15th State of Agile Report

Transcript

Good day, folks. This is Shane Hastie for the InfoQ Engineering Culture Podcast. Today I have the privilege of sitting down with Derek Holt. Derek is digital.AI, GM of Agile and DevOps. And we're going to be talking about the 15th State of Agile Report. Derek, welcome. Thanks for taking the time to talk to us.

Introductions [00:57]

Derek Holt: Shane, appreciate you having me and very much looking forward to the conversation.

Shane Hastie: Probably a good starting point, who's Derek?

Derek Holt: So as you highlighted, I'm the general manager here at Digital.ai for actually a broad set of our capabilities, what we've internally described as our intelligent DevOps portfolio, which is really everything from enterprise Agile planning through SCM, into continuous testing, release orchestration, deployment automation. And then we supercharge the whole thing with next generation analytics and AI.

And so I look after our product teams, our development teams, our cloud ops and IT teams. But even before joining Digital.ai about 18 months ago, 19 months ago, I'm 20 some odd years. I won't date myself too precisely, but I'm 20 some odd years in the enterprise software business.

I've worked in companies like Rational IBM early in my career. And then over the last decade have done a lot of venture back technology startups, but always in software, always in really enterprise. And excited to have a chat around some of the Agile methodologies and the Agile transformations that frankly have been a huge part of my career having seen the broader story arc here over the last couple decades.

Shane Hastie: All righty. So the 15th state of Agile report, it's been around a while now.

15th State of Agile Report [02:10]

Derek Holt: It has, yeah.

Shane Hastie: Honestly, on the InfoQ technology adoption curve, we put Agile over on the right. It's the laggards and the late majority folks now. So what is the state of Agile today?

Derek Holt: Yes. It's interesting. If you go back 15 years, we've been doing the survey. I think if my memory serves were just a couple weeks past the 21st anniversary of the Agile manifesto being signed.

So we were maybe a little late until we saw this thing really catching on, but it is the longest running state of Agile survey. And it's always blows my mind where the data is used, right? There's not a conference that I would go to or often I see this now in universities where somebody's referencing the state of Agile to make a point or to touch on a trend.

But look, I think you touched on it, right? We've been on this Agile transformation journey for 20 years, right? In many ways. And as with many things, I'm not sure it's actually a destination. It's a bit more of a journey and we're continuously tweaking and improving as we progress.

Business agility adoption accelerating

And I think as I look at the state of Agile right now, we continue to see large, as well as small scale organizations driving, not just technical agility, but business agility as well. I think it's been only accelerated and become more critical over the last two years when the ability to be responsive and flexible and agile, if you will, has been hypercritical as we've all navigated the uncertainty of a, once in a generation global pandemic.

And it's really interesting to see the continued acceleration in the traditional software development and IT space, but we're also now seeing, which is super exciting to me, other parts of the business, starting to adopt Agile methodologies, marketing other functional areas in some ways as we've discussed the fact that most companies are becoming quarterly software companies, regardless of what industry they're in.

You're starting to see this alignment to say, it's not just about delivering software more agilely and more incrementally, but we also need to think about the other supporting functions and their role in being able to do all of this in an Agile way.

Shane Hastie: What are some of the Agile adoption rates? I've heard figures as high as 90% of organizations or 95% of organizations reckon that they're using Agile today? I would challenge and say that there's a fair amount of “tragile”.

86% of organisations say they use agile development for software development [04:22]

Derek Holt: If you're Agile with a lower-case A, just to be or broadly inclusive, our most recent survey, I believe it was 86% in 2021, had self-identified as saying that they were using Agile within their software development and IT teams.

And that was an increase year over year. We've seen an increase year over year for all intents and purposes over the last 15 years. And then as I highlighted really interestingly, while the other functional areas I mentioned are still in the 5%, 10%, 15%, 20%, if you're talking about sales or finance or marketing or operations.

What we did see year over year, and I would contend a fair bit driven by the realities of the pandemic, the realities of remote work, the realities of uncertainty, we saw those sort of non-software development focused disciplines more than double year over year. And from what we see both from the survey, but also from conversations with customers, that's just the beginning. That's only accelerating from there.

Shane Hastie: So what does Agile mean in those other departments, in those other areas of the organization?

