An executive recently posed a thought-provoking question:
“We’ve been practicing Agile for seven years. It’s supposed to bring improvements, right? But we keep adding people. Where are the freed-up resources?”
This question captures a common challenge in organizations scaling Agile. It highlights a key tension: if Agile is supposed to improve efficiency and effectiveness, why doesn’t that translate into fewer people or reduced resource needs? Instead, many organizations find themselves continuing to grow in size.
Let’s explore this further.
What Does “Efficiency” Really Mean in Agile?
Agile doesn’t promise to reduce headcount—it promises to improve value delivery. This is a crucial distinction. In Agile, “efficiency” is less about doing more with fewer resources and more about enhancing adaptability and flow.
I like to think of efficiency in Agile as the ability to:
- Adapt effectively in response to changing needs.
- Create flow by removing waste and streamlining processes.
- Build cross-functional teams capable of solving broadly scoped challenges.
- Iteratively delivering what customers truly value.
This perspective on efficiency shifts the focus from cost-cutting to enabling organizations to deliver value more effectively.
But here’s where things get tricky: if the organization interprets efficiency as “doing more with fewer people,” there’s a potential disconnect. In practice, leaders often redirect freed-up capacity toward new opportunities:
- Tackling innovation projects
- Improving product quality
- Enhancing customer experience
- Just doing more work (aka the waste of Overproduction )
And herein lies that problem! Without clear alignment to organization goals, the benefits of Agile can be misinterpreted. Unless these priorities are explicitly aligned with the organization’s goals, it might look like Agile isn’t delivering the expected benefits.
Misalignment of Desired Capabilities
A deeper issue may lie in how Agile’s outcomes are defined and measured. The executive’s question reveals a potential expectation mismatch:
- For the executive, “efficiency” might mean lower costs or fewer people needed.
- For Agile practitioners, efficiency often means faster delivery and greater adaptability.
If these desired capabilities aren’t aligned, Agile transformations can feel disconnected from business priorities. Efficiency gains might exist, but they’re used to scale efforts—not reduce resource needs
The Cost of Agile at Scale
In many organizations, Agile organization design is intended to reduce complexity—fewer roles and meetings, with explicit coordination mechanisms replacing many informal ones. However, if the former meetings and processes aren’t replaced, the result can feel like an increase in overhead, creating a perception of bloat, especially when teams aren’t delivering significantly more value.
Next to that, scaling frameworks also introduce potential risks. Instead of focusing on simplifying workflows or resolving systemic bottlenecks, efforts may shift toward ceremonies, tools, or rigid following of the framework rules.
The outcome? Process bloat: more meetings, more unnecessary complexity, but not necessarily more value.
Agile Without Organizational Change
Sometimes, the issue lies in the implementation itself. Agile thrives in organizations that embrace structural, cultural, and operational change. But many organizations adopt Agile in pockets—leaving legacy systems, hierarchical structures, and conflicting incentives intact.
Without addressing systemic issues, teams may become more efficient within their silos, but the broader organization doesn’t benefit. The result? Lower system performance and growing resource demands to maintain a fragmented system.
What Can Leaders Do?
If you’re an executive facing these types of questions, here’s a roadmap to explore:
1. Clarify Your Expectations
Are freed-up resources contributing to strategic capabilities, or just increasing activity? One potential goal is to reallocate freed-up resources. But this only works if it’s done intentionally and tied to clear organizational goals. Without that alignment, the benefits of Agile risk being lost in translation.
The question is: What does efficiency mean for your organization? Is it for example about reducing costs, speeding up delivery, or scaling innovation? Derive your desired organizational capabilities from your strategic focus and align with the Agile practices are being applied.
2. Measure Capability Development, Not Activity
Shift the conversation from “number of people” to “closing desired capabilities”. Are the Agile practices closing desired strategic capabilities enabling better outcomes, or are they simply managing coordination overhead?
3. Address Systemic Bottlenecks
Look beyond teams and silos. Are organizational structures, processes, or incentive systems creating inefficiencies in the overall system? Addressing these areas give organizational efficiency gains.
Final Thought
Agile was not intended for cutting costs or headcount. Its true promise lies in creating organizations that deliver more value, faster, and with greater adaptability.
If your Agile transformation has led to more people but no visible efficiency gains, it’s worth asking: Are you aligning Strategy with organisation design, or are we scaling waste?
Explore more about the Creating Agile Organizations approach here.