How to mess up your agile transformation in seven easy (mis)steps
The
journey to become agile is challenging. But your organization can avoid some
common pitfalls that we have seen companies encounter, including failing to
create buy-in around an aspiration and forgetting to put culture first.
You have to give it to
Silicon Valley: it sure knows how
to disrupt industries. It has left its mark on every facet of our life—from how
we socialize and interact, to how we travel, how we earn, and how we pay. The
scale of impact has led to traditional companies in the ecosystem asking
themselves, How do we get our large organizations to adapt and move as quickly
as these nimble start-ups? The answer in many cases has to do with being more
agile.
Agile principles have
been one of the key drivers of Silicon Valley’s ability to innovate, learn, and
adapt rapidly. Agile started as a set of principles for software development to write and release code
iteratively without waiting for months (or years) to release functionality. The
term “agile” has now expanded to many facets of solution development with the
same underlying principles—develop iteratively, release frequently, focus on
the customer, and collaborate through a cross-functional team—always
prioritizing test-and-learn methods over detailed planning. Beyond solution
development, we are designing and implementing enterprise-wide operating models
based on these principles.
While many traditional
heavyweights have embarked on agile transformations, most have faced real
challenges in achieving their desired objectives. Based on our experience
across numerous transformations, we see the following as common missteps on an
agile journey.
Misstep 1: Not having alignment on the aspiration and
value of an agile transformation
Agile, fundamentally,
is a redesign of the operating model of (parts of) the enterprise. We have
often seen organizations embark on such transformations without first ensuring
alignment among the leaders of the organization on the aspiration and value of
the transformation. Further, even when there is such alignment, we often see
companies that, in the spirit of adopting some agile principles—such as
experimentation and empowered teams—end up creating a burning platform, as
different leaders across the organization choose different approaches to
implementing agile, while others dig in their heels to maintain the status quo.
While we don’t
encourage attempts to design an end state in granular detail, the depth and
breadth of an agile transformation requires aligning at a high level on the
aspiration, the value it would deliver, and a plausible plan for achieving it.
The identified value drivers are then used throughout the transformation, from
guiding the design of the operating model to ensure value delivery, to
designing metrics to monitor value capture during rollout. Not doing so can
constrain the impact the transformation might have.
For example, a large
global company initiated a bottom-up agile transformation without first
aligning on the end-state aspiration and the value the transformation would
create. The transformation ended up having limited impact, as teams in
different parts of the organization applied agile principles to varying degrees
and in multiple flavors, which led to a significant increase in the overhead of
managing across teams. Further, the lack of alignment on the value of the
transformation meant that teams spent little time thinking through and tracking
the value their efforts would deliver.
Misstep 2: Not treating agile as a strategic priority
that goes beyond pilots
Too often, companies
find themselves limiting agile to pilots within a small part of the
organization, with a small set of leaders. While the pilot is typically
successful, its impact is restricted to a few teams or a bunch of
technologists. The limited nature of the pilot often prevents the CEO and
executive team from grasping the far-reaching impact and strategic value a
broader agile transformation could have. Companies often end up carrying a
series of such pilots, before they’re eventually killed once the need to
reallocate funding for new initiatives arises.
While it is completely
OK to start the agile transformation within, say, a small part of the
organization, it is important not to stop there and to treat it as a strategic
priority for the enterprise. Taking agile beyond small experiments is where the
real benefits arise. For example, a large North American company was trying to
implement agile in its technology organization, which encompassed 1,000-plus
people. Every time business executives were asked about agile, they had a limited
understanding and simply referred to it as “that project the technology team is
trying to implement—we know nothing about it.” The impact was limited, until 18
months into execution, when a massive change came about because one of the
senior vice presidents started to take interest, understand, adopt, and make
changes to his business practices to match the more agile technology
organization. This led to an enterprise-wide transformation, with agile being
identified as one of the top five enterprise priorities.
Misstep 3: Not putting culture first over everything else
Words cannot emphasize
the cultural implications of an agile transformation. Ignoring the cultural and
change-management implications of agile is one of the biggest mistakes large
organizations make. Successful transformations require not only bottom-up
change in the way of working at the team level but also a change in the way the
executive level operates, as this has a disproportionate influence on the
culture of the organization. “Culture is the king,” as a senior executive
appropriately said when referring to the recipe for success for an agile transformation.
Conversely, an agile transformation can help drive significant cultural changes
where desired, helping increase customer centricity, collaboration, learning,
and more. These gains often require giving up some preexisting ways of working.
A senior executive who has led multiple agile transformation puts it aptly:
“The first question I ask leaders considering an agile transformation is, ‘How
much are you willing to give up?’”
For example, a large
North American company had embarked on an ambitious agile transformation and
hired several agile coaches to support teams. However, leadership in one of the
businesses continued to work within the paradigms of the old culture: they were
hesitant to empower teams, wanted detailed designs of the end product, and
asked for project-management-office-style status reports on a weekly basis.
Within the same organization, leadership in another business took a completely
different approach and worked on changing the culture. Leaders empowered
product owners and minimized bureaucracy. After one year of effort, the former
business had little progress to show for any of its projects, whereas the
latter had released multiple minimum viable products.
Misstep 4: Not investing in the talents of your people
One of the things that
has made Silicon Valley start-ups successful has been their emphasis on finding and hiring the best talent. That talent is the fuel that powers the agile machine.
This allows companies like Amazon to create truly cross-functional, empowered
teams, with high-caliber, experienced talent embedded in them.