Derek Holt: It's really interesting, as we discussed a little bit in the pre discussion, I've spent 20 some odd years all in the software space, but I've done a lot in large scale enterprises. And I did basically a decade in venture back in a garage, two people with no money, eating Ramen noodles, getting started in a new technology product.

The influence of Lean Startup [05:41]

Derek Holt: And one of the things that is interesting is probably about 2011 ish, 2011, 2012, there was a guy named Eric Ries who wrote a book called The Lean Startup, right? And the whole idea there was to apply Agile lean principles, not just to the way we build software, but to the way we build companies.

And it has a lot of the same things that we talk about and have talked about for a long time in software, right? The ability to make quick iterations, the ability to deliver early and often the ability to get rapid feedback, the ability to have self forming teams to go capture both opportunities or to address challenges.

And so I think what we're seeing across those other functional areas is a realization that the ability to go plan out a year or plan out multiple years is very challenging in a rapidly changing environment.

Agile practices need to be adapted for non-software areas of the organisation [06:25]

Derek Holt: Generally again, only accelerated by some of the impacts of the pandemic. And so I think what it means is a very similar to what it means in software. And in fact, you see folks using words like scrum and having stand ups and doing all the ceremonies, or at least some subset of the ceremonies that have marked Agile software development for some time.

So it'll be interesting to see how it plays out. We actually, in our own marketing organization, we have what I would describe as a scrum type approach with cross functional and self forming teams. And it's been a really interesting exercise as we recognize that our ability to simply develop and deliver software in an agile way is not enough to actually have the broader business outcomes, right? It might help us with the technical outputs, but it doesn't necessarily mean that we are going to drive the business outcomes we want. That takes a sales team, a marketing team, a financing, everybody working in that kind of nimble way.

Shane Hastie: Looking at the survey, what are the benefits? Why is this Agile stuff working?

Agile development can and does contribute to positive business outcomes [07:17]

Derek Holt: I think it's a great question, right? Because in the end, sometimes we get forward momentum and we just start doing things because we've always done them that way as the old adage goes. But one of the things that we're seeing, and I think this is a reason why folks continue to drive towards not only doing Agile, but continue to get better at it and to do it at more scale, is really around this ability to both drive the business outcomes.

But there's also this recognition of the fact that the ultimate goal is typically achieved by steps, right? It's that journey. And it's triangulation over time and being able to run tests really quickly and nimbly and to learn. And I think it has been so interesting in software because software is so malleable, right? It's not ultimately ever done. I used to use an analogy that a car wasn't that way.

And then Tesla came along and for all intents purposes, it's software on wheels, right? With a big old battery in the bottom of the car. And as a Tesla owner, as an example, like every two, three weeks, I get a new update with new functionality, no different than a smartphone.

And so it's actually now permeated hardware because in the end huge part of those hardware offerings is software. And so I think it really does get back to this notion of finding customer needs, finding customer problems more quickly, running tests and having hypothesis around what the solution is and sort of recognizing that we can always get better.

And that we can constantly AB test that we can constantly try new things and pair Agile sort of from a methodology perspective, with our ability now to do continuous deployments and to do progressive delivery and AB and blue green and all the other things, it's all helping us have this quick feedback loop with our customers, whether those are internal employees that we're building an application for, or their actual external customers that are paying with money or with their time or with their attention, depending on your business model. I think it all aligns to that kind of constant learning and triangulation.

Shane Hastie: What are the challenges that organizations are facing? What's making it hard?

Challenges to adopting agile approaches [09:11]

Derek Holt: I think there's a set of things that make it hard. I mean, one of the hardest things is just change, right? In the end, there's a need to jumpstart these types of initiatives, right? And since why often we see, if you go back historically, a lot of the Agile transformations began in pockets and then they grew from there as things came forward. You mentioned earlier sort of laggers, I would argue in any company, certainly in any marketplace, this notion of Moore's adoption curve of innovators and early adopters and lagger, like that applies not just to consumers of new technology, but it applies to just change of any sort in any type of organization.

It's very rare that you just make a change and the whole organization uniformly adopts it, right? And so for me, this ability to start and then scale from that point... I think the one other thing that continues, even though we're 20 years in, continues to be a challenge from many organizations is doing these things at scale.

