AA255 - What is Business Agility? The 5 Core Capabilities to Master

welcome to Arguing Agile. I'm Brian Orlando. I've spent over two decades in tech doing everything from Q.A. to development to product management to founding a company. And I have absolutely no tolerance left for any process that doesn't aggressively de -scale a business and make us nimble and get us ruthlessly tuned in to the customer. Hi everyone, I'm Om Patel, business agility consultant. I'm tired of watching leadership burn millions on framework costplay while their actual decision making is stuck back in the 90s oh, today we're completely tearing down the agile industrial complex and so that we can strip business agility back to the absolute basics. We're just talking about pure business agility today. Yeah. today we'll name the five absolute non-negotiable capabilities of real businesses. No buzzwords, no framework wars, just the organizational muscles you need to actually survive. Welcome back to Arguing Agile. If this is your first time, welcome. Like and subscribe because the majority of people that watch the Arguing Agile podcast on YouTube, about 75 80 percent are not subscribed. So we would appreciate if you get value out of this podcast to like and subscribe. With that being said, by the end of this episode, our promise to you is you'll be able to explain what business agility actually is to anyone in your organization up and down to the CEO all the way down to the brand new employee that just got hired yesterday. You'll be able to diagnose the five core capabilities that we have. This just we just the two of us have decided are the five core capabilities of business agility And you'll be able to tell how they're bottlenecking your company's revenue and speed and hopefully will give you the confidence to push back confidently when leadership says oh we have very mature mature business agility. We don't, we don't need any outside help or training or money. I guess. Does that happen? You know, so real bottom line evidence is what I'm saying rather than vibes. Yeah, because vibes don't pay bills. But they do code. They do. so the I'm showing on the screen, these are the things that we're going to be touching today, which I already talked about. So unlike a normal podcast, I would like to start this podcast with kind of an overview, which we don't normally do for the purposes of pacing But since this is a little more serious of a podcast, I want to start with the five pillars of business agility. When I do are arguing agile agenda planning. I have a five sections that I like to shuffle the agendas under to make sure that we're not doing too much of one thing like we do. Sometimes we do too much product management. And then I'll, I'll tell you, I'll be oh, I feel we've been a lot of a lot of product management. Let's do a team focus kind of thing or let's do a, yeah, you know, customer focus or a leadership focus or something like that. Right what we'll do is we'll introduce those five categories. And I think and I think and I hope that you'll find them pretty bulletproof. But I will say I am open to you pushing back ck to be like hey these are not great categories or they're better or maybe you missed a category or whatever. So what we're going to do is before we start arguing with the plant the tree from which we've been swinging for the last two 250 250 episodes. episodes. and I will plant that tree by saying there are five strategic capabilities that actually protect your bottom line when you are a business. number one sensing and responding. This is market feedback loops. if you're a big fan of the lean startup sensing and responding is for you. Yeah, definitely. This is this is the backbone of product management right here is oh, do something. Customers don't like it. If you don't get a signal, change it. Sensing responding, which is funny because we in terms of business agility. We said it's a business agility. It's a giant umbrella and all this stuff is under it. And then we just wrapped our arms around product management. Yeah, we're not done with the five, but yeah, that's what we started. Right? Yeah, yeah, yeah. A little thing that you might have heard of. It's called product management. A little thing. Yeah. Right. All right Speed to speed to decision making I call this in my other notes I call this decision velocity. You might hear me say decision velocity better. I like speed to decision making better than decision velocity. you hear us talk on the podcast about the cost of delay. That's in this if you ever heard us talk about John Boyd's concept of the Ooda Loop. Yeah. From the maybe the 50s or the 60s. I don't know when the Oyou do loops from. I can't remember that must be the 50s before then. We've had a couple of podcasts where we talk about Jeffrey Bezos and his A one way door decisions versus two way door decisions. That kind of thing decision velocity. Make a decision quick. Know what decisions that you can back out of and which ones you can reverse. Right. And then the Uda loop on top of that is always be sensing at the same time. So you can when you make a decision, you make it and you got the best evidence you have at the time. Yeah, and I think that brings me to a point where you know with these five I should probably emphasize these aren't working in isolation or not like our menu these can be applied in pretty much any order and to any degree you can do more of two and less of three etc. It just depends on the organizational context that you come from. Let's go on to the next one. number three is structural flexibility. And this doesn't just have to do with flexibility. Meaning like your work ethic or flexibility of process or whatever. This is not just This is reorganizing the business to chase a new market opportunity without causing six months of internal H .R. chaos and power struggles and department reords and you know, basically disabling your organization. You know, being like Amazon cutting 30000 jobs and basically completely disabling decision making for a period of time or the or the What's a what's the Twitter guy is a block. What's this? What's a Twitter guy that just fired half his company? Sorry, the Twitter guy. I can't remember his name. Jack Dorsey. Dorsey. Yeah, yeah. Yeah, Jack. Or the recent Jack Dorsey firing like 40 percent of the employees that block because there's a lot of like high profile people that really believe in Jack Dorsey. Sure. And I can't stop but thinking when we ran into the structural flexibility category of this seems like a person who says And honestly, if he said this, he would get a lot more credit for me of, you know, AI is it seems to me that it's transforming the way that tech workers work. And I don't know how to train my employees and nobody here. No, none of my other executives know how to do it. So we're just going to fire half our employees and then give the rest of the employees a lot more money to buy their own tools. And hopefully we'll figure out how to evolve our work to the next level. Right? I'm going to fire have my employees and let the other half self -organize into a better structure. Like I wanted, I almost wanted to redo our. I didn't want to because once I edited a podcast, it's not going to happen. But I almost wanted to redo our A.I. in the workforce podcast that we did with the specifically on the block situation to look at it to say you know, am I wrong saying that like CEOs are just cutting using an