Managing to the Next Century - The Five Big Things for Agile Transitions

Moving to Agile is hard, but necessary

As we move into the digital age, organizations increasingly want to be more agile. Maybe it is motivated by loss; loss of customers, employees, market share or brand value. It also could be driven by a need to “keep up with the Joneses” and the desire to be as cool as Amazon or Netflix. Motivation not withstanding agile transitions are common place with many organizations looking to become “more agile”.

However, for many organizations, the journey to becoming “more agile” is littered with false starts, unhappy stakeholders and annoyed and confused leaders. Becoming agile is difficult, not just because of agility, but actually because any change is hard for organizations to embark upon. To quote Niccolo Machiavelli:

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There is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its success, than to take the lead in the introduction of a new order of things. - The Prince (1532)

And the move to agile is a new order of things, a much more fundamental change than the adoption of a new methodology or process framework. Carlota Perez world famous economist describes the change as common-sense response to the digital age.

No one today would propose a centralized, rigid, top-down organizational structure, where you cannot communicate across functions except through your bosses. However, that was precisely what Alfred Sloan set up at General Motors, to a great advantage at his time. With today’s communications and flexible technologies, agile creative networks make more sense and lead to much more productivity.

Perez goes on to argue that the previous age focused on mass production. Which by its very nature is different from digital production. Mass product focuses on reducing the unit cost, and increasing quality by process optimization, conformity and standardization. Digital on the other hand, focuses on the unit size of one, where everything is unique in terms of the problem, solution and ultimate value stream. But how many organizations still manage their digital products with the same mass production paradigm with resource optimizations, standardized process and specialism of labor? The agile age requires a different approach to outcomes, work, teams and management.

A focus on outcomes – taking ownership of the business value

Instead of a focus on getting work done in the most cost-efficient, consistent, risk adverse manner, agile teams concentrate on delivering value in the most effective way. They focus not on the work, but instead the outcomes they are trying to deliver. Scrum, the world’s most popular agile framework, is empirical in approach. Thus, problems are broken down into small experiments with frequent observation which may result in changes. Smaller batches of work coupled with the need to concentrate on value means:

• Ownership becomes a top priority - In most traditional organizations, decisions are made in a slow, consensus driven manner. Documents are used to store the details and are signed off to ensure that everyone knows who was involved. Change is treated as a problem with expensive management processes, review committees and escalation approaches. Agility requires decisions to be made, and work to be delivered allowing feedback and improvement. That requires ownership.
• Value needs to be clearly understood and measured, which seems like a simple requirement - The reality is that much work does not have a clear connection to value. Measurement is also very difficult as organizations wrestle with visibility, transparency and ownership.
• Teams must be aligned to customers – Often teams have a poor understanding of their relationship with a customer and even if they have the benefit of knowing the customer they neither are aligned to them or can get access to them. Customers are managed by the front end of the business, sales, marketing and support. Product development has to work with these organizations to get access and feedback.
• Frequent understanding requires frequent observation – For digital products, that means delivering them to customers to be used. Delivering frequently has huge implications on every part of the development process from how requirements are managed, to how the product is tested. How the underlying software is architected also changes to support smaller more frequent changes. For non-digital or hybrid products the need to gather frequent feedback also changes the way work is done with more of a focus on frequent review, simulation and testing.  

Work is not owned by a manager

In the new agile world, it is neither possible to tell people to do a particular task or plan at the same level of breadth or depth. Work is defined, managed and executed by empowered teams who are not focused on the task, but instead the outcome they are trying to achieve. Quality including technical debt is treated in the same way that value is treated allowing the team and the business to make explicit, transparent decisions on trade-offs. But moving away from traditional managed work to a more agile approach requires more than managers stepping away but requires organizations to have:

