Is Agility the recipe for success?
Agile methods are becoming increasingly popular beyond the field of software development. Their advantages over traditional approaches to projects are evident: faster delivery of results, increased customer satisfaction, greater efficiency and flexibility.
Many companies are keen to jump on the Agile bandwagon, expecting better success rates for their projects. But they might underestimate the impact this decision will have on their organization. The transformation into an Agile company cannot simply be prescribed. It is a process that must be supported with suitable measures.
Agile approaches adhere to the following basic principle: A self-organizing team of specialists from different fields develops a product by delivering incremental results in iterative cycles. These results provide value to their potential recipient. The key words in that description are team and self-organizing. They affect multiple parts of an organization, in particular:
- Leadership: Self-organizing teams do not have their working methods dictated to them externally. A direct leadership style will have a counterproductive effect on the motivation of self-organizing teams. These teams do not have a leader who assigns task; instead, they manage and lead themselves. Self-organizing teams must be given support, advice, coaching and supervision – hallmarks of a democratic style of leadership. This approach promotes the individual skills of each team member, allowing them to take responsibility for the results they deliver.
- Culture: The successful, interdisciplinary collaboration of specialists within a team requires a solid culture of collaboration. Organizational barriers within the company must be broken down, and the team work must be actively promoted among the staff. This will establish and consolidate the Agile mindset.
- Product strategy: Agile product development comes with different roles and responsibilities. Interaction between the product development team and business partners becomes more manifold and extensive. It is important to establish structures that promote this interaction and systematize the feedback that passes between the product development team, product manager and marketing department.
- Execution: Project execution and product delivery take place incrementally: with each iteration, new, functional features of the final product are delivered that add value to the recipient. Delivery is governed by modern frameworks (e.g. Scrum, SAFe, LeSS), and the types of collaboration that take place both within the team and with external stakeholder groups follow different principles: greater individual responsibility and autonomy, ongoing verification of delivery results by the stakeholder groups, regular optimization of processes and so on.
Companies can only take full advantage of the benefits of the Agile approach, if they master these challenges and optimally integrate the Agile transformation into their organizational structure.
Promoting agile transformation
Our experience has shown that the elements that facilitate an Agile transformation can be itemized in four general categories:
- Organizational structures: Roles and responsibilities are team-based and project-based. This requires the dissolution of traditional organizational structures consisting of departments, rigid hierarchies and top-down command chains. Instead, foster the skills, responsibilities and autonomy of the teams. They must be able to make decisions. Systematic coordination between the teams is essential to ensure that they all work towards the same goal.
- Governance: Successful governance of the Agile transformation requires various components: Agile coaching, training, establishment of an Agile competence center, tools that promote teamwork and an adjustment of the way in which the company thinks about project and delivery results. Methods that are suitable for controlling Agile projects include reviews and retrospectives, planning meetings, and ‘daily stand-up meetings’, during which the entire project team assembles for no longer than 15 minutes and shares their progress to achieve the project goals.
- Measurement and performance indicators: The traditional approach measures and assesses performance indicators based solely on three parameters: cost, time and quality of delivery. This is counterproductive in an Agile system, as its focus is set on deliverables only, and performance is assessed on the basis of a fixed schedule and a baseline. In the Agile approach, performance indicators focus on team performance and the developmental process: how does the team as a whole achieve its goals? Which elements are obstructive to the developmental process? The measuring systems and performance indicators used in this approach are called story point, burndown and velocity. A story point is a unit of measurement that reflects the complexity of a task and the estimated effort required to implement it. During a sprint, tasks are completed and for each successfully completed task, the team earns the allocated story points. A burndown chart is a timeline that represents how many story points can be obtained during a single sprint or multiple sprints. It also shows how many story points the team has actually earned. Velocity refers to the overall performance of a team during each sprint and is an important indicator used in planning sprints.
- Tools: Tools such as task boards, Kanban boards and feedback boards facilitate teamwork. Not only do these tools promote transparency and internal communication, they facilitate communication with stakeholders outside of the team.
Velocity- and Burndown-Charts: Tools for managing agile processes
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Governing transformation processes actively
The Agile transformation of an organization cannot be completed overnight. Depending on the maturity of the organization, the process can take between one and three years. Numerous empirical studies have shown that the vast majority of Agile transformations temporarily reduce productivity and performance. The anticipated benefits only materialize after a while. Companies can significantly lessen the duration and severity of this temporary decline by governing and leading the transformation process effectively. Practical experience has shown that the following measures can help a company manage and lead its Agile transformation processes effectively:
- Ensure that senior management fully supports and sponsors the Agile transformation process. Without such support, the Agile transformation cannot achieve the required level of organizational Penetration.
- Effective communication that is adapted to all relevant recipients. All involved parties must be comprehensibly told what the Agile transformation process is meant to achieve, what schedule is involved, which impact it will have on individual employees, how they can contribute to the process, et cetera.
- All employees must be trained in Agile methods, e.g. Scrum, and all relevant roles and processes.
- Agile experts should be involved to support and coach the transformation process professionally. This can prevent an organization from falling back to the familiarity of traditional methods in response to setbacks, and help the company make steady and sustainable progress.
How to make a transformation process successful
Agility is often portrayed as inevitability for companies to be able to survive and succeed in an increasingly fast-paced world with ever-changing requirements. This is not true. Not all companies need an Agile transformation. Whether or not a company should embark on a process of Agile transformation depends heavily on its business environment and business goals. An organization that clearly focuses on a specific purpose (convergence) and exists in an environment with little pressure to adapt (consistency) does not necessarily require an Agile transformation.
Such organizations flourish when they implement clearly defined processes efficiently and effectively on the basis of standardized schemes. They will derive more benefit from structures and processes under the umbrella of “lean management”.
Organizations that are under high pressure to adapt must be able to tackle the required changes and change themselves (adaptability). Any organization that relies exclusively on traditional methods will become less competitive over time, as it is incapable of responding adequately to changing conditions. An Agile transformation is highly recommended to organizations in such environments.
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We can clearly see at our customers that companies in the life sciences industry are under intense pressure to adapt. Many of them are about to undergo an Agile transformation process or about to embark on one, It is particularly important for them to consider the organizational impact of the Agile transformation and apply suitable measures to govern the change process.
■ Stéphane Plattner