Impact Engineering, Finding Agile's Lost North Star |Tom Gilb and Simon Holzapfel

Summary

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Podcast Summary

Episode Overview

Title: Impact Engineering, Finding Agile's Lost North Star
Podcast: Scrum Master Toolbox Podcast: Agile storytelling from the trenches
Host: Vasco Duarte
Guests: Tom Gilb (EVO approach pioneer) & Simon Holzapfel (system thinker, educator)
Date: December 8, 2025

This episode launches a special five-part series on "engineering your organization for continuous learning." Vasco, Tom, and Simon dig into why the Agile community has lost its North Star—its central guiding purpose—and how a shift from process obsession to value-driven, impact-focused approaches can reignite innovation, effectiveness, and real progress in organizations. The discussion focuses on the concept of "impact engineering" via Tom Gilb's EVO approach, and how clarity, measurement, and adaptive leadership unlock new organizational possibilities.

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Key Discussion Points & Insights

1. Tom Gilb’s EVO Approach and the “North Star”

• Tom’s Consulting Trick: Tom explains his signature consultancy strategy: in the first hour with any client, he asks what their most critical problem—their “North Star”—is, then demonstrates they haven’t truly clarified it, and ultimately guides them toward a concrete evolutionary step towards that goal.
  • “Within the hour, I show them that there’s an evolutionary step they can make this week for actually making progress towards the clarified North Star. That blows the mind of CEOs and they’re hooked.” (03:15, Tom Gilb)
• What is Impact Engineering? For Tom, “engineering” means a systematic, logical, experimental, feedback-driven approach—always focused on stakeholder values.
  • “I mean very systematic, very logical, very experimental, with feedback and learning, and very clearly directed towards really important things, which we call our stakeholder values or stakeholder critical values.” (05:07, Tom Gilb)
• The Core: Clarity Over Process
  Tom underscores that everyone starts from “fuzzy, nice sounding words” (06:04), but what’s needed is clarity—not just discipline, not ritualistic processes.

2. Quantifying the “Unquantifiable”

• Tom challenges the notion that “soft values” can’t be measured—he gives the example of quantifying employee or human happiness, now easier thanks to AI.
  • “In other words, it’s really easy today to prove to people that they can clarify their bullshit North Star objectives. And that is the beginning of a whole new culture of management and engineering.” (08:10, Tom Gilb)

3. How Agile Lost its North Star: Simon Holzapfel’s Perspective

• Leadership Avoids the ‘Wet Work’: Simon uses a visual metaphor (a leader avoiding getting wet in stormy seas) to illustrate that many leaders want “flow” but not the discomfort of real participation and reflection.
  • “Leaders often want flow, but they want a wetsuit so they don’t have to touch the flow and truly be part of it.” (10:16, Simon Holzapfel)
• Mismatch with Modern Reality: Simon connects Agile’s origins—addressing the “voice of capital” and managing fixed costs—with the new reality: capital has become fluid, digital, and available as a service. Agile, he posits, hasn’t updated its North Star for this shift.
  • “Basically Agile lost its North Star because these economic problems it was trying to solve within the organization is now mismatched with the digital world ... The North Star is no longer in that ancient sort of fixed mindset. It’s in the forward-facing digital mindset, which is wet and sloppy and requires teams to be coordinated and collaborative, not waiting for someone to tell them what to do.” (12:20, Simon Holzapfel)

4. From Efficiency Obsession to Value Creation in Complexity

• Predictability vs. Innovation: Simon points out innovation is fundamentally unpredictable (“stochastic”), while organizations and leaders desire predictable results. This mismatch destabilizes the hierarchy.
  • “Capital wants predictive returns on a stochastic process, which is innovation. ... It destabilizes the current hierarchy. Who listens to who, right?” (13:33, Simon Holzapfel)
• Agile Tools: Are They Solving Yesterday’s Problem?
  Vasco observes that many Agile approaches are still focused on “flow of work,” not intentionally navigating the complexity of true value creation.
  • “...in the Agile community, we’re using tools for flow, when in fact the problem is no longer the flow of work, it is the creation of value, which is a stochastic process...” (14:01, Vasco Duarte)

5. Looking Ahead: Continuous Strategy and the EVO Approach

• The episode teases the next installment, where they’ll dive deeper into how continuous strategy engineering via EVO helps organizations systematically measure, deliver, and adapt for real stakeholder value.

