The benefits of agile and lean business approaches are widely acknowledged. Yet the effective adoption and embedding of these practices in big corporate environments is much easier said than done. The theory makes sense in textbooks, and the practice is easily embraced in small product teams. However, the scale, complexity and characteristics of big organisations, create significant challenges with implementing these philosophies.
Only 12% of respondents say that their organisation has a high level of competency with Agile.
Many “agile transformations” fail or get stuck in limbo mid-way. In the State of Agile 2018 report, an annual global survey with approximately 1500 responses, only 12% of respondents reported that their organisation has a high level of competency with agile practices. A mere 4% reported that agile practices are enabling greater adaptability to market conditions.
The most common mistakes to avoid for a successful agile transformation
As part of our Digital Transformation Done Right series, we are sharing our insights on how to best organise and execute digital change in organisations. These are written by experts who have really done the work, to help others on their change journeys.
Figure 1: Typical areas tackled in a digital transformation. Source: Riverflex series – Digital Transformation Done Right, February 2019.
This month, Digital Transformation Done Right is zooming in on Agile Transformation. In this article, we shed light on some of the most common high-impact mistakes we see organisations make when kicking off such an initiative. Finally, we provide you with some tips to help you succeed right from the start of this complex, far-reaching and long-term journey.
1. Leadership is not championing agile principles
As with most transformations in corporate environments, their success or failure is often singlehandedly determined by leadership and culture. Even more so with agile. Agile is a new philosophy that requires a different management approach and set of behaviours. Leaders can’t just employ their old tried and tested techniques to apply agile.
It is often the case that leaders don’t take the time to understand and immerse themselves in what agile is as a philosophy, culture and way of operating. Going into this thinking that this is “just another way of doing project management”, is a recipe for failure. They won’t be able to exhibit the right behaviours themselves – nor drive the right behaviours in the organisation. Only if the leaders of an organisation truly want to become agile, and foster the right atmosphere, will the seeds of agile take root. This means realising that they are on the same learning journey as their teams, changing their leadership style and championing agile culture from the top.
A few tips to get started
Let go of traditional management philosophies
Leaders need to let go of their traditional ways of managing, such as command and control, and truly embrace servant leadership. To achieve impact and win the trust of their teams, leaders must become approachable problem solvers, whose main priority is to facilitate teams and continuously remove impediments.
Actively support new ways of working
Another important role-modeling behavior in agile transformations is allowing agility in delivering work. If you continue to seek for project-based outputs, and demand extensive plans and approval gates – this doesn’t really show a willingness to change the way of working. This will again result in traditional waterfall processes.
Build credibility in the subject
Leaders should focus on displaying a healthy level of knowledge on the transformation topics. This can help gaining the trust of their teams as well as building credibility. To do so, it is important that leaders do keep up with theory, training and news on relevant subjects. Furthermore, they should be actively involved in the ‘learning by doing’ process of the team to increase understanding.
2. Driving transformation as a top-down initiative
Successful transformation cannot be achieved by imposing it on people. Forcing people to “do agile” is the antithesis of the very same agile philosophy that values the autonomy of the individual. One of the principles of the Agile Manifesto is:
“Build projects around motivated individuals. Give them the environment and support they need, and trust them to get the job done.”
To build this motivation and two-way trust, your teams need to understand why they need to work differently, what’s in it for the organisation, and what’s in it for them. Without this being clearly articulated and reinforced, you will be fighting an uphill battle.
A few tips to get started
Tell the story so people understand and believe in it
There is a reason why your organisation is embarking on this journey. Maybe a new digital competitor is disrupting your industry and you need to speed up delivery to catch up. Or you may have an exciting new product or business model that you need to launch quickly. Or you may be getting poor customer feedback and need to react. No matter what the reason is, your teams need to understand it and believe in it.
Don’t underestimate the value of storytelling as it creates a much more emotional reaction than facts and figures, and helps individuals feel personally invested in the outcome. A good story is also more easily shared and commonly owned by a group of individuals, which helps with alignment. We suggest spending time working on the narrative: why is your transformation important? How will individuals contribute to your success? What does the happy ending look like? Keep telling the story over and over again so it seeps into the consciousness of the business.