excuse because because Jack Dorsey seems to be cutting using as an excuse. Yes, but he is saying use these new tools to figure out how to be more efficient and faster and better at your work the other things that didn't make it into the media with the block layoffs were they gave everyone that I brought block up stayed like 100 percent salary bonus. They double everyone's salary. That's. So it's not like they save money doing that. No, no. But he put them in the news, which might have been one of the, you know, the agenda is here. True. True And it put them among the select few that are actually purportedly at least benefiting from leveraging A .I. Yeah. Right. At least on paper. Yeah. I mean, if you read about old Twitter culture, it was the same way. a ton of coordination problems and all kinds of software problems and stuff like that learned, they never brought people into the organization to help them develop this structural flexibility muscle. This, this, oh, knowing when our teams are not coordinating well enough and then separating, you know basically breaking down and rebuilding the team structures to be able to coordinate better, to be able to own things better. They never figured it out. And he went and he developed a whole new company. They blew up to 10000 employees and they also didn't figure it out. So at some point, you have to step back and be like, is this a Jack Dorsey problem? They that that that's where I came up to the edge of you know what, I'm just going to leave this alone. Yeah, that was a good idea. You're not allowed to like throw stones on Twitter at people like that to be like, maybe Elon Musk doesn't know what he's talking about. You're not allowed to say things like your friends are blocked out or something speaking of block and remove the next category. Distributed authority, which is decentralizing command and control. So you're going to stop paying six figure salaries to middle managers, which we did a whole podcast [UH] Oh yeah. The violent stoppage of of stopping paying middle managers all of a sudden just to pass messages up and down the chain and pushing the authority to the people that actually make the real day to day decisions and do the actual day to day work and actually have the data. But pushing authority down that's that's distributed authority. Absolutely. This is the stuff that David Marquette talks about. Correct. Yes. Move authority to where the information is and not the other way around. Probably the most pertinent book on the subject. Absolutely agree. It's a fantastic book. I think unfortunately the the model that he is promoting is not very common out there. And this is goes back to the stuff that we talk about frequently on the podcast. You know there's a lot of items that we talk about that emanate from the root cause of having bad orb design. Yeah. And this is part of that as well. Right. I think I, I think I want to challenge you though because I think the model is common. The issue is the amount of bad organizations to good organizations is like 95 percent bad. So you're saying the numbers. But [UH] is it common to have people have the authority where the information is or is it more common to have authority living up in the ivory tower and in being fed status reports if you had the magic wand to be able to survey every employee in every organization like every organization like private public everything. Yeah. Across the whole world. I think you will find the most elite most effective organizations. That is their de facto standard because I, I know for a fact because I read so many of the Jocko books and we did the, we did the Jocko book on the podcast Extreme Ownership. We did that with Ed in the extreme ownership book a Jocko Willink and Leif Babin talk about distributed authority pushing the decisions down to the unit commanders because when you're when you're removed from the fight and you're, you know, back in HQ or something like that, some security area or whatever, and you're far away from what's, you know, what's actually happening. You can't be playing armchair quarterback. You've got to let the people doing the thing make the calls. And so every elite organization that I would, I would, I would posit. I use that last podcast as I was so annoyed with myself in the editing. I would posit. You can't say it with a straight face. Yeah, I can't. It's so good though. It's such a such a such a dime store word [UM] No, you're saying that model is very prevalent. I would, I would suspect that that model is prevalent in all of the most elite organizations. There's not a lot of them is what you're saying, right? Yes. So that means it's not that prevalent in the industry [UH] there's not a lot of them and only a few of them are actually exhibiting this behavior. It's not prevalent. I understand what your challenge is, but there are only a few companies that are dominating the world. Right? Right So like on one hand, I understand what you're saying. Hey, it's difficult. On the other hand, it's difficult. But also like there are very few players at the number one spot. But I would guess that all the players are the number one spot. They got this. They got this Maybe solid. Maybe solid. Maybe. And then the last category is learning orientation. This is continuous evolution. And also every company that doesn't feel like they want to train their employees fails at this one. Every company that doesn't want to continually look at the way they're structured in their processes and do retros and actually do whole hearted retros. They fail at this one The executive angle is failing cheap versus failing expensive is what I'm talking about in this category. Treating the market as R &D versus doing your R&D before you get to the market. Right? You know, because oh, we can put money into this and have this team be testing constantly or whatever. But that team is showing, you know, their cost center. Right? That's why bother having Q .A. They're just a cost center. That's right. That's what the customers are for. I don't know maybe because we look maybe because we look like crap in front that we look like a bunch of clowns in front of the customer with a bunch of stuff that falls over and fails[UH] By the time that all hits the fan, I'm going to be long gone as Mr. Executive. So get on with it. Right back to your keyboard. Yeah, I mean this is so true If you're not learning as an organization fearlessly exposing everything there is to say you're not really, you don't really have a good learning orientation. Right? Right And there's so much depth to this that kind of goes back to psychological safety. Sure The work that Amy Edmondson has done in her books and her Ted talks etc And and you know the funny thing about psychological safety is like these categories. You don't need to be a pinnacle of psychological safety to also have all these categories. But I would, I would, I would posit again. Are you positing twice in a month positing all over the place I have a problem is what I'm saying. Where's Mike Miller at again? I want to reach out to him about that then. I'm showing these categories again on the screen And again, I would posit that you can do some of these without complete and total psychological safety. But just looking at the categories, not not many of them, not many of them. I mean, it's kind of a prerequisite. Yeah, I'd have to agree with that. I'd also say, you know, if you're looking at these and you're in an organization