Is 2019 the Year Agile Transformation Will Finally Work?

For many people working within large companies it seems that every 2 years there is a transformation program. A program that will fundamentally change the company to make it cheaper, faster and more innovative. Those programs have had names such as Lean Six Sigma or Customer Centricity and are either cross organizational or just focused on one group. For the last 10 or so years agile has been part of this transformation merry go round. First agile started with development teams, then across IT and now is part of an organizational wide change often connected with Design Thinking and Lean Startup. The fundamental question is do these programs actually work? Will agile in 2019 be like so many ideas before it, just a set of leftovers from the organizational transformation party? 

2019 will be different

The economic and social landscape that greets us in 2019 is different. There is high likelihood that we are entering an economic slowdown with the chance of a global recession in 2020. If there is a hint of a slowdown, many organizational leaders will reduce spending and take fewer risks. Normally this would doom any change initiative, but agile is different. Doing more with less and making the right decisions are fundamental to agility. In fact, large scale can be the anti-pattern to agile success with smaller teams being more focused and having less dependencies. The other emerging trend for agile teams is a focus on real customer or user information. It is, after all, hard to be empirical if you do not review your results after execution. With reduced budgets, the one area that tends to continue to receive funding is the one that is connected to customers. As my grandmother use to say, “When times are hard, get close to the money.” Agility thrives when it has a clear customer and the ability to deliver ‘stuff’ to them. This will result in not just product delivery becoming agile, but the complete value stream inclusive of the operations, marketing and business functions such as sales and marketing. Perhaps, because of the potential economic down turn, even procurement will get into the act with a greater focus on outcome-based contracts and work orders that do not describe the how, but instead the value desired and how to measure it. But procurement might be a step too far for agility because of the competing pressures of process compliance, governance and value. If agility does continue to thrive, watch for the following indicators:

Agile Teams Aligned to Customer Centric Value Streams 

The best agile teams know and understand their customer. They strive to deliver value to them and are empowered to make the right decisions to deliver value. Traditional organization structures have made the connection between work and outcomes complex with layers of ‘management’ deciding what is best for the customer. Subsequently, convoluted communication chains make feedback hard to find. If agile continues to thrive within your organization, look to how those agile teams are aligned. Are they aligned to clear customer value streams? Or are they part of some super complex system where it is hard to define what value each team is providing to the customer. For example, does a team or team of teams have a clear line of sight to the customer? 

Value Streams Inclusive of all Elements to Deliver Value

The traditional analogy of mass production encourages specialist teams focused on delivering the most efficient process for their activity. This works well when the problems are not that complex, the process can be defined, and problem well understood. Delivering value to customers is MUCH more complex than in the past where many projects were automating existing manual processes, with customers now requiring faster delivery cycles, with unknown requirements and potential technology solutions changing every few months. To be effective in this new world, it requires the formation of new, dynamic teams. Not just for the building elements but also marketing, operations and even finance. Specialists will still be required to do the work, but they will work in very different team models with different specialists. Management will change from coordinating the different teams to providing direction and helping the teams self-organize as necessary. 

Frequent Delivery of Learning 

Everyone quotes the Amazon statistic of releasing code every 11.7 seconds, but frequently releasing software is only part of the story. A key indicator for agile success is gathering learning from each release and then acting on it. Being able to release is crucial but being able to gather information and then act on it is where the value of frequent releases really makes a difference. To do that requires a major change to many of the processes, organizational structures and funding models that traditional organizations employ.  Imagine if you will a new feature being released which captures usage data, and the data indicates that users are not using the feature that information needs to be acted on. If the teams are busy with the next features, and the management have committed to that plan then nothing is done with that information. This ‘learning debt’ ultimately has a negative impact on team, the product and the customer. 

Motion Measures are Replaced with Value Measures

Agility is all about empiricism. The idea that complex problems require an empirical process. But most organizations measure the product delivery organization on motion-oriented metrics of on time, on budget, deliver what you said you would. Of course, it is important to know how efficient teams are, but ultimately the important metrics are really about value. In fact, organizations should follow the mantra of doing the least possible to deliver the most value. Value is what organizations should strive for and therefore measure. Motion is just a measure that should be used by the team to help them work better. Interesting value measures should include the current value of the product with metrics such as customer satisfaction, net promoter score, revenue, or page views, the amount of new ‘stuff’ being delivered compared to defect fixes and infrastructure changes and delivery frequency. Whatever your value metrics are, it is important to measure something and see how it changes over time. 

People Centric Organizations 

Of course, every organization says that its most important asset are its people, but the reality is that most organizations treat people like interchangeable resources. A key indicator for building a strong agile enterprise is how organizations support, develop and hire people. The famous Spotify model highlights the importance of building an organizational environment where people belong. Where people worked in teams or squads and are supported by talent-oriented communities.  Organizations that replace traditional HR practices with community-based talent structures that creates a safe workplace are more likely to succeed. In 2019, the talent shortage will continue with many organizations fighting for the same people. In response organizations need to put in place a community that not only builds talent but encourages new people to join it. 

Will Agile Transformations Thrive in 2019?

The indicators I highlighted describe a fundamental shift from an organizational model that is based on a mass production analogy to one that is based on a creative one. Moving the idea of management from one of control to one of enablement. A focus on empowered teams and an organizational structure that supports talent through community. The reality is that for most organizations this leap is too far. Changing the fundamentals of the organization will only happen if there is a dire threat and 2019 for the majority of organizations will not present that level of threat. Agile change will still continue with transformations being somewhat successful with either parts of the organization changing, or new products being delivered in new more agile ways. In fact, agile transformations will be measured to be successful with the very tools that are a product of the old age. They will be ‘on time and on budget,’ which as we know is ultimately not the value they strive to deliver on J.

About the Author

Dave West is the Product Owner and CEO at scrum.org. He is a frequent keynote speaker and is a widely published author of articles. He also is the co-author of two books, The Nexus Framework For Scaling Scrum and Head First Object-Oriented Analysis and Design. He led the development of the Rational Unified Process (RUP) and then worked with Ivar Jacobson running the North American business for IJI. Then managed the software delivery practice at Forrester research where he was VP and research director. Prior to joining Scrum.org, he was Chief Product Officer at Tasktop where he was responsible for product management, engineering, and architecture.