Most things are easier to do at a team level, right? It's probably from a simplistic way, you can get an individual to do something, you get a team to do something, but to get teams of teams and really pipelines of pipelines, if you will, when you think about the complexity that large scale organizations are dealing with, where it's not just a mobile app that's going into the app store, but there's a legacy backend to that.

And there's a bunch of cloud services that are supporting it. So you've got to be able to drive strong collaboration across the teams as well. And I still see folks struggling with that, where it feels like we're more agile at the team level, but we don't necessarily feel more agile at a organization or at a company level. And then the last one, which is an area that we're super passionate about is the measurement, right?

I think one of the things that are so interesting to me about the last 10 years is you've seen a real heterogeneous adoption of tools for different parts of the software development life cycle, right? Whether that's planning and UI design, all the way to SCM and build and test and all of the different pieces.

And we've created, almost as an industry has created sort of inadvertently these kinds of silos of data. Where you've got sort of very interesting and within the domain, data warehouses and dashboards, but we haven't seen. And it's one of the things that we do at Digital.ai.

We think a unique take that we have is yes, we have our own practitioner level tools, but we also only spend time thinking about the enterprise. So we assume heterogeneous by default, we're not surprised by heterogeneous. And with that, we're able to bring all that data together to give more panoramic views if you will, above the team level.

So we of course do it at the team level, but also more broadly. And I'm a big believer whether you call it VSM or evaluation management, or it's just a panoramic view of your software delivery data, ultimately there's such powerful capabilities in that data that unfortunately hasn't been sort of democratized across the entire organization up until I'd say here in the last year.

Shane Hastie: So tell us more about value stream management. What does it really mean?

The value of value stream management [12:04]

Derek Holt: Well, I can't say like many of these things when it first began... In fact, you asked me 20 years ago, even today, what does Agile really mean? It's one of these terms that starts to build a bit of a life of its own. But the way I can kind of describe how I think about it, right? If the first decade of Agile was really all about, and I say this as a former software developer myself, self forming teams, the ability for us to work really incrementally, the ability to build early and often and deliver early and often, and build that new level of collaboration as we drive forward, we then saw this next bottleneck emerge, which was, okay, we're much more Agile as a team, but we can't get the software to production in a safe, secure, agile way, if you will.

And out of that, what maybe 12 years ago, or so, DevOps emerged as a discipline and then eventually as a tooling area. And now to me, value stream management is the next turn of that, which is a pre-reqs being Agile. And it pre-reqs a rich DevOps pipeline. But it's starting to get to this next level around really two things.

One, I think measuring that end to end software delivery component, Gartner will call it value stream delivery platform, that kind of execution layer. And then above that, I believe there is a really unique data layer that also includes or mashes up, I guess I would say development data, operations data. Which in operations data, I don't just mean ITSM data. I also be support desk data, user telemetry data, in terms of how the application or a feature is being used in production, and then marrying that with financial data.

And then you can get to the point, and we're not all the way there yet, right? Again, this is a journey, but I think you'll want to be able to start to get to the point in the future where we make investments in a new feature or a new capability.

And we quickly understand whether or not it's actually having, not just did we deliver it and did we close the story and say it was complete, but did it matter? Did it make the business better or worse? Did it make the customer experience better or worse? Did people buy more things from us or buy less things from us?

And I think we all recognize that things either get better or worse typically. They very rarely stay the same when you're constantly iterating on software deliveries. And so I think we're just now getting to the point where we can start to treat software a little bit more as a business process. And in the end it is a business process, right? It's just one that is ultimately and continues to be a little mixture of science and art all at the same time.

Shane Hastie: So scaling, this is the one we all love to hate, why do we have to scale? There's a conversation out there about how do we descale, do we descale?

60 years of technical archaeology [14:34]

Derek Holt: It's interesting. And if I had the solution, I would tell you very directly to it. But I think one of the things that's often missed around the why we have to do some of these things at scale, is the fact that we are now all sitting on 50, 60 years of software archaeology, right?

Like the reality is... Unless of course you go off and start a brand new company. And the first line of code you write is literally the first line of code. And you don't have some of the... I don't want to call it technical debt because that tends to have a bad connotation to it.