where you're trying to move the needle, why do people keep moving needles look at these and map out where your org is with respect to each of these. Right. Because starting from somewhere is the key and you don't know where that is. So just map these out. Pick a scale, any scale, but use a scale consistently. And then once you've mapped this out, do things come back to that same set and re evaluate where you've got to. Yeah. Are you moving in the right direction? Yeah. All right. So if you're a director or VP, someone with someone with a budget right now, right? Mentally, just you don't have to write anything down. They don't have to be any evidence that you were even here. Rate your company one through five on these, these categories, these five categories that we just outlined. Go back, rate your company one through five. OK, you might have an amazing product and engineering function in your business. But if every decision needs to go through this 12 week business case decision panel, with all kinds of information and research. And you have to wait for a decision. You have to go back and forth rounds with that panel to clarify things like your decision velocity is killing your potential market share. So this is not a new framework to buy. No. Right. It's a diagnostic tool to say our teams are not slow [UH] governance is broken here. Right. So that means we can then argue about the right fixes. Right. All right. So we talked about the five pillars. now that we have the five pillars out on the table, the way that I think about business agility. Let's start where most companies bleed cash. They confuse. We're doing agile with we are agile. Yeah. Yeah. Performative versus actual. Yeah. OK. everyone wants to tell their board we're agile or actually now in the age of A .I. It's we don't need agile anymore. We're we're way faster than that. We're way faster than what the agile folks say but this is like compared against the old school. You ran out and ran to your I .T. department and did something. Some agile was a function of your I .T. department. Right? Because you're thinking was very siloed in the organization. And even they weren't very agile. Right? But the in the halls of quote high maturity companies, most companies are out there still getting crushed by more agile competitors most, most big companies are still terrified of the, single digit number of employee companies that come into their market space and just destroy them or the Googles of the world that can break off an unlimited amount of cash. Don't ever need to be profitable. Just break off a team and say go sink this whole market and just acquire the whole thing. Yeah, we haven't heard a lot about Google invading someone's space in probably eight, maybe 10 years. But it was a regular thing at Google. So are we doing agile theater or do we actually have business agility? Yeah, I think this is a great question you know, a lot of, a lot of teams believe that they're agile because they're doing the mechanics. So I've got the BCG study. That's reference here It says why companies get agile. Right? Oh, that is interesting. Why companies get agile. Right? Hyphen and wrong. The BCG study from 2024. That's there's no date here when the study. Oh, I can download the article. That's probably better than looking at it on this terrible site. You got to scroll. Yeah, it's very low scrollability. In the in the takeaways category at the top of this BCG study. As much as I trust BG to tell me about agility, I'm going to give them the benefit of the doubt because that's I'm turning over a new leaf on this podcast. So their takeaways, they're there. Dare I say, executive summary says an in -depth research with 127 companies worldwide found that almost all 94 percent had embarked on agile initiatives with two thirds, 66 percent claiming successful agile transformations. So there you go. We our velocity is within reach. We are successfully transformed. Your services are no longer needed. There's a there's a door. Don't let it hit you. I like it. I like it. But but when asked which agile practices they applied and what outcomes they achieved, only about half 53 percent said they had realized their transformation targets and created lasting change in their culture, ways of working and ways of teaming. And the other half, the 47 percent. Thanks BGC because I couldn't take the other half of 53 percent are operating under the illusion of agility. They adopted the practices and are claiming some success but are not reaping the benefit of improved performance. That's their executive summary section. And they don't have any pictures. I like pictures. No. Here we go. Oh, this picture's. Yeah. one of the ones is that companies that achieved at least moderate success score of more than 50 versus those perceived themselves as successful. And the gray here is perceived success. And I'm guessing against actual success. So if this is like 91 percent, is this percentage 91 percent perceive that they were successful? But BGC is saying no, no, no, no, no. Like about 30 of that are not actually successful. They're just cosplaying successful company. They're putting on the glasses and a mustache disguise and pretending to be pretending to be Groucho Marx. Yeah. Yeah. I'm not saying I believe in BGC. I just want to point out even BGC is pointing out how bad some folks are out there about claiming to be in line with business agility. I think that I think that's the the core of what I'm pointing out here is the against in this category. If we're going to go back to our agenda on the podcast and fall back into form. Oh yeah. Most people are going to say, listen, we follow the scrum guide. We tick the boxes. We're, we're highly mature. Agile is that stuff is just for the software development teams people on the get. We sent our software development teams for certifications. They got the certs. They, they did the practices and and we check the boxes. Great. So we have all of these illusory measures of agility basically. Right. They have stand ups. They talk about story points. They're agile. Yeah. Nice. they said that's the against. We follow the scrum guide Yeah, right. And and the second bullet. So I see this a lot of the times. Oh, that agile stuff. It's for software teams. It's for software people. We don't do software here. We're H .R. or finance or legal. Yeah, but you know, you still operate in a certain way which could benefit from some of the concepts of agility if you can implement some of those things in the ways of working we're probably just about to flip over to the other side now for the force. Right? Yeah. So the first one ceremonies without business outcomes is agile theater. It's a puppet theater we're simply saying we're agile because we're doing all of these things. It makes you feel good. Right? These are the people that dress up every morning in their costumes and go to go to the gym, you know, and sing by Dunkin Donuts on the way back because hey, they're getting fit. They're doing things. They're, they're doing healthy. I mean, if you can do healthy, when I read about agile. If I'm on Reddit or you know, other random places on the Internet that reputable source read it. This is, this is the stuff that people are talking about. They're talking about the fake agile practices. They're talking about the agile theater out there. They're talking about the watermelon status reports out there of oh, we're on track. Our velocity is