Figure 2: Reasons for Adopting agile*. Source: adapted from State of Agile, CollabNet VersionOne, 2018. Respondents were able to select multiple options.
Leverage successful agile adoption stories
It’s hard to argue against the commercial success of world-beating digital businesses like Google, Netflix and Spotify. They all have many agile and lean practices at their core, showcased as key enablers of their success. Showing employees that you are emulating what works well elsewhere and indicating how it contributes to top performance are great ways to bring your transformation to life. Also, use this to highlight a personal growth opportunity for them – they are learning skills that are high in demand and will keep them current in the market!
An agile transformation is a long slog. And in reality, it never really ends. After all, you are trying to create an organisation where you are continuously looking to improve and optimise. The iterative nature of agile also means that the team is constantly moving on to the next set of deliverables. Within this routine, it’s easy to forget to celebrate success. Be careful not to miss out on opportunities to highlight how the changes you are making are really delivering value. Reward individuals or teams who are exhibiting the right behaviours, and incentivise others to work in this way. To do so, you could start recognising significant delivery milestones. Or giving teams space away from product delivery to focus on other learning opportunities (such as Hackathons). Or, finally, arranging visits to other companies who are on a similar journey to gain inspiration and energy.
3. Not defining individual responsibilities and mandates
Core to being an agile organisation is efficient decision making. This should fall into the hands of people who are accountable, who are experts, who are close to the content, and who will often feel the direct consequence of the decision. People need to understand their accountabilities and remits, so that they are able to make their own decisions. Approval requests and committees bring a huge drag to the organisational velocity of agile. Some great indicators that your agile transformation is going in the right direction include: quick and transparent decision making, individuals trusting the competence of their peers, and a momentum in the organisation where people are getting things done rather than just talking about them.
A few tips to get started
Ensure everyone knows the role of the Product Owner and what their mandate is
We know you’ve heard this before, but it needs saying over and over. In agile organisations, the Product Owner plays an important role. They act as the buffer between the different stakeholders and the product teams. The larger the organisation, and the more complex the stakeholder landscape, the more difficult it is for the Product Owner to balance decisions and please all stakeholders. Oftentimes, clashing priorities can create significant frustration and inefficiencies. Organisations should create awareness across functions, markets and product lines about what they do and what their mandate is. Product Owners should be empowered, and concessions should be made to move forward.
Push decision making as low in the organisation as possible
In traditional organisations, the decision making process is situated too high in the organisation and in the hands of few people. This results in bottlenecks, hand-overs, increased cycle time and lack of empowerment of teams. Moving forward, organisations should avoid the constraints of hierarchy, allowing team members to take small decisions. Teams need to be trusted. Expertise and specialism need to be respected. Decision making should take place where information and knowledge on specific topics sits.
Accountable risk taking
An agile organisation that empowers decision making must embrace a culture of risk-taking. Team members need to feel safe to take calculated risks. They need to be able to make individual commitments, and put their neck on the line to make hard decisions or priority calls. This means that they also need to feel that they won’t be shot down if they make a mistake. The phrase “ask for forgiveness, not for permission” is often a good guideline. With this responsibility, team members must also be ready to explain their reasons for taking each decision, and the associated benefits to the business.
4. Not restructuring the business to focus on collaboration and value
At the heart of effective agile working is strong cooperation and efficient communication among teams. Teams should be organised cohesively, with common objectives and governance. Delivering great customer experiences, products or services requires input from cross-functional teams – who are able to provide different specialisms, experiences and perspectives. Most traditional businesses operate in functional teams, with management and objectives driven along these lines. This creates siloed working, where business and technology teams focus on optimising internal functions, rather than on end customers. Re-organising the company to address these challenges is one of the most radical changes required as part of an agile transformation. It is also a necessary one to reap the many benefits of agile.
A few tips to get started
Understand and define your value streams
Spend some time working out what your customer value streams are, the sequences of steps or events that deliver value to a customer. Some example questions you can ask yourself:
- What are the steps that create awareness of your brand or product in the mind of the customer?