For many traditional
organizations, talent strategy is an
afterthought of an agile transformation. In the process, some crucial questions
that merit careful consideration, such as the following, remain unanswered:
·
What are the intrinsic
skills required to be successful in the agile organization?
·
Where will talented
individuals with these intrinsics be sourced from?
·
How will these
employees be supported as they transition to an agile way of working?
·
How will career paths
change to a more expertise-based model?
·
How will performance be
managed in the new organization?
·
What will happen to
individuals who might not be required in the new agile organization?
The result: lack of
excitement about taking on the new agile roles or joining agile teams due to
lack of clarity on the career path, leading to teams that still require senior
leadership to be deeply involved in decision making. For example, a midsize
global company wanted to emphasize customer centricity as part of the agile
organization. To achieve the goal, the client wanted to create a “design
function” from zero people to more than 25 designers in various roles across
multiple customer journeys. Such an endeavor required an up-front talent and
recruiting strategy, diligent follow-up and interviews, and a careful scale-up
approach to attract talent and excite them about the role and career
opportunities. Because of a lack of detailed planning through these steps,
seven months through the agile transformation, the client had not only
struggled to recruit new designers to the function but also faced attrition
among existing designers because of a lack of role clarity and excitement. This
led to a significant amount of leadership time being spent on solving for these
challenges. A similar situation occurred with a European company, where 11 out
of 12 product owners in the first tribe set up as part of the transformation
left for their old roles as they lacked coaching for transitioning to their new
roles.
Misstep 5: Not thinking through the pace and strategy for
scaling up beyond pilots
It is one thing to
pilot agile in small pockets of an organization, where one can deploy resources
from across the enterprise to support the pilot and make it successful.
However, scaling across a broad cross-section is another story and requires up-front planning.
One must think through the readiness of the organization, resourcing
constraints, leadership bandwidth, and consequently the pace of the
transformation, among other things. These plans need to be adjusted based on
learnings through implementation.
For example, a midsize
global company had planned its agile transformation around five waves. However,
it had not spent enough time thinking through the scale of leadership bandwidth
that would be required and the effort that would go into recruiting for the new
agile organization. After completing the first two waves, the company was
forced to reconsider the pace of its agile transformation and extended it to
seven waves.
Misstep 6: Not having a stable backbone to support agile
Too often, agile is
taken as an approach to managing projects. It is important to recognize that
for teams to operate using agile methodology requires changes to core
management processes and the supporting tools that a team has access to, among
other things.
For example, iterative
development also requires iterative funding. This is a concept that is hard to
grasp for many traditional businesses. A large North American company wanted
detailed estimates of every project with respect to investment required and
benefits expected when the project was complete. While initial and early estimates
are beneficial, a dogmatic approach made product owners panic, led teams to
fight over hypothetical financials, and caused massive enterprise-wide
confusion.
Agile teams also
require the ability to deploy technology assets rapidly. For example, a large
North American company required around six to eight weeks to provision
environments, which meant that the team had to spend considerable time planning
to compensate for the time lag.
Absent these changes to
core management processes, teams may find it hard to execute rapidly, which
hampers innovation, increases time to market, and so on.
Misstep 7: Not infusing experimentation and iteration
into the DNA of the organization
If you ask
practitioners about the traits of an agile organization, you’re likely to hear most of them mention iterative
development. While this comes naturally to a start-up, which doesn’t have an
established product and needs to test and learn to develop one, it is more
complex to grasp for an organization that has not one but many product lines
that have a reputation of excellence in the market. This also applies beyond
product development—consider how your organization prepares, for example,
business strategies, recommendations to the leadership team, and product-launch
strategies. All too often effort is wasted by teams operating in a vacuum,
second guessing what stakeholders might want to see, or perfectly executing the
wrong plan rather than engaging stakeholders throughout the process to get
input regularly and ensure the team is focused on what really matters.
Another aspect that
often limits experimentation is the rigid application of scaled agile
frameworks. Too often, companies end up shifting the focus of an agile
transformation away from minimizing processes and changing mind-sets and
behaviors to enable innovation, toward putting in place the right framework.
While frameworks can be valuable in providing structure to the transformation,
it is important not to be rigid in their adoption, and to always think of how
they can be adapted to suit the needs of the organization. After all, one of
the pillars of the original agile manifesto was to favor “individuals and
interactions over processes and tools.”
For example, while a
North American company embraced iterative agile development in theory,
management stuck to a rigid framework it had developed that required high-fidelity
mock-ups of the end product and detailed business plans before product
development had even commenced. An agile organization would have done just
enough to get a version of the product out to market quickly and gather
feedback from customers to guide future developments, seeking input from the
real end users of the product. This rigid application of the framework ended up
limiting the impact of the agile transformation.
There are undoubtedly
many other examples of missteps that have derailed agile transformations. In
our experience, these missteps are largely preventable but too often result in
agile being written off. Becoming armed with the right level of understanding
for how to drive an agile transformation, and respecting the complexity of such a
transformation, is a first step toward a successful journey—and based on the
impact we have seen with companies that have undergone successful agile
transformations, a very worthwhile investment to make.
By Christopher
Handscomb, Allan Jaenicke, Khushpreet Kaur, Belkis Vasquez-McCall, and Ahmad Zaidi
https://www.mckinsey.com/business-functions/organization/our-insights/how-to-mess-up-your-agile-transformation-in-seven-easy-missteps?cid=other-eml-alt-mip-mck-oth-1804&hlkid=8e6aa95b232a4ba09b900ae62e9da335&hctky=1627601&hdpid=9a62de33-9c77-4300-bbb9-bdcb3109ef73
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