great. But then the, you know, the actual business value delivered basically any product management metric is, you know, way off, way off. I guess category one here is like agility is a bottom line capability versus a process is most people just get wrapped around the axle in the process and they never even get the sad part is they never even get to the underlying. benefit of any of this It's hard to get to the real benefit if you're going to stop short and say, hey, we conform and comply to practices this, the real basically. And that's it. when I worked at a company that intersected with the the public public sector, sector. I Right. mean, we We worked worked a a lot lot with with the the DoD Doddy and not for for profits. profits. So NGOs NGOs, that that kind kind of of stuff. stuff. Yeah in the government space. Apparently like they don't want their users to talk to like private companies like representatives from private companies. So they tried to gait off the back and forth conversations to certain people. Oh, well, you have, you have to talk to this person. They're the only people that authorized to talk outside of our, you know, unit or whatever. Right. And I'm hey, I get OK if you want to. But I'm just trying to do cool stuff over here. I'm accepting feedback from anyone. And especially when you try to set up a site visit to be like, I'm just going to kind of brace your work center and just like see how you use our software to see like what I can improve. But there are people that I wish I could have on the podcast to talk about. Like when I started working at the company versus when I stopped working at that company. It was just night and day of when I started working there. It was oh no, you have to go through the gatekeepers. You absolutely have to go through these people if you want. You know, otherwise you're not going. Nobody's ever going to talk to you. Whereas at the end it was like there are so many people that want to talk to you there's so many people who want to talk to you on a day to day basis. You're disappointing everyone by not being available all the time. I'm there's only one of me. Right? You know, it was only so many of our team members. And you know, we could be on different calls. But anyway, when you constantly push in that direction of we should be talking to the customers, we should be partners in developing and creating and delivering the software. And you keep pushing that for several years. Eventually you get to the point where you don't even recognize like where you started from. I can't believe that just two years ago we couldn't even get a meeting with these guys. And now you know every week they're calling us saying like why haven't you guys come back or whatever? Yeah, yeah. Yeah, it is. So one of the things that I've noticed is having worked in this space for a bit. Initially, it feels like you're pushing water up a, you know, up a hill with your bare hands But if you keep this up, right, eventually you start to see a difference. The key there is to have that negative feedback loop in place. Right. Where you're making a difference and then evangelizing that saying look if you do this this happens. You agree this is good for everybody. Right. So let's do some more. And then you start to build credibility. Yeah. Within you know within the company. So it's but it's hard Unless there's buy in from the top. In which case it's them saying hey this guy is doing this. It's working. You guys need to do it. That's different than you telling your peers to do it. That's a different podcast buy in from the top versus buy in from the bottom. and the ideal is and sell in from the middle. and you can step in here to tell me if this is true or not. I feel as an agile coach, the winning strategy is you want to attack both the like buy in from the top and buy in from the bottom and let the customer meet in the middle to tell you that oh, oh, everything you were telling us. Everyone agrees is right. And I can only imagine like your face would say like, yeah, of course. Yeah, it's a trifecta. So yeah, from the top, from the bottom and then the middle, they're selling out. They're saying we've gone away with it thus far. We need it. Soget them around. You know, we fired all the middle up. Yeah, I did that. Remember? Yeah, I did that. Yeah. All right. let's talk takeaways. Stop measuring meeting compliance. Start measuring time to market and cost of delay. When I say meeting compliance, I of course mean velocity and the, you know, the scrum and the scaled scrum meetings and that that kind of thing. Like I don't care about any of that. I don't care about any. I care about time to market. I care about cost of delay. Yeah, I also care about learning velocity, but that's not on here because there's a little advanced concept for category one in the podcast. But I care about that too. Yeah, I think if you stop short at just the performative agile practices, this was saying earlier, you've only just begun. Right. Keep going. Right. At the end of the day, those aren't really the success criteria. And I think some of that was in that paper from what I glanced on the BCG paper. let's wrap this section up. executive dashboard a watermelon? So green on the outside, red on the inside, red when you[UH] is your look a little deeper. So it's your fault for looking deep. Oh no I love, I love blaming the victim. Oh, you know, you know, I love that on the podcast. I mean, we could say like you just didn't hustle hard enough. That's right. You know, let us know in the comments if we were not hustled hard enough. And then next up is why the tech world is fighting about all the wrong things. We're going to talk about that right now. every fight that you see on LinkedIn or that I see on Reddit because as we know, that's where I get all my news I get all my news from Mark whatever Mark Zuckerberg decides to feed to me while I'm agitated. Anyway about agile being dead or teen topologies or whatever by Matthew Skelton and the other guy like it's actually just a fight about one of the five capabilities that we already brought up in this podcast. The problem is tech leadership is failing to translate this into a language that the business actually cares about. One day you're going to remember Manuel Pius. No, I remember Manuel Pius. The other guy Matthew Skelton. Oh, Matthew Skelton. The other guy won't listen. Listen, I listen when we did when we did arguing agile six seven. I reach out to those guys and they didn't respond. So they were busy developing their second book. We're looking at a study from 2019. Yeah. Received 2019 accepted 2020. Yeah. From 2020. OK It's called Organizational , ill-defined and somewhat confusing. A systemic literature review and conceptualization by Anna Teresa Walter. it says [UH] from a qualitative analysis, identify for agility categories, drivers, enablers, capabilities, and agility dimensions, I found this study and it's interesting because she digs way back in time that 1982 agility was first mentioned in the business context as quote the capacity to react quickly to rapidly changing circumstances. the paper is too long for us to go into. I bring up and say it's another source that points out again here in this quote there's a lack of conceptual frameworks that it intends to explain what agility in the organization means conceptually how the categories work and according for the latest findings how the categories are interrelated. And like that's