- What are the steps that create an order or signed contract?
- What are the steps that get the product into the hands of your customer to use it?
Build your teams are around these value streams rather than internal business functions. This helps refocus on true value delivery.
Create cross functional agile teams
To create value with agile, close communication and collaboration between the right experts are fundamental. By putting these individuals into the same team, you are creating focus and alignment around common goals. How formal you want to make this depends on what is acceptable, and what will work for your organisation. Some may formally change reporting lines, others may deploy individuals into teams while maintaining existing reporting lines for line management.
Often the main focus is on combining individuals from the business and technology areas in product teams. This is an important step to fix a common issue that many organisations have with technology. But this is also an oversimplification, as “the business” is pretty diverse. It may be great that a commercial individual is driving new same day customer delivery functionality, but are logistics part of the team too? Make sure you have the right representation in the teams!
Define a clear vision and objectives per team
How success is measured and incentivised in the organisation should be realigned along the lines of the value streams. Each team should have a clear vision set out by the product owner that each member understands and is bought into. There should be clearly defined and measurable objectives, using a simple framework such as OKRs. Other than focusing the team on tangible value delivery, objectives ensure alignment between team members, and enable quicker and better decision making. A razor sharp focus on team and company objectives is key to a correct adoption of agile. An inappropriate adoption of agile practices can lead to an extreme heads down focus on each iteration, where the team is delivering, but not delivering value or getting the business to where it needs to be.
Figure 3: How success is measured with agile initiatives*. Source: adapted from State of Agile, CollabNet VersionOne, 2018. Respondents were able to select multiple options.
5. Using the same suppliers and contracting with them in the same ways
Many organisations don’t have all the required delivery skills or capacity in-house. Hence the need to partner with external vendors. Traditionally, vendors are contracted based on tendering or quoting for an extensive set of requirements. This forms the basis of a set of fixed deliverables to be worked on within an estimated or even fixed time and budget.
Should the team run into more complexity than expected or shifting business requirements, a change request or re-negotiation should be arranged each time. This puts a strain on constructive working relationships. Vendors will want to protect themselves against changes and unforeseen situations using inflated quotes, and focusing on ‘managing the contract’ rather than delivering the right outcome. One of the key benefits of agile is flexibility during development, based on new findings and insights. As such, a different approach to working with vendors and contracting becomes necessary.
The agile model turns the traditional model on its head and removes the concept of a fixed scope. It estimates the scope, and fixes cost and time instead. In this context, the vendors selected should be used to this way of working. Finally, contracts should be set up so to enable the collaboration and flexibility that is inherent to agile.
Figure 4: Different contracting models.
A few tips to get started
Create an environment of trust and aligned objectives
Internal and external vendors should be able to take pride in delivering great technology and creating value. Pre-set specifications and requirements should not be used as sticks to hit with, as it results in parties digging themselves in. Rather all parties must accept that nobody can predict what the future brings, or which obstacles may appear. As new data and information are available, plans and actions are adjusted accordingly – without extensive negotiations.
Keep a flexible scope within a fixed time and budget
Of the three dimensions of time, budget and scope – the latter should be flexible for agile delivery. A best practice is to agree on the price of a sprint, a runtime and a notice period. This enables the client to feed the vendor with prioritised high-value requirements, as long as budgets and business needs allow. The Product Owner knows how much capacity they have to “spend” on scope and is able to prioritise within this boundary, based on learnings along the way. They can plan more easily based on available budget, and scale their product teams up and down based on value creation.
Set up dedicated teams working on the same backlog
Product teams working within the same sprint should be dedicated. This means that all the skills and capabilities required to deliver the sprint should be ring-fenced for that specific sprint, be working from the same backlog, and have daily contact points. So, even if the Data Scientist in the team comes from a specialised vendor, the Salesforce developer is freelance, and the backend developer is in-house – they should all be working on the same backlog. Independent of on whose payroll they are. This promotes fast and informal communications, continuous alignment, and transparency on impediments. As a result, uncertainty, risk and integration problems are reduced.