You just don't have a technical history. And look, in the end, when I think about it, especially for us working with the world's largest organizations, all of which have been really at software since the beginning, right?

Somebody bought a mainframe 50 years ago and they've been chipping away at it since there are these dependencies that exist throughout the organization. And it's very rare to work on something in large-scale environments where you're completely in white space and it's a completely greenfield opportunity.

And so I think some of the scaling is rooted in just the realities of the software legacy architectures and the dependencies that exist there. And then when we look at some of the problems that are now being solved with software, and the scale at which we're trying to do, use autonomous as a great example, or some of the other kind of AI spaces, these are just hyper complex and they just need horsepower.

And I think it's been interesting. I had the opportunity early in my career to work with a guy named Steve Case who was one of the co-founders and CEO of America Online.

He used to talk a lot about in the early '90s, I want to say something like 3% of America was online total and it was for 60, 90 minutes a week or something. And so when they called that service America Online, which for all intent purposes was the first sort of at home internet service that scaled in the United States, they literally meant get America online.

The name was very purposeful in that regard. But what has been interesting is that first five, 10 years was about getting people online. The next five, 10 years was about moving some services online. Now we can share photos, I can check my bank account balance, I can do some cursory things.

We now think the last 10 years with mobile and frankly the pandemic, again, accelerating all of this around many organizations, having a digital secondary relationship, but a physical relationship with their customers to going overnight to a completely digital. Think of a retail store or a grocery store, you're just a total dramatic shift.

And with that, we're now solving really, really big problems, right? We just keep solving bigger problems. And so it is an interesting question. And I think in many ways we can descale around things that are able to be descaled. But I still believe that there's going to take a whole heck of a lot of developers to figure out how to do self-driving cars. And with that, there's just the complexities of teams of teams, right?

Shane Hastie: A big one. What's the future of work?

Exploring the future of work [17:24]

Derek Holt: Really, really interesting one. This is one we've been talking a lot about. It's actually in the state of Agile, it's one of the first times we've asked a lot of these questions and it's been interesting. Agile teams have, while self forming, they've actually been pretty much attuned to being globally distributed for the better part of 15, 20 years I would say in some ways, maybe even started.

Sure, there are still some constructs. If you're a SAFe shop, there still was this notion of, "Hey, we're going to do PI planning and we're going to get 150 people together." And so the impact of the global pandemic was pretty dramatic there.

But as we looked at the survey data, we tried to ask questions to really define the future of work, but we saw only 3% of the respondents thought they would be back in the office full time in the future. Now, at the same time, we saw a little bit more of folks that said, "Hey, I've always been remote..." I think it was like 15%, 16%, "Always been remote, continued to be remote."

And then you saw the overwhelming majority in the 75%, 80% range of folks that said, "Hey, I think it's going to be some sort of hybrid. I think we're going to be able to have this balance of I'm calling in today. I work from home on Fridays, right? I work from my home office on Friday. I'm set up, I'm good to go."

Where I happen to live in the US, in fact, today, the mask mandates are gone and literally it's five o'clock today. So actually it's five o'clock Eastern right now. So the mask mandates have just been lifted. And with that, we started to go back into office optionally a couple days a week.

And I think that is going to be the model. And I think really, even beyond how that impacts how we build and develop software, the thing that's super interesting to me is what the impact that is on office space. How do we think about the spaces that we work? Is it more about a gathering space than it is about a cubicle or a desk or an office?

I think about what that means for transportation, right? A huge amount of the infrastructure in cities is rooted in getting people in and out on a daily basis. Well, what if that is a little bit different than it was in the past? So it'll be interesting. If I had to make a bet, I would say it's going to be a blend.

I think there's some things. And I see this now that we're starting to get together a little bit more. There are some things that just still are much more effective and efficient together, including like relationship building, as you know Digital.ai was formed through a series of acquisitions.

And so with that, there was a lot of relationships that needed to be formed. And we're now able to do a lot of that in person, brainstorming, whiteboards and were big fans of all the online collaboration software.

And it's gone a long way, but there's still something about picking up our pen and drawing on a whiteboard. On the flip side, I think about how productive I can be on a Friday when I know I don't have to commute when I can just open my laptop and start cranking through things.