part of the reason I wanted to have this podcast is some of the things that this paper is pointing out is like hey there's a lot of business cases here that are very important. But they're just not explained very well. even product management in and of itself could be considered a dimension of business agility. Of course, the product manager folks are never going to agree to that. They're never going to go elsewhere. We're special. Right? Yeah, everybody says that. Yeah, of course But the arguments here that you're going to hear That's a good segue into the against, I think. management folks say, hey, we're special. We deal with challenges that The product people don't understand. The argument here is going to be hey, the like you're just dealing with tech buzzwords like especially from the business side of it where you're trying to push agility into the business. Although like concepts like stand ups and whatnot have like basically found their way into the nomenclature in the zygous of normal business where people have never even heard of agility, have no idea what it is are doing daily setups And then the business, they need to understand like Dora metrics and you'll learn about these things that in a two day quote agile class. listen we're just, we're figuring out the best way to do things like. Yeah busy doing our day to day to worry about learning all these things because you know we've we're doing fine. That's right. We're doing fine. That's right. We're agile. So on the other side of the fence, on the floor. Yeah. We can't tie a technical change to one of those five capabilities that we put on the board earlier. Yeah. The business won't fund it. That's the four or shouldn't I should say shouldn't fund it. Let's see the other. the other thing here is that platform engineering is just structural flexibility. Two way door decisions is just decision velocity. we have a takeaway here. It's, it's it's clunky. Let me get through it. OK, because again, I, we have a lot of ground to cover here. It says mapped map all of your scattered initiatives by initiatives. I mean you're trying to improve the business internally. Use that mapping to explain to the CFO why, quote, more agile is not what you're shooting for. What you're shooting for is increasing the business capabilities, the capabilities of the business in which we have built, together. Right. It is more capable and more capable in these ways. And then your CFO will say, well, what is more capable mean to the bottom line? And then you will say, what the hell are you asking me? That's your job. Your job dude I think another way to kind of frame that is to increase the resilience the organization has. And part of that you're saying increases resilience. So what do you mean? part of that is also improving the ability to sense and respond quicker to changing stimuli from all and sundry. Sure. Right. I mean that's's one capability. Sure. But The list of five drivers here, sensing, responding, speed, decision making improving any of these is a business capability. Yeah. So if your CFO is asking like how does disturbing authority like affect our bottom line? I don't understand. Oh, you need to put the nuts and bolts together. And I don't know, like maybe maybe they're what they're saying. There is. I'm not a very, I'm not very good with numbers. Can you please do my job for me? CFO who's not very good with numbers. So, OK, so we have a Where do you go from here? We get a new CFO is what you do. Yeah. Okay. Get it out of replace the CFO. I mean, we're only one Twitter post away from starting the revolution over here. Listen, all I'm saying is we have some of our countrymen in the Bastille and there's a couple of us with pitchforks, a couple of us with torches. You have these five categories of business agility and within these categories. Again, if we're all one team, I would hope that your financial folks in the organization seeing these categories should be able to fit their operations into the categories rather than say well why would you why would you spend time sensing and responding the market there's no spreadsheet item for sensing and responding to the market. Yeah. Hopefully at the right level they can understand that though. Right. That these are critical things. Otherwise there is no space. You know, I would hope but also experience has taught me. Yeah. Right. Hope is not a strategy. That's what I'm saying right now. Absolutely this is a good mile marker for us to say How do we get here? How do we get here to the point where most most people in the business don't understand that we have to work on the business to improve the business at some point. And if you're saying, oh, I don't, I can't measure how you're improving our internal business process or team structures or team dynamics. I don't have a part of my spreadsheet for that. Therefore, it's not valuable. No, no, no, no like again. The product manager in me because I remember 20 years and I'm the junior on this podcast, 20 years. I hear that and I hear you don't know how to do those calculations. It sounds like you've got some learning to do. Can you please help the rest of the business rather than because I don't know how to do these calculations. It is a like the net value is zero. Yeah, it's a fruitless. That is, that is incorrect. The net value is not zero just because you don't understand them. That is correct. Yeah, absolutely I guess what we're saying in this section is which of the five capabilities is your biggest bottleneck. if finance is not helping you to make that determination, then oh boy, like it's going to be way more difficult. Like they really should be helping you with this. They should. But one thing you could do though is to lead with evidence. Bring in the data because agility actually works well if you don't fake it Yeah, a lot of things work better if we're both being genuine in our human relationship with one another. That's what I'm saying. Oh, let's let's all be helpful and try to be rowing in the same direction on this boat that we're in together. Oh boy. If only there was an easy way to get to that point. Yeah, there's an easy way. I just point and be like the holes in your side. Oh yeah perfect. Yes. Better shovel that water out faster. Yeah. Why are you shoveling water? I don't that's I don't know. But do it faster because holes on your side. Yes, I get that. Yeah, I get that for sure. It's your fault. The boat is sinking though. So which of these five capabilities that we talked about is your, your and your company's biggest bottleneck? Let's know in the comments Now on the podcast, let's bring in data because agility actually works when you stop faking what you're doing. so across hundreds of studies, true business agility is linked to massive financial outperformance. then why do so many executives and leaders that I met think that quote agile is just a 2010s buzzword million dollar question right there. cutting straight into the against in this section, Agile [UM] Number one and number two Agile is just stuff There's no ROI in for tech people. Right? There's this like we're we're highly regulated. We don't we can't use that or we're an H.R. department or we're the executive team or whatever. We can't use any of that. And also like we're Capital One. We we fired everybody who we fired. Say the word as you fired all the agile people. Yeah. Like the developers can do that now. Right. I mean both of these points are rooted in I