Facilitate co-location for better cross-functional work
For the most effective communication, collaboration and cross-functional work to take place, product teams should be co-located. At least for a couple of days per week, and for important agile ceremonies. Try to procure vendors that allow people to be on the client site, especially at the start. To show trust and equality, the client team can also work on the vendor’s site, if logistics make more sense. Agile can work with virtual teams following a ‘distributed agile’ model, but this involves an extra level of discipline and maturity, as well as good communications tools.
6. Overthinking the agile process
Many organisations spend too much time planning and talking about their agile transformation. They get stuck on questions such as: Which agile methodology should we use? How should we structure our value streams? What tooling do we need to enable collaboration? That is understandable as an agile transformation is a big complex change to embark on. However, it does also miss the point of agile and wastes a lot of upfront time.
Agile is all about turning a complex problem or change into small manageable elements to be delivered in an incremental fashion. You should be addressing your agile transformation in the same way. Don’t fall into the trap of taking a waterfall approach, but turn it into small manageable elements, and deliver it incrementally. Along the way, you will find answers to the open questions you have by getting real life experience and testing the hypotheses or options you have.
This is the only way to really start ‘doing agile’, and learning how to adapt and adopt it in your business. This doesn’t mean you shouldn’t have a longer term approach or roadmaps. But these can be optimised along the way.
A few tips to get started
Focus on getting the high level defined but don’t get caught up in the detail
For a large scale agile transformation to succeed, some important initial steps need to occur. These include clarifying the scope, the vision, the intended outcomes and how it will deliver value. This enables alignment of the leadership team so they can provide consistent direction. Next to that, it enables the transformation to be steered based one what the organisation has agreed is important.
Avoid over-intellectualising this though. Don’t try to solve everything at once and think through all the details upfront. You will get caught up in analysis paralysis trying to find the perfect answer – and there isn’t one. Keep this high level, start on the journey and work out the details along the way.
Practice, practice, practice
Like most things, the only way of getting good at agile is by practicing it. And that’s the point, by working iteratively you will get plenty of opportunities to practice. For instance if you follow a Scrum approach then every week or two you will be carrying out the process and ceremonies over and over again. This will provide you and your teams with shared experiences of what is working well and not so well – so you can improve.
Always run retrospectives!
Retrospectives are important to focus your team on continuous improvement and learning. While they are often the agile ceremony that gets de-prioritised the most, you shouldn’t make this mistake. This is your opportunity to have honest and candid discussions within your team. When starting out this may be a challenging step, as team members may not be used to collectively reflecting on their work in such a way. Be persistent, and it will quickly become easier and go a long way to creating the transparent and collaborative culture required for agile to succeed.
Building agility into a business is key to improving time to market, customer centricity, innovation and nimbleness to outperform competitors. The stakes are high to get it right! This list wasn’t meant to be an exhaustive rundown of all the mistakes organisations risk making at the beginning of an agile transformation. Instead, we preferred to focus on the most high impact errors we have seen organisations get stuck in over the years. Mistakes and bumps along the road are part of any business journey. The good news is that those mistakes can be mitigated or avoided altogether if they are understood upfront and actively managed. We hope this piece has provided you with valuable insights for how to start your next agile challenge. Our Digital Transformation Done Right series of articles will continue to provide guidance and insight to help you do just that.
Below a bit more about Riverflex and the authoring team
Riverflex is a new type of consulting firm. We deliver digital expertise and value by combining top consultants with the power of independent specialists — providing digital consulting, staff augmentation, and interim management services.
Contributors to this article
André Azadehdel, ex-Deloitte, Riverflex Founder and Director. Past clients include Canon, Clear Channel, O2 Telefonica, and SABMiller.
Sohrab Hosseini, ex-CTO Transdev, ex-McKinsey, and now IT & Digital Strategy consultant. Designed and rolled out multiple digital and agile transformations in Fortune 500 companies.
Victor Hoong, ex-Deloitte Digital partner, Riverflex Founder, and Director. Past clients include Adidas, IKEA, and Ahold Delhaize.
Kenny Cruden, ex-ThoughtWorks and now independent consultant and agile coach.