We instituted some no meetings parts of days too, to make sure folks have the space to drive it forward. And so I think hybrid is the future. And I'm excited about what opportunities there are, not just to kind of look at work life balance, and to get some time back that I might have spent in the car or folks might have spent in the car, but also, and I'll speak to this a little bit more US centric, just because I'm more familiar with the market, really too often, there were a handful of locations that folks felt they had to go to in order to be part of the software or the tech culture, right?

Like if you look at the venture capital market in the United States, 75% of venture capital goes to three states. So there's 50 states, three, California, New York and Massachusetts. So San Francisco, San Diego for biotech and life sciences, New York City and Boston, 75% go to those three cities.

You can't convince me that 75% of the good ideas are in those three cities or 75% of the most talented people are in those three cities, nor that those three cities represent... And I love all three of those cities, don't get me wrong. I enjoy visiting there, but you can't convince me that that's the perfect place for 75% of people to live, right?

So I think you're now also going to see with this heterogeneous reality that access to talent and being able to live where you want and grow companies where you want, I think it's a really, really exciting and dynamic time ahead.

Shane Hastie: One of the challenges that the high-tech industry has faced is we haven't been great at diversity and inclusion. Now I know that the Agile alliance is actively tackling this and a number of other bodies are, what, if anything, did the state of Agile tell us about that and where are we headed?

Tackling diversity and inclusion in the tech industry [21:38]

Derek Holt: It's an absolutely critical topic. I think any company, any geographic location, any university. Everybody should be and is thinking, and I think the root of this is both in inclusion and the importance of equality, but also the other real upside here is diverse teams are more creative and it just study after study show, the more the diversity, the more likely you are to have a more high performing team, right?

So this is a space where to me all incentives are aligned – it’s the right thing to do, but it also drives really, really aggressive outputs. Unfortunately, as you bring it up, we didn't dive into it. It's one that I'm going to now go back and say, we need to put this into our next survey because it would be really interesting to look longitudinally over time, at what evolutions are making and the progress we're making and like any other area where we as individuals or as companies, or as an industry need to approve.

One of the first things you have to do is shine light on the data, and you got to understand where you are starting. And then you know ultimately if you're making progress. You mention Agile Alliance, a bunch of organizations that I'm familiar with and have engaged within my life, both in the startup space.

There's a bunch of really interesting groups in Silicon Valley and others that are really focused on inclusion and opportunity. Ultimately, I just think this is a critically important area. And especially as we talked about earlier, as software becomes part of everything, it is also just a category of job and career opportunities that's expanding.

And so making sure that is expanding for everybody no matter who they are or where they're from or all of those realities, and look, I think there's an exciting period of time as we look at what's the future of higher education, what's the future of our ability to gain some of these skills really quickly online, right?

And get started and get opportunities for jobs. The realities of being able to have access to opportunities, not just if you're in Silicon Valley, but wherever you are, I think is a really, really interesting opportunity for us all to improve those directions. Again, to say, I wish I had one or two things that I'd say, if we did this and this, we would get there, but I think it's just a matter of focus and driving it. And it's something we spend a lot of time talking about and driving activities are around in our own company. And it's something I think we all know we can get better at.

Shane Hastie: Derek, thanks very much for taking the time to talk to us today. If people want to get hold of a copy of the report, where do they find that?

Find the report at stateofagile.com [23:52]

Derek Holt: So that's a super easy one. If you just go out to stateofagile.com, a cool URL that we happen to have, or of course you could go to Digital.ai. So our URL is just digital.ai, you'll be able to find it freely downloadable. In fact, you can also go back and get the last 15 years of surveys and we're actually doing some work right now around, and you'll see some of this in the 15th anniversary edition, but there's some other stuff that we're doing with a few universities around making that data available so that we can actually start to look for kind of mega trends that either we missed, or we didn't have the bandwidth to be able to look into.

And so certainly would encourage folks to go download it, certainly check out Digital.ai as well, and definitely reach out if there's anything we can do to be helpful along the way. And again, Shane, I appreciate your time and all the work that you guys do. It's exciting to have an opportunity to chat with you and look forward to having another one here in the future.

Shane Hastie: Thank you so much.

Mentioned

• Digital.ai
• State of Agile Report