Is the Economy derailing your Agile Transformations?
Economic uncertainty hits. Layoffs are all over the news and productivity suffers.
Every time, I see people wanting to blame the loss or productivity on budget cuts and layoffs. That is the short term impact, but I see longer term harm playing out.
Teams that were thriving on collaborative decision-making suddenly go quiet. The same people who were debating sprint priorities and pushing back on requirements start waiting for marching orders from above.
The real culprit? Psychological safety had left the building.
Here’s what I’ve noticed happens:
Teams that thrived on uncertainty suddenly crave certainty. The same people who embraced “fail fast” are now thinking “don’t fail at all.” Collaborative decision-making feels risky when your mortgage payment feels uncertain.
It’s not weakness—it’s human nature.
Research backs this up: nearly 40% of Americans naturally prefer strong, authoritarian leadership. But here’s what I’ve observed about the other 60%—they’re split between two camps: The change embracers who double down on agile thinking during uncertainty, and the wait-and-see crowd who go wherever feels safest in the moment.
That middle group? They’re the swing vote.
When they feel secure, they lean toward collaboration and experimentation. When they feel threatened, they flock to whoever promises the most certainty—even if it means abandoning practices that were working. But here’s the sad reality: instead of working together to navigate the storm, people start optimizing for individual survival. They’d rather be the highest-ranking person left on a sinking ship than risk being a crew member who helps everyone reach a tropical vacation.
I’ve seen it play out like this:
- First, the rumors start
- Then psychological safety evaporates
- The “wait and see” people stop taking risks and disengage
- Individual positioning trumps team outcomes
- People hoard information instead of sharing it
- Team Innovation stalls as everyone focuses on looking individually indispensable
- Soon even your change champions feel isolated
- The agile innovators and experts quit, lowering the outcomes
- Worse Outcomes lead to more layoffs and the cycle gains velocity
Your team hasn’t forgotten their Agile training. They’re just operating in survival mode, and survival mode is inherently selfish.
The question isn’t how to force them back to Agile practices.
It’s how to rebuild safety when everything feels unsafe—and how to remind people that the best way to survive is often to help the whole ship sail to calmer waters.
The tactic that has worked for me at the team level was to take a bit away from the ‘self-organizing’ nature of Agile and enforce a stronger process layer that has ‘gates’ on Agile ceremonies. I try to appeal to the folks who want to follow the rules in front of them while supporting the Agile tenants that have proven to have better outcomes.
I’ve been in orgs that focused so hard on survival that when the economy opened up, they were unable to keep up with competitors who didn’t lose their long term focus. I’ve also been or orgs that balanced this well. Proactive communication, usually with a calm CFO at the helm can replace the fear of failures with slides showing our relality in revenue numbers and EBITA. Step 1 of the cycle can be blunted with leadership handing down facts and clarity.
I remember at one company during a recession, we looked at the sales pipline and indentifed the ‘must win’ opportunities necessary in order to make payroll. We knew we had to work together to survive. At larger companies, it is sadly normal to have a justifiable failure and blame another team when we don’t achieve our goal. Fortune 500 companies will be fine and if you can prove you did as you were told, then you can guide the ax elsewhere.
Do you have similar experiences in the workplace?
Let me know if this resonates with you. For some reason I’ve been reading a lot about why people embrace Authoritarianism lately.
#Leadership #Agile #WorkplaceCulture #PsychologicalSafety
Header photo by Memento Media on Unsplash