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Notable Quotes & Memorable Moments

• “Everybody seems to start from a position of fuzzy, nice sounding words.” (05:59, Tom Gilb)
• “...it’s really easy today to prove to people that they can clarify their bullshit North Star objectives.” (08:10, Tom Gilb)
• “Leaders often want flow, but they want a wetsuit so they don’t have to touch the flow and truly be part of it.” (10:16, Simon Holzapfel)
• “Agile lost its North Star because these economic problems it was trying to solve ... is now mismatched with the digital world.” (12:47, Simon Holzapfel)
• “Capital wants predictive returns on a stochastic process, which is innovation.” (13:33, Simon Holzapfel)
• “...we’re using tools for flow, when in fact the problem is no longer the flow of work, it is the creation of value...” (14:01, Vasco Duarte)

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Timestamps for Key Segments

• 01:11 — Introduction of guests and the week’s theme: building organizations for continuous learning
• 02:41 — Tom Gilb’s consulting approach and definition of the North Star
• 05:02 — Defining “Impact Engineering” and the importance of disciplined, value-driven clarity
• 07:13 — Quantifying soft values (with examples, including happiness and AI’s role)
• 09:12 — Simon’s systems thinking perspective: leadership’s aversion to discomfort and the failure to update Agile’s economic lens
• 12:47 — The mismatch between Agile’s origins and today’s digital economy
• 13:33 — Innovation’s unpredictability and its disruption of traditional hierarchies
• 14:36 — Preview of the next episode: measuring and delivering value with EVO

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Tone & Style

• Direct, candid, sometimes irreverent (e.g., “bullshit North Star objectives”)
• Rich in metaphor and systems thinking
• Challenging orthodoxies, practical and visionary

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Conclusion

This episode lays the groundwork for a deep re-examination of what “Agile” truly aims for in today’s organizational realities. By highlighting the lost North Star—the clear, measurable stakeholder value that should guide all efforts—Tom Gilb and Simon Holzapfel, together with Vasco, challenge listeners to move beyond process for process’s sake and to rediscover clarity, measurement, and radical transparency as the engines of meaningful progress.

Listeners are encouraged to tune into the week’s subsequent episodes for actionable strategies and to revisit Simon and Tom’s previous podcast appearances for more foundational insights.

Transcript

[A]

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Hello everybody. Welcome to a very special week of episodes. This week we have a tag team of amazing guests to be part of a five part series on engineering, your organization for continuous learning. We are sitting down with Tom Gilpins, pioneer of the EVO approach and value based engineering, and Simon Holzapfel, who's been a previous guest system thinker and educator. And across these five specific conversations, every one of them will be about a topic. And it all comes together on Friday. So make sure you listen to all of them. We will talk about how to shift from motion to meaningful progress, from planning to adaptive strategy, from checkbox agile to continuous learning systems. This is about engineering organizations that evolve deliberately, measurably and of course, with a clear purpose. So let's get into it. Let me welcome to the show our amazing guests, Simon and Tom. Welcome to the show.

[B]

Thank you.

Great to be here.

[A]

So, Tom, let's start with you. Give us a very short intro to, well, your very long history in this industry, but just something that people can grab onto and understand why you are sharing some of these ideas with us this week.

[B]

Okay. I've always made it my business with my clients to.

Book them in the first meeting in the first hour. And I universally had two tricks related to our conversation. One, I asked them what their most critical problem is and that's what we're calling the North Star for the moment. Okay. Then I show them that they never had a clear idea what their North Star was. They had management.