think one one particular idea which is a complete misunderstanding of what agile really is all about. Right. Didn't improve our ROI. What were you actually measuring? What were you doing? First of all, what were you measuring? You know how are you linking performative agile that you're doing with what's on your bottom line? Oh, allow me to step in again, please we tried agile almost always at these companies. Means we bought Jira and we hired some entry level folks and call them scrum masters. And then we didn't change how we fund our quote projects. So you still have your annual budgets. were unhappy with the results. And then and then we when you align your business capabilities with strategy, your business. I'm talking the highest level folks in the organization, the people that set your business strategy. You're going to find out you go to the moon with your financial returns at that point. When, when, when your capabilities, meaning what my business can do is aligned with my strategy, what we should do those things together. OK, that's my definition of business agility. And when you find out that either a capability is not right or a strategy is not right, you look at the data, you figure out why you have a real, a real adult conversation about why. And then you do a shocking thing[UM] you adjust. Yeah, I mean, it's your, it's your execution of your strategy where the flaws may lie. Right? Strategy looks great on paper, but yeah, I agree So if you're thinking that, you know, you've got everything lined up right and you're ready to succeed with agile but you're not seeing the results, you could possibly just very easily hide behind what you just said, which is we've been doing agile for three years now. we have teams that do stand ups and all of these things. But yeah, at the core, you're still not really agile because you have these annual budgets. You're not thinking product. You're thinking projects. Nobody, nobody pays for a project. Customers pay for product So yeah, it's there's a misalignment in at least one of your capabilities and strategy We have a podcast on this topic by the way. It's called Agile Doesn't Work Here. It's Arguing Agile 83. Whoa, that's a while ago. It was it was a bazillion years ago. It was arguing Agile 83 is from October 14th, 2022. Whoa, 2022 was a bazillion years ago just looking through the chapter markers here you don't want to have dedicated teams. you don't align your incentives Your sales and incentives are disconnected you have middle managers that are washing out for themselves. You've got the fear of failure in your organization. So you don't talk about, you know, you don't talk openly about. You've got ego you know, you're not leading with vision. I mean, the chapter markers here are very telling about, you know, why you would say, Agile doesn't work here. We try to Agile once. Right. On the back of the napkin half heartedly without putting any money behind it. Yeah. And I'd say a lot of these same people are the ones now rearing their head saying [UH] just did It's not the people that have found Agile to succeed because they invested in it. I'm glad you're going down this road[UM] because if your leadership declared that Agile doesn't work here, but then structurally didn't change anything about the organization, didn't, didn't listen to the opening five minutes of this podcast where you outlined the five, the five pillars here. Right I mean, they're very busy. They can't listen to more than 30 seconds of you know click bait on HBR or whatever. if this is your leadership, let us know in the comments. That's what I'm saying. And keep that resume update. Oh, you might as well because if you're letting us in the comments. everyone in the C suite wants A .I. strategy and A .I. strategy. And we need to have an A.I. strategy. But here is the reality. A .I. doesn't magically fix broken business models. It acts as a stress test that amplifies whether you already have agility or it aggressively exposes how bureaucratic your organization really is. It's a mirror effectively. Oh no. And what do we know about mirror zone? We know if you don't like the mirror, you just break the mirror and get a new mirror. That's right. That means you will transform into a prince or princess right away. Well, I thought you were[UH] a frog. I don't know. Sorry, I got confused. I forgot. You're already a frog, right? I presume. I forgot. I like my green costume and I don't want to hop on a call with you. to introduce this category, we're going to, we're going to pull up the Business agility institute 2025 study. So we're looking at the business agility 2025 report it says and I quote A .I. does not create an advantage on its own. It amplifies the organization in which it's embedded in companies with strong business agility. Accelerates learning innovation and value creation in those without it. A .I. exposes structural friction leadership gaps and bridled decision systems at speed this is this this report is a goldmine[UH] by the way. And like we can probably stay on this for quite a while. We're not going to because again I'm trying to keep this podcast under an hour. Sure. We'll see how I do with that But this visibility is to 2025 report. I can only imagine what it's going to say for 2026. But If I'm going to argue against it, the arguing points will be, hey, I replaces the need for quote agile or any agile positions or whatever you call them Playing the role like I could play the role. I can have a I can have a scrum master chat bot. Right And also[UH] hey we just need to buy copilot for everyone and we'll be 40 percent faster. And being faster because we're supplemented with AI tools means we don't need to worry about this business agility stuff, right? Oh yeah, that's it. Sign me up. I mean, this is exactly what we heard some time ago when people discovered agile was the right way to do things like, well, we don't need agile. We've been doing things this way you know, so now we're saying, well, yeah, I replace his agile, right? Jilly's dead. And we need to buy tools for people to get there faster. Get where where are we going? Are we going [UH] are we going there because we mean to go there? Is that the right place to go? No, it doesn't matter about all that. Just get there quick. Yeah, but listen, Sam Altman is not going to get money if we don't give him all of our token money This is true. And fast and fast. That's what I'm saying. He's looking for a man to finance. That's what I'm saying. I'm just saying oh man, what are we talking about? now we're in the force. Now we're in the force. So if you're looking at this section that we're talking about critically and you're saying, oh our decision velocity, it's really slow. OK, I can help us accelerate that. It can read a 40 page document in the snap of a finger. Yeah, it can help you generate a 40 page document in the snap of a finger as well. I can read it too. And you can read it and you can summarize it for you. Right. But what's in it? Like where did that come from? Did it just dream up that stuff? I mean, some of it. Maybe. Yeah. Yeah. Did it? Did it get the right takeaways? I don't know. Maybe these are the things that you have to trade off with regard to speed. So I mean, I guess if that's your, you know, speed is the number one concern. I guess if that's what you're saying, As a product manager, I'll go with you on that. You know, I've gone with executives on a lot less than the technology is really