• Clarity of accountability and ownership – In most modern organizations everyone is responsible, but no one is accountable. In an agile organization, it is clear that the team is responsible for the outcomes, the business for deciding where to focus the team in terms of value and the organization accountable for building the environment for the team to be successful. By having clear responsibilities and allowing teams to make decisions agile organizations can quickly cut away lots of the waste associated with traditional top down management approaches.
• Management focused on building the right environment – Many managers get their position because they are good at doing the work. That leads to a culture of “parental-ism” with managers telling people what to do. For simple work this can be effective, but when work becomes complex and process variable it is very difficult requiring the manager to be always there. The management role therefore has to change to coaching, and servant leadership helping the team deal with the work and focus on the outcomes.
• Projects replaced by products – For many organizations, work is done through projects, and at any one time there are thousands of projects being run. Each project has funding, resources and lots of documentation. People work on multiple projects and teams are created and destroyed frequently. Agility does not force an organization not to do projects, but does encourage a more focused, team centric approach to work. By reducing projects and moving to a product or customer alignment, teams can better focus on outcomes. Additional benefits are simpler planning cycles, reduced complexity of communication and reducing of the dreaded context switching problem. Projects will still exist for initiatives that cross multiple customer / product / outcome boundaries, but they will not be the norm. 

Teams are real

At the very heart of the agile organization is a collection of teams, self-organized and empowered to make decisions. They have all the right skills to deliver value and are supported by an organization that fills in any gaps and helps them to get better.  At scale that means teams of teams and the adoption of practices to ensure that dependencies are effectively managed. But unlike in the world of mass production, agile organizations do not benefit from “throwing lots of bodies at a problem”, and instead encourage leaner, “smarter” organizational models. Organizations may need to change their approach to teams by:

• Concentrating on building long lived teams – Teams are not a new concept for organizations, in fact for many they like the idea so much they put people on multiple teams. Agile organizations encourage a more focused, people centric model with teams having an identity and consistent membership. That means that work is brought to the team rather than the team forms around the work. This will require a change in thinking and process for many project management organizations.  
• Separating of work management from people management – It is very hard to be transparent when the person who reviews you, determines your bonus and decides on promotions is working with you on a daily basis. By having a clear separation of work management and people management on agile teams encourages transparency and openness. Work is managed by the team, people development and management is either managed by some sort of community or guild, or by more traditional management.
• Incrementally evolving the architecture towards customers – For many organizations, individuals are aligned to applications and those applications are reused in many different customer or value contexts. That leads to complexity with everything affecting everything. Modern, agile enterprise architectures focus on optimizing for agility. That may mean that some things are duplicated and that the total cost of ownership for an individual application might be higher, but ultimately the value of responding to the market outweighs that cost. Optimization moves in terms of location in the stack as it has done previous with changes to the cost of disk space or processing.
• Diversity matters – To respond to complex problems requires experienced teams with a variety of different perspectives and skills. Diversity of opinion, idea and solution are crucial for delivering value. But for many organizations team boundaries re-enforce departmental, system and experience boundaries. For agile to work, and for organizations to deliver great customer solutions it is important to build diverse teams that challenge the status quo, look and feel different.

Introducing the 5 challenges of Agile Transition

Moving to the “new order” is not easy, and many organizations have begun the journey with the adoption of Scrum, and are looking at scaling frameworks such as LeSS, SAFe and Nexus, and organizational models like the Spotify. Unfortunately, there is no single silver bullet for “transforming” your organization into an agile, digital native enterprise. Looking at organizational frameworks and scaling models are great tools and just one piece of the puzzle, as the move requires a more holistic approach to agility. It also cannot be thought of as replacing one methodology with another, but instead something more fundamental to the way the organization responds to the market and delivers value. Organizations should concentrate on 5 broad challenges.