Then within the hour, I show them that there's an evolutionary step they can make this week for actually Making progress towards the clarified North Star. That blows the mind of CEOs and they're hooked. And I've got my consultancy gig.

[A]

Absolutely. And that's a big part of the EVO approach that we're going to explore this week. How about you, Simon? What's the 32nd intro to Simon Holzapfel's story?

Oh, you're on mute.

[C]

That's like most of my life, Oscar.

By which I mean I was born a kid who spoke too much and listened too little. My life journey is getting the balance more right depending upon who's around me and where we're trying to go.

[B]

Very good.

[A]

And both Tom and Simon have been guests on the podcast before, so check out their episodes on the podcast to know more about their ideas and the, let's say, the problems they especially care about. So, Tom, let's get back to you now. Many organizations, and even many among our agile community as well, focus a lot on process performance. Now let's first acknowledge there's nothing wrong with that in theory. However, in practice, it may miss some critical things that you talk about in your EVO approach. You call it value driven engineering, impact engineering. So let's start there. What is impact engineering in the context of your EVO approach?

[B]

Okay, so by the term engineering.

I mean very systematic, very logical, very experimental, with feedback and learning, and very clearly directed towards really important things, which we call our stakeholder values or stakeholder critical values.

[A]

And that's actually a very important point, like the values. And we will come back to that in this week's series. But you said very disciplined. But there's more than that, right? Because, I mean, some might say waterfall planning is very disciplined, but that's not the kind of discipline you are talking about, right?

[B]

No, the key word is really simple. It's clarity. And everybody seems to start from a position of fuzzy, nice sounding words.

[A]

I, I really like that phrase, by the way. I might copy it.

[B]

So I mean, this is, this is management. Does it, Professors, does it do it, Politicians we know do it. And they, they don't even feel very guilty about it. They feel like this is their culture, this is the way things are done. If you push them, you know, what do you mean by extremely high security?

They say, well, extremely high security.

[A]

Isn't that obvious, Tom?

[B]

Yeah.

But when you push me and say, but Tom, these are soft values, you cannot clarify them. You cannot quantify. You quantify money, quantify time, you cannot quantify all the ilities, all the qualities, all the soft values, and I say you want to bet? Now, in the old days I had my manual methods for doing that, but today it's real simple. I said, let's ask your favorite AI to quantify, for example, employee happiness.

A hundred different ways.

I did that once with human happiness. And we got a hundred different ways of quantifying different defined scales of measure to a, a man who, with a good mind, good education, but he was in denial. You cannot quantify human happiness. Show me, Tom. I said, well, here's a hundred. Now, how many do you think there are in total? I'll make a long story short there. I asked the AI system, could you give me a million different scales of measure if I asked you? And it said no. And I was a bit disappointed because I was sure there were a million out there. It said. I said, how many could you give me? It said, I could give you 1,450 different measures of human happiness.

Why 1450? I said, because that's all I've been trained on up to now.

That's so good. Yeah. So in other words, it's really easy today to prove to people that they can clarify their bullshit North Star objectives. And that is the beginning of a whole new culture of management and engineering.

[A]

Clarity and talking about culture. One can be very disciplined about defining how to measure something, but one also needs to create the approaches, the culture, and the processes that lead to actually delivering on that and measuring that. And one of the topics we discussed today is how the Agile movement has lost its North Star. And I guess we already have a little bit of an insight as to why Tom thinks that is the case. But how about Simon? Simon, give us your perspective, your systems thinking perspective of why do you think we have lost this North Star in the Agile community and movement?

[C]

Sure, I regret that we're not on video, Laska, but I think we can make this available to your listeners who can then go back, grab this PDF and have a much more visual answer.

[A]

Yeah, we'll definitely make that available.

[C]

Okay, so to answer your question, how many leaders want to get wet like this?