fast. Yeah, I mean sure. Right. I agree. I think this is a weak point though still. Yeah, well you're probably saying it's a weak point because my next question is going to be, is it correct? And you're going to say, what do you worry about that for Yeah, let's just move. Why are you hassling me? You slow me down. It's quick. Yeah, yeah, yeah. You're slowing me down by raising all these questions. Right? Yeah, So another for AI without structural flexibility, get stuck in legal and compliance pilots forever. Well, you don't need that when you have a army of lawyers on your side that you pay, you know, that you pay basically the salary of an entire army to do that. You do have to lay off most of your staff. Right? Yeah, yeah, yeah. at that point you have to ask yourself what business you're in. If you're in the business of making what you're doing legal, you know, ex post facto. Yeah, making basically downloading a torrent of all the books and feeding them to your eye. So your eye is now trained on all of the books ever written. And you have to have your lawyers back up. Is that legal? Yeah, I guess you need to pay for a I guess you need to pay a lot of money to a lot of lawyers if you're doing things like that that are what what most folks would say is sketchy. Stay above water. That's what you got to do. yes, sketchy download all music ever released on an album. Feed it to my music making eyes training data. And now I can produce any music I ever I'm going to want. That's not illegal I guess. listen [UH] I A .I artists are going to be winning some of these music awards real soon. There's an article on TV I just watched a couple of days ago where they're saying how the next Grammy would be won by an actress. I hope so. Listen, it's about time [UH] actresses. I wonder if the actress is going to be humble accepting their award. I hope so. I hope so. I'd like to thank the academy and all my tokens. an here because Brian got too sassy for the free version of the podcast. Just there may have been want to see that. You don't want to see that ground right now the takeaway here treat A .I. as a mirror for your C suite. Do you know why I'm saying that [UM] because in the future is going to be your C suite because like the people that take all the evidence that you've brought them in the context that you brought them and make a decision based on that wish is my dying wish. That's what I'm saying right now is that we finally as a society realize what is really really good at. So we're about to trade places with it. Really? It's really good at all. You do the research and you give me all the context and I will help you make the best decision that you could have done. You know like like a really good C -Suite person would do. Who's going to ask you questions and say, oh [UM] You're bringing me this question. You want me to make a decision. I'm going to help you make the decision by asking you a bunch of questions, examining your evidence, really holding your feet to the fire, and then asking you what you really recommend. Right? Yeah. Why you recommend it and then helping you come to the right decision. And boy, if there is, if there is a single[UH] use case that I have heard all year that is like top tier. Yeah, I see speed. Do you know who this is going to help the most? No, who? in the non AIC suite Those people who are are unable to make decisions no matter how much evidence you give them. There are some those, some of those people. They're ego led. Whatever you tell them, that ain't right because you told them that was the right thing to do. So they're going to tell you something else. And when it fails, not if it's your fault. Well like I hate to tell you, but if your A .I. adoption is stuck, if your business agility is stuck, if your ability to evolve the business beyond certain people because of their personal failings is stuck, you don't have a business agility problem. You have a personnel problem. And again, we're back to the heart of business agility. You've got problems. The business agility will. Make those problems transparent and then it's your choice to deal with them or not deal with them. And to live with the consequences and sometimes living with the consequences means like blaming people and like doing some bad behaviors to try to mask what we know. The real problem is. Yeah, but but again, like after 20 years of doing this It just keeps coming up. It's like once you don't deal with the problem, it it bubbles over and it becomes a problem all itself. If you skip the thing that you should have dealt with enough times. Eventually like it'll be so. It'll be so undeniable that you need to deal with it. They have to start what you're doing and deal with it. Yeah yeah. He's got better off anymore. It's a big problem. Yeah, it's a big problem So it's not a business agility problem. it's a people problem. And the people in your organization that deal with those problems should be the people at the top. Should be absolutely. And when he runs your business, it's going to be[UH] yes, thank you very much because when I run your business, it will not dilly dally around. You know, it'll attack the problem straight off. Sure. Because it does it and very quick. And that's how you get Terminator one that I believe the the first Terminator movie. I'm just saying. Oh boy. On that somber note, what's our call to action action here? AI acting like a superpower at your company or a mirror showing your bureaucracy? Tell us in the comments below. Finally, how do we av avoid turning this into another consulting scam? Glad you asked. I got more unlike other podcasts, I got more excited the longer we went on this bucket. we're ending this episode on the biggest lie in the enterprise world today. So I'm glad you could be here because it's the biggest lie, the biggest, the idea that you need to scale agility by buying a massive complex framework. But you and I both know the agility doesn't scale. The bureaucracy is what scales. If you want to move faster, you don't add more process. You just relentlessly de-scale the organization. You look for opportunities to break silos across into smaller units cross -functional teams that knock out work. And oh boy, if there's a concept that a lot of people don't want to hear, it's this one. It is this one. Yeah, I've not heard any consulting [UH] organization coming coming in to help a business say this. Not one. if you want to hear people pedantically push back against this one, the against points here say hey, what you're pointing out. It's just another framework. You know, the scaling framework is a framework home. It's another framework that you're going to charge us six hundred twenty five dollars for a certification for. And oh oh and also good leaders. They already do this without your five pillars and your agile certifications and your scrummy scrums and your Jira and all that. If they're doing it, why is it that you are up at night every day, Mr. Executive? Right? Things will be hunky dory for you. Clearly, there's a problem. Yeah, maybe. I mean[UH] like there's other against points here that I held back in reserve because they're so good. They're soso good, I mean terrible and useless and worthless. But oh, we're a massive enterprise. what you do at a startup has no bearing here. We're special [UM] we're special. Nobody's [UH] a hundred, two hundred, three hundred thousand employees like us. We're so special. So we need all these layer