As before, we need to emphasize that Agile Transformation is a process that never ends. There is no end state. This a learning process of the organization. The difference is if we observe some positive outcomes (continuous improvement) on this journey or not.
Agile Transformation is not a goal itself, but it is a means to an end – to become a learning organization that continually improves and delivers valuable products to the customers.
From my experience regarding cooperation with plenty of companies, the willingness to become more Agile does not equal their actions. Some of them are improving and enjoying benefits, some of them are still complaining, not taking many actions, in fact.
This process requires changes in the mindset, strategy and operational level.
Changing mindset means moving from traditional, predictive environments to empirical process – challenge people at each level. They are challenged to shift their way of thinking. As an outcome of this action there is a comprehension of empiricism as an answer to complexity. Understanding the necessity of frequent inspection and adaptation and the importance of transparency.
The organization sets up transformational goals and is deliberately value-oriented and customer-oriented. The product portfolio is ordered based on customer value and other factors. Investments in products with limited/low potential opportunities to the market are not founded. The company benefits from running experiments and makes decisions if it is worth it to invest. The overall Agile transformation vision is clear and understood by the entire company.
Changes in organizational structure are often required (for instance, moving from project-oriented organization to product-oriented organization or reducing hierarchy). Self-managing teams also demand top and middle-management, not only allowance, but also support. The organization intentionally uses an evidence-based management approach.
Once the organization realizes that the Agile mindset is a prerequisite of the successful transformation and understands and truly behaves in the Agile manner. There is an easier way to expect positive outcomes because of the change. It becomes natural to the organization to set up important goals and make decisions based on facts, towards these goals and value. Constantly inspect & adapt.
Not surprisingly, companies that took this effort (frequently only in some departments, not the entire organization) may observe some significant results – improvements in some areas. These areas can include: customer satisfaction, market share, innovation rate, time-to-market and many others.
Below there is a list of indicators based on my research and experience. You may find them helpful while assessing your current state in your company.
Top-management is actively involved in the process, decisions are being made according to evidence.
Each company, that I had the pleasure to visit, and consider as at least partially Agile (several departments), – always had a receptive management board. Being involved in the Agile transformation process means that executives not only support but they make important decisions as a result of the inspection of the current situation. For instance:
- They create the agile transformation vision and act accordingly.
- They continually and actively help transformation to make it happen.
- They set up important goals together with other representatives based on the topical situation.
- They are able to improve themselves as a top-management team (how can we better serve our organization instead of typically how can the organization better serve us).
- They change or support all structural changes that lead to the product-oriented organization and flatter structure.
- They represent a customer-first attitude.
- Employees are the key to success; they support them.
- Decisions are clear, understandable to the whole organization and transparent.
- They foster a positive, agile culture.
- Top-down management is replaced by leadership, allowance for people’s creativity and delegation of decisions.
This process requires self-awareness, maturity and transparency.
Transformational goals and reasons are clear and understood by the entire company (or relevant departments).
Interestingly, in some organizations that have clear objectives towards Agility, the employees’ engagement in the process was significantly higher (up to 80% employees declared their commitment to the transformation and acted accordingly). In those organizations that had blurred reasons for the transformation or causes, were not transparent. The employees were not eager to make changes in their environment, accepting the status quo.[i]
Not only does the employees’ engagement matter regarding the topic of goals, but also the clear direction for the organization enables unexpected positive changes (for example, HR, Law, Finance – once they cooperate with Scrum Teams and Product Owners, frequently change their way of working and processes are simplified).
Clear goals making the process understood and transparent. In addition, the progress towards these goals should be frequently measured and actions leading to reaching these goals repeatedly verified and adapted when needed.
A transparent and explicit Agile transformation vision and reasons are other factors that make the whole process successful.
A coherence between a vision, goals and actions build trust and people’s commitment to the case.
Middle-management actively helps. They represent consistent and aligned leadership.
Cooperative management is one of the key success factors of the Agile transformation. Moreover, the research shows that middle-management behavior is one of the most common blockers or enablers of the process.[ii] The managers I have been working with, demonstrate the different level of understanding the purpose of the transformation process. The worst thing is to perceive a process as a danger of losing a job, power, impact, etc. It is quite opposite. The transformation gives many opportunities for managers and directors. For instance, they might take care of:
- Waste – is identified and removed
- Value-added work is performed
- Being Change Agents
- Servant–leaders for their people, product and organization
- Working on a positive, healthy culture.
More you can discover here.
Revealed organizational impediments are being resolved.
Another yet important success factor towards Agility is the impediments’ removal. In some successful organizations, not only did they identify the current waste and impediments, but they were also regularly removing them, measuring the impact/results/outcomes after each removal.
The customer-oriented, value-driven organization measures progress against goals.
The essential element to upend the mindset is to be a customer-driven organization. In old, large and traditional organizations, people often satisfy executives or generally management. In modern, Agile or Lean organizations, the customers, employees and value delivered, is the most important concern.[iii]
Working and living in complex, fast-moving environments requires different reaction than for other types of work. Once the company truly understands this, they will behave and act accordingly. For instance, the Agile transformation expectations are expressed in terms of goals to achieve with frequent feedback loops and continuous improvement. There is no intention to create a detailed, exhaustive plan and follow it without any changes in the meantime, as they know that this is an unrealistic expectation. Changes are perceived as a natural occurrence in a dynamic and responsive environment.
A positive, motivating culture does not pay attention to hierarchy.