[A]

So we have an image of a.

Stormy sea with some sharks and there's some superficial process thinking on the left, and there's some very high waves and personal awareness and reflection on the right with the phrase maybe it's me. So I guess, Simon, by getting wet like this, you mean leaders who want to get to the point where they may be forced to realize that the challenge to deliver value is not the process, the technology, or even the other people, but maybe themselves is that what you mean?

[C]

What I mean is leaders often want flow, but they want a wetsuit so they don't have to touch the flow and truly be part of it.

[A]

So, and how do you link that to the lost North Star of the Agile movement, Simon?

[C]

So Tom will tell you that he and I are like deep structuralists. And so I'm going to give you first the Marxist presumption about that, which was the impossibility of capital ever changing to the current reality that John Kay describes, which is capital as a service like SaaS or Cloud or whatever.

If you're trying to be a leader of an organization and those two facts are not well onboarded by you and your team, you're approaching the edge of standard, of sort of fiduciary care for whatever organization you're looking at. Right. What CEO now doesn't know about cloud infrastructure? It would be a clown. It's really inconvenient for leaders to be really with their team because what teams do is they go through these waves all the time trying to solve business problems for someone above them.

[A]

So what I hear you say is that we lost the North Star in the Agile movement because we have not understood how that translates into concrete decisions and concrete approaches to delivering value within our organizations. We are linking to it as kind of a generic term, maybe even a fuzzy, fuzzy bullshit like Tom described a moment ago.

[C]

Yes. So in other words, so let me just use my hands and again, I apologize to your listeners. So it used to be the case that the bottleneck was capital to almost anything getting developed, Agile developed, and especially incremental agile developed primarily to allay the concerns of the voice of capital in the room. This is a pre digital voice of capital as opposed to the current voice of capital, which moves digitally in the direction of capital as SaaS, capital as a service. So basically Agile lost its North Star because these economic problems socially was trying to solve within the organization is now mismatched with the digital world. And the North Star is no longer in that ancient sort of fixed mindset. It's in the forward facing digital mindset, which is wet and sloppy and requires teams to be coordinated and collaborative, not waiting for someone to tell them what to do.

[A]

So one of the things that this suggests in me is this contrast between trying to be more efficient and actually navigating complex feedback loops and social structures to try to be more impactful.

[C]

Because innovation is a fundamentally stochastic process. And so this is why when I met Tom, it was kind of like meeting Jesus, Buddha and Gandalf. At the same time, because I had been in this pit of despair of we just can't measure some things, we just can't bring value and clarity. And I met Tom, I was like, ta da. Not only does this exist for any Scrum master with AI access, the whole Gilbert is right there. You can then use that as a Scrum master, not to just protect your team. The anxiety is outside the team. Capital wants predictive returns on a stochastic process, which is innovation. Obviously you just cash buffer the innovation thing, just like throughput accounting tells us to do, like Danielle Dwaron tells us to do. Obvious documented things. But again, it destabilizes the current hierarchy. Who listens to who, right? It's just when it's like trying to.

[A]

Grow, in other words, it actually destabilizes us because in the Agile community, we're using tools for flow, when in fact the problem is no longer the flow of work, it is the creation of value, which is a stochastic process, as you said. So something that can't be predictable, it will happen in big lumps at some point, but you can't predict when it.

[C]

Happens early in the process. But then you use Gilbein methods, you use the Leaf methods to again agile lean refine with Tom's sort of operating system then you mean the EVO approach.

[A]

Yeah, and we'll talk more, we'll talk more about that tomorrow. So we talked about the need to focus on delivering value through innovation, but then the question is, okay, but how do we make sure we are delivering that value? And that's actually something we're going to talk about tomorrow when we explore continuous strategy engineering with the EVO approach by Tom Gilb. So, Tom and Simon, thank you for being here. It was a wonderful set of introduction ideas. Looking forward to our conversation tomorrow.

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