1. Support and protect agile culture with strong leadership
2. Help teams and stakeholders to self-organize
3. Manage your portfolio with outcomes (not output)
4. Systematically remove sources of waste and delay faced by Agile teams
5. Measure and improve value delivered with frequent feedback (inspect and adapt)

Support and protect agile culture with strong leadership

The culture of the organization is defined by the norms enacted by the organization in how they do everything. Leadership defines and re-enforces those norms in the actions and words. Having leaders that embody the values of agility and reinforce its principles is crucial for any transition. For example, agility requires a continuous approach to learning and understanding, but if leaders focus on mistakes and apportioning blame, then it is likely that any empirical process will not work.

Help teams and stakeholders to self-organize

Creating an environment where teams self-organize and are empowered to make decisions that deliver value is the foundation for agility.  Unfortunately, just telling teams to be empowered and self-organize is not an effective way to introduce those ideas. Instead change needs to be introduced incrementally and practices such as Delegation Board from management 3.0 can help slowly move teams to taking the lead.  

Manage your portfolio with outcomes (not output)

Agility like anything is only as good as the outcome you are focused on. By building an agile enterprise that is focused on customer outcomes rather than work you not only enable better alignment, but you also drive a clear vision and objective. Traditional organizations have always focused on the system, with only small parts of the organization being connected to the customer and the outcomes they seek. Modern, agile enterprises make outcomes in the context of customers’ needs front and center and make everyone responsible for them.

Systematically remove sources of waste and delay faced by Agile teams

Waste is the enemy not of efficiency but of value. Waste to agile teams is anything that stops them from delivering value and improving. Waste such as hand-offs to external departments to waste in time spent in review meetings. To become more agile everything is on the “waste removal” agenda and nothing is “set in stone”. That means that groups such as finance, audit and compliance need to be part of the change allowing them to be review existing processes with a view to change. Planning is often an area where waste is present with long term planning cycles and change management processes taking valuable time away from key stakeholders and delivery teams. In Scrum, waste is managed throughout by making it transparent in the daily Scrum and opportunities for improvement being discussed in Sprint Review and Retrospective. But outside of any particular framework agile teams look at everything with an eye to learn and improve. They also have the courage to challenge the status quo.

Measure and improve value delivered with frequent feedback (Inspect and Adapt)

If you were going to measure one thing to determine if an enterprise is agile it would be how frequently they get their customers, stakeholders and teams to review the delivered items. Getting real data on the use on what you have delivered, coupled with a desire to create the simplest thing to get feedback are cornerstones to agility. Famous agile organization customer centric organization Amazon famously delivers software every 11.6 seconds. Not because it wants to add more features, but because it wants to try new ideas with its customers and get feedback.

Summary

It seems ironic, but many organizations think of a move to agile as a hill to be climbed using traditional approaches. Build a plan, find the resources and then execute. But becoming an agile enterprise is much more than adopting a particular process framework or changing job titles. It is a fundamental change to the way in which you respond to the market. Organizational models, processes, tools and even the underlying products will change frequently in response the needs of the customer, market and stakeholders. An agile enterprise is at its heart a customer-centric learning organization. Peter Senge in his book the 5 Discipline, The Art and Practice of a learning organization describes the need for an organization to becoming focused on learning.

“The only sustainable competitive advantage is an organization's ability to learn faster than the competition”.

Ultimately, by concentrating on the 5 challenges of agile leadership, self-organization, becoming customer outcome centric, waste adverse and frequently delivering learning the culture of the organization, organizations will become more focused on learning and will become more agile.  

About the Author

Dave West is the Product Owner and CEO at Scrum.org. He is a frequent keynote at major industry conferences and is a widely published author of articles and research reports. 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) for IBM/Rational. After IBM/Rational, West returned to consulting and managed Ivar Jacobson Consulting for North America. Then as VP, research director Forrester Research, he ran the software development and delivery practice. Prior to joining Scrum.org he was Chief Product Officer at Tasktop where he was responsible for product management, engineering and architecture. As a member of the company’s executive management team was also instrumental in growing Tasktop from a services business into a VC backed product business with a team of almost 100.