still comfortably wedded to the traditional financial and strategic thinking mindset. The lean mindset was foreign and unfamiliar.

Fast forward almost 15 years later and those rocks are quite visible above the surface. I see 3 boulders standing in the way.

1. Horizontally Challenged. According to Jim Womack, “In most organizations… the product’s (horizontal) value stream is an organizational orphan.” Customer value flows horizontally across the enterprise while knowledge and careers are managed vertically. The Lean community’s call for Value-stream managers has gone largely unanswered. Perhaps it reminded many of “matrix management”? Matrix managers had all of the accountability with little to no influence over what got done. For those who are familiar with Conway’s Law, Taiichi Ohno (the father of TPS and Lean Manufacturing) believed the shop floor was a reflection of management hence mirroring the state of the value stream.
2. Management Resistance. The problem of wider Lean adoption lies not in the methods and techniques – they work; it lies in the mindsets and behaviors of management and employees. It starts with managers unwilling to go to the Gemba preferring, instead, empty rituals in the comfort and familiarity of their conference rooms. Einstein said, “No problem can be solved from the same level of consciousness that created it.” In this case, problems can only be solved where they live. Add to this inertia of managers, the inertia of employees unprepared to proactively act and take risks. The sum is a vicious cycle of status quo.
3. Organizational Edges. Remember that scene in Eli Goldratt’s book, “The Goal” when Alex and the team realizes the problem was no longer production? It was Sales and Marketing that limited further growth and needed to change their thinking. Even if aspiring Lean Enterprises made progress on the first two boulders, this third one may have limited growth within the value-streams. Was it too much of a stretch to ask other parts of the business to adopt Lean? Perhaps it would’ve been enough to just start with a common, shared goal. In the words of Deming’s 14th point for management, “Put everybody in the company to work to accomplish the transformation. The transformation is everybody’s job.” The challenge would’ve been to agree on what “transformation” meant. Could the problem with the Lean Enterprise have been a confusion between the ends and the means? How many of us still have the mugs with “Go Lean” on them?

The rise of the Next Enterprise

The Agile Enterprise will progress faster and further than the Lean Enterprise for 3 reasons.

First, Agilists will not refer to the Agile Enterprise as the Agile Enterprise. Many experienced Agile practitioners don’t talk about Agile anymore. What they talk about with their clients is:

• High performance cultures
• Business outcomes
• Happy staff
• Customer ecstasy
• Social sustainability

A return to all things which hold value for the clients. Value is the first principle of Lean. So, Lean had it right. But somewhere along the Lean journey, the Value message got overshadowed by a pre-occupation with the Lean tools medium. It doesn’t appear the Agile community will stray down that path. So rather than refer to this as the Agile Enterprise, I prefer to call it the Next Enterprise.

Second, the translation from software development to the office will be easier than the translation from manufacturing shop floor to the office. It was the shop floor that gave rise to the traditional scientific management paradigms. It also created the distinction and segregation between blue-collar and white-collar workers. I could imagine the quizzical looks on the faces of office workers when Lean practitioners first approached them about the merits of Lean manufacturing for the office. On the other hand, software developers and office workers share similar trials and tribulations as knowledge workers. They often work shoulder to shoulder. Unlike the shop floor, much of what knowledge workers do is invisible. Anything that software developers do to unhide work would resonate with office workers.

Finally, the perception with Lean is a focus on process and tools. Perhaps this is because Lean assesses the efficacy of its efforts by looking first at Purpose, then Process and lastly People. Agile leads with people-centered values and principles. A focus on People first will unlock more possibilities than we could ever imagine for the Next Enterprise.

This is not meant to infer that Agile is better than Lean – whatever ‘better’ means. The existence of Agile is due in large part to the insights gained from TPS and the efforts of the Lean community to advance their craft. Without Lean, there would be no Agile.
And yet wasteful debates continue in our communities. A colleague of mine told a story of how he asked a Lean practitioner to help train Agile practitioners in the use of specific Lean tools. The Lean practitioner declined fearing that it would create a competitive situation and adversely impact his Lean consulting business. I see some of that behavior from Agile practitioners towards the DevOps community. When it comes to the Next Enterprise, it’s not a zero-sum game. The Next Enterprise will benefit from Agile, Lean, DevOps and anything else that helps deliver business value.

There is so much to learn from each other. We can start by all going on a walk together to the Next Enterprise…