Build the culture, foster it. Many organizations do not pay attention to the culture or assume that some rules and processes will constitute it by definition. Unfortunately, building culture is not an automated process. Successful organizations almost always foster a positive culture and live by values. These are some “ingredients” that should contribute to the culture:
- clear objectives and vision,
- awareness and self-awareness,
- ongoing feedback to reinforce and to not discourage people,
- challenges that lead to innovations and improvements,
- empowered employees,
- committed leaders,
- right metrics,
- avoiding “silo thinking” and many more for certain.
Engaged and motivated employees, empowered to manage themselves.
This is another essential success factor regarding moving towards Agility. In those organizations, I may confirm that they are delivering effectively valuable products, employees are treated as important assets. Their engagement usually derives from their contribution and commitment to what a company does, empowerment to make decisions to a certain extent, allowance for their development and learning, being challenged to solve complex problems, understanding customers and business objectives. Employees’ engagement in the Agile transition process is a key factor. Bottom-up creativity and intelligence can make the whole change process smoother and faster.
Learning, findings and experiments are welcomed.
In this article, learning and experiments have been mentioned several times. The reason for repeating these words is to emphasize their importance. Companies that need to compete in demanding markets know it as well. There is no time for stagnation or delays in a decision-making process. Nowadays, companies more frequently have an awareness of the necessity of hypothesis validation and making a decision based on findings.
Smooth collaboration inside and out.
Another yet important idea, is the close collaboration inside the organization and with customers, users and partners. In most successful organizations, there is no “we” and “them”, business versus IT/production/delivery, or other similar formations. Regardless of the organizational structure, there is always a ‘we’ attitude and common goals to achieve.
A company should also strive for fruitful cooperation with customers, users and business partners. Focus on delivering value.
Product Owners are empowered to make product decisions.
Value maximizers (or optimizers) who are empowered to make product decisions and manage the Product Backlogs are enablers of learning and evolving organization. They create hypotheses, validate them by running experiments and make a decision based on findings. The most valuable items are on the top of the list. They have the final word on what to develop and why. Clever organizations understand this.
Another article on this topic can be read here.
Scrum is implemented with respect to empiricism.
In the majority of successful organizations that I visited, the Scrum framework or Scaling Scrum (i.e., Nexus) or other Agile or Lean frameworks, were enacted in an empirical way. Frequent feedback loops, inspection and adaptation, measuring value and decision-making based on evidence, were part of the normal activities. This approach is achievable even in large, corporate environments. To implement Agility, it is required to understand the concept on the mindset level, include it in the strategy and operational level. Changes are inevitable, especially on the organizational structure and processes (simplification, waste elimination).
Now, consider, how the situation is in your company. Answer Yes/No to each statement. The result will help you proceed with some improvements.
- Top management is actively involved in the process of Agile Transformation. Yes □ / No □
- The top management has a clear Agile transformation vision (the question “why” is answered). Yes □ / No □
- Middle-management is supportive, changes organization towards Agile and Lean principles, helps remove impediments, empowers employees, supports creativity and teams’ self-management rather than “utilize resources.” Yes □ / No □
- Agile Transformation is not a goal itself. There are several other reasons to run the change. Yes □ / No □
- Value is measured and decisions are made based on facts. Yes □ / No □
- Organizational impediments are known and continuously removed. Yes □ / No □
- Customers’ needs and satisfaction are always taken into account while developing products. Yes □ / No □
- Hierarchy is not crucial in the organization. A top-down approach is minimal. Employees take responsibility and their voice is heard. Yes □ / No □
- Experiments are a reasonable way of dealing with uncertain, complex situations. Yes □ / No □
- Product Owners are the products’ empowered owners (unlike components or teams’ owners and proxies or scribes). They are authorized to maximize and optimize the value of the product and make decisions. Yes □ / No □
- Employee satisfaction is high. Yes □ / No □
- Employees understand the necessity of the organizational change, actively engaging in the process, proposing optimizations, improving their way of working. Yes □ / No □
Once you have all statements answered, rethink what you can personally do to make improvements and who can help you. In some cases, depending on your position and influence, the only thing you can do is to make all issues transparent. That is also important. Creating awareness can be the first step.
If your organization has already decided to move towards Agility or you are already in the process, regardless of your position, there are a few ways to change the environment and enable positive changes. Engage all possible decision-makers in the process of the change. All kinds of short workshops (virtual or in-person) are helpful to create transformational goals as an outcome. In addition, the result from such a workshop should be an answer to the following questions:
- Why do we want to be Agile?
- What would be the benefit for us and our customers (or/and users) from being Agile?
- How are we going to measure the progress of our transformational goals? What metrics should we apply?
- How will the top-management team help to reach these goals? What activities will be included?
- What organizational impediments do we have? Who will be removing them?
- How do we measure value? What should be taken into account?
Agile transformation has several factors that make it successful. The most important is to realize why we need Agility. In some organizations, a transformation is run on all levels that are engaged. In others, the process has been started by teams or managers, we call it bottom-up transformation. After the first favorable outcomes, Agility is spreading to the rest of the organization. That is the most common way for companies to change. However, this approach is more difficult to proceed with when a management team and depending departments are not supportive. The ideal, perfect situation occurs when all relevant departments and all management are truly engaged and make significant improvements towards Agility.
[iii] For example, Toyota. More: Jeffrey K. Liker, The Toyota Way to Lean Leadership, 2011.