things. That's exactly right. To manage dependencies and you know, get decisions made and reviews and all this sort of stuff until we fire 30000 managers and then suddenly we don't. Yeah, right. Yeah, but but also we need standardization between our teams though. We have a PMO. We need oversight over our 500 development teams in the oversight. We need to know what they're working on Sorry, I got one more. And then and then need we need measurement across all of our quote agile teams because otherwise we wouldn't know who's performing, you know Someone someone could could be be taking taking advantage advantage of of us. us. You You know know what what I I also also hear in that argument though is we've invested in in agile and we want to justify our investment [UH] I thought you were going to say non non family friendly. Oh no no. yeah. Oh, okay. because we're at the end, let's race through this one. Like, complexity is the enemy of speed. So like Like, yeah. if you're managing dependencies like you've got the wrong architecture, you've got the wrong architecture, the wrong org chart, the wrong that you're starting all wrong. about that. I hear You need to break all that down. So you're starting with a big complex organization with a bunch of dependencies and red strings and all that. OK, cut through all that and scale and and decomplexify. Oh, that's a word. Decomplexify. I don't think that's a real word. Just avoid these dependencies in the first place. Let's deal with That's the first thing that people are going to throw out. we're a special because. And then they'll throw all this stuff out. That doesn't matter the other one that I want to stay on for a second is you don't scale agile. I actually do believe that you don't scale quote agile. But you spend your time figuring out how to de -scale your orgs and break them up and figure out what is the bare bones of communication that needs to happen between teams. And then you strip away all of the business layers, all these 30000 people that Amazon's laying off like you strip all that away to say, what really needs to happen for these teams to communicate with each other? Like how many people do we really need? Because if you're hiring someone whose job it is to like assist with communications and coordination between teams, you should make it explicit of like that, like on the cell in the spreadsheet where they live. That's their job is this person keep they grease the gears. They keep the machine working. That's their job. Once they stop applying grease. Yeah, sure. You stop. Stop the guy pulling the levers, moving the assembly line and just fire him and have nobody move in the assembly line. Things will probably be OK for a while. Sure. Tell them not set your stop watch 10, 15, 20 minutes, maybe an hour. Right. But like at some point, The assembly line will go out of control completely. And then you'll be sitting there going oh, why are the workers not running up to the assembly line and pulling the lever? I don't understand. Yeah. Yeah. And you're of course not there to even see or know. Yeah. You're just looking. You'reat the after on the spreadsheet and then six months later. Right. Yeah. Right. Right. Right. I don't understand. So the the only metrics that matter are time to market cost of delay customer adoption. Everything else becomes a vanity metric. I probably could be a little flexible on this viewpoint. But again, I'm coming at this business agility category from the product manager's viewpoint. And I should also point out there's a lot of product managers out there who say oh, the agility people, they've got nothing to help us with. that statement is The problem with it's really when they say the agility people because you're also part of the same population. going to say it's I thought you were ridiculous. It is ridiculous. Also, that would have been much quicker. Yeah. it's ridiculous. And say. I would say you're a terrible person. And go stand in the corner. Yeah, go stand over there. So the take away here number one fire your vanity metrics. Stop tracking them and all those that that support support them. them. Yeah, somehow is not replacing any of the people that maintain the financial accounting spreadsheet of who gets fired. That's so odd, isn't it? Yeah, so weird. So if your deck that you showed to the board is talking about velocity or predictability, instead talk about your market share and your customer outcomes. Talk about those two because if you're not talking about those two, you are losing in terms of being [UH] running a good business. You're losing. Yeah, I mean, look, there's nothing to argue there. I mean, assuming that when you talk about these things, market share, customer outcomes, et cetera, these words don't fall on deaf ears If people are so accustomed to hearing those vanity metrics, if they hear these other things, it would be you know, bitter medicine to them. oh, what's all this stuff now? Right The other one that I want to talk about is stop managing dependencies. you didn't know. I was starting fights in the podcast but I am. And everyone's catching strays today because stop managing dependencies. Just don't do it. Period. A lot of product managers just had a connection right now them. Right. Structural flexibility is one of our main now. Yeah. Eliminate categories. And if you're not progressing structural flexibility. Because I don't know, it's hard to do this and we got to re forge all of our communication lines and like teach people how to communicate better and listen, I know it's difficult. I understand. But also like what are we doing in our lives? Right? This is work. So, so yeah. Eliminate the ones you have now and then in the future avoid look at your approval processes tomorrow. If a decision requires more than two signatures, your business is bloated and it will not survive. Just want to throw that challenge out in case anyone sees it, hears it, feels it, and wants to argue about it on the Internet. So I'm here. You can feel free to write me in the comments and change my mind. All right. Cool. All right, CTA So are you actually speeing up or did you just add a new layer of quote agile management if anything in this episode made you uncomfortable, you're welcome. First of all But the second of all, like the point of this episode was to arm you with kind of the five categories that that I think of because again, they're more of the mean than they were home of like the specific way that we categorize business agility. I want to bring them here just to talk about the sensing and responding decision velocity, structural flexibility, distributed authority and learning orientation. If you're not building these, then boy, you're on a you're on a path to disruption and not the good kind. Not the good guy. Exactly. Like we're going to disrupt the market like that. I wanted to point it out because there's not a ton of clarity on the Internet about this kind of thing. or if you go searching on YouTube about what is business agility[UM] divided from like, oh, a bunch of Scrum stuff or people trying to sell you trainings or whatever. Yeah, I want to divide it from that. Talk about like, if you run the business, what does agility mean and why is it important? So I want to have adcast that stood alone and address those things. And I think we've [UH] you know, we've done a fair job what I would say give us a better grade than that. But you guys can decide. Please let us know down in the.