For a few years already, Herman Gref, CEO of the Savings Bank of Russia, has been Russia’s innovations trend-setter and gospeller of the IT and related transformations. His forecast at 2016 Gaidar Forum that those who do not employ Agile will soon be losers, was sufficient to shape a new market. Askhat Urazbayev is founder of ScrumTrek which has accomplished Russia’s first Agile research. He described to Invest Foresight the new management technology taking root on the Russian ground.
– Mr Urazbayev, what is so good about Agile?
– The concept of Agile springs from the English word meaning ‘able to move quickly and easily’. Its fundamental idea is the intent to as quickly as possible satisfy all the needs of a customer and supply what is required. The method is based on a team decision-making and a team consensus. Employees do not wait for explicit orders from their superiors, since they themselves are capable to comprehend what is to be done at this particular moment. The business drivers are quite evident: staff involvement is high, same as the speed of decision-making, as there is no need for approvals, whereas approval process is the most expensive element of any business. But everyone will only work well if everyone has trust in that. That is the main challenge, because if someone has been an executive for two decades, then all one has been doing was pressing the staff. And the mechanism was working perfectly well. Then some young guys with no experience of managing large companies come and start teaching an executive to manage the business differently. That is hard to accept.
– Have you seen top management’s active counteraction?
– I see it all the time. Some mid-tier executives feel they are becoming outsiders since the company is becoming more horizontally structured. Executives of that sort have two options, to either change or argue the new methods aren’t operational. Far from everyone is ready to fit into a new mechanism, so some employees are evidently doomed to leave, in excessively bureaucratized entities in the first instance.
– What happens when Agile technology is introduced?
– Decision-making speed accelerates. The first thing company executives realize, they loose executive control. They used to be aware of and supervise every tiny matter within their company. Now, all decisions are made by company employees themselves. Also, corporate teams need few months before they learn to make decisions and accept responsibilities. It takes time for mechanisms like that to take shape.
I can cite an example of Mindbox, a company we have been working with since 2008. Alexander Gornik, its CEO, is an authoritarian manager, and it took ten years before he agreed to introduce self-administration in his company. Currently, there are 70 employees who decide on remunerations, hiring and firing, etc. But that is a result of a decade-long advancement and a hard self-improvement work. No doubt, if I come up with the Agile-transformation idea to a company such as Gazprom and say, ‘Well, let’s make all incomes within your company public’, that will be too much. I will end up being killed on my doorsteps some night. That would not be the worst option, though. The really bad one is, they OK my ideas implementation.
– How much is Agile spread among Russian companies?
– We have polled nearly 800 small, medium and big business representatives in over 50 cities. The results of our research demonstrated that Agile methods are only gaining popularity among Russian businesses. Exactly 50% of the respondents work in companies where Agile has been introduced a year or less ago. But the new approaches to management are gradually expanding beyond IT sector. A year ago, some financial and telecommunication companies started going Agile. So it was kind of a surprise to learn that 13% of Agile companies work in light and heavy industries which are fairly new sectors for Agile technologies implementation. Nevertheless, applying Agile approaches in these sectors is gradually expanding.
– What else is surprising about that research?
– A great number of people who do not rely on generally accepted practices but invent their own approaches. There are 27% of people like that, which is three times higher than in Western countries where Agile has come from.
– Can you explain that?
– I have a feeling, that is sort of a convert’s zeal. Russia is a hype country, after all. As soon as Herman Gref mentioned Agile prospects at Gaidar Forum, I got three phone calls from three Deputy Chairmen of three banks. They had been much hesitant about our proposals before that, but all of a sudden decided to launch pilot projects. Thanks to the speech made by Gref, we shortly doubled out sales, and then doubled them again. Interest towards Agile instantaneously spread all over the country and shaped a new market. Demand for a new type of people emerged, but such people can not be easily hired, even if a strong desire is present. Our national Agile market is underdeveloped, especially as there is a generally cautious perception of all sorts of consultants. I think the market can grow at least three-fold, to the present-day levels in Europe and US. We are now two or three year behind them.
– Are there any companies where Agile is not recommended?
– I can not say, there are businesses which Agile methods do not fit at all, since some elements of Agile can always be introduced. There is a notion of a sweet spot, where this management practice is most efficient. These are highly dynamic markets where competition is also high. True, there are industries where innovations efficiency is hard to measure. If one owns a pipeline which pumps money, one can apply Agile or any other method, the money will still be there. It is different with banks. About a third of all companies which have implemented or are implementing Agile in Russia, are financial sector institutions. Bankers are not the kind of people who would slavishly follow a fashionable trend. They analyzed their margins and realized they can no longer compete by means of interest rates only. They realized they have to change their business model and go digital. To belong to digital community, one has to advance fast, following the consumers’ demands. Now banks need high quality mobile applications. But their time-to-market, i.e. the time required to put together a technical assignment, to have it studied and effected by developers, then tested, accepted and introduced by banks, is about a year and a half. The market will advance a great deal further by then. To resolve problems like that, one needs most dynamic teams.
– Is introduction of this new management technology time- and money-consuming?
– That depends very much on a company caliber and its readiness to change. For some, it is enough to send one employee to attend a training course at ScrumTrek. For others, a full scale support is required for a lengthy time. It takes three to five month to launch a pilot project. The first results will be visible in some further three months.
– Would you agree that to some extent Agile is a sort of a quasi religion? The stronger is one’s belief in people with money, whether an investor, or a sponsor, or whoever, the better are the chances for the project to succeed.
– That’s exactly so. It should be noted, that is not about Agile only. Whatever one does, one will erect some kind of a fence, a religion. In every sector, there are its own terms, notions, rules, proponents, etc. If one wants to get good results, one must invest one’s faith. True, the faithful ones have somewhat a sectarian look and fiery eyes. In some while, they get accustomed to acting in a new manger and can no longer work otherwise, can not imagine it used to be different.
By Anna Oreshkina