The Agile Organisation - Bevington Group · As discussed, broadly speaking, four types of Agile are...

www.bevingtongroup.comBusiness Model Design • Process Improvement • Change Management

Australia and NZ patents, US and Canadian Patents pending

Presented by: Roger Perry, Managing Director, Bevington Group

The Agile Organisation

The What, the Why, the How

US, Australia and NZ patents apply to XeP3, Canadian patents pending© Copyright Bevington Group. All rights reserved.

What is the Agile Organisation?

The Basics


There are, broadly speaking, four types of “Agile” in serious play

❑ Technology related Agile projects

❑ Non-technology Agile projects

❑ Scaled Agile in various forms

▪ Major programs

▪ Full organisational transformations

❑ Agile as BAU – a new way to structure and operate your enterprises (effectively a new form of operating model)

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Project-related Agile


Each of the Agile forms shares characteristics devolved from Agile technology related projects

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There are 12 guiding agile principles to support teams in adopting this approach:

1. Satisfy the customer

▪ Focus on the value – eliminate the waste

2. Welcome changes

3. Deliver frequently

4. Collaborate daily

5. Motivate individuals

6. Communicate face-to-face

7. Measure

8. Deploy sustainably (test and learn)

9. Use Minimum Viable Product (MVP

Plan-Do-Study-Act (PDSA)

10. Simplicity is essential

11. Self-organising teams

12. Reflect and adjust


You could summarise the Agile approach as commonly having six attributes

❑ Cross-functional teams

❑ Co-location

❑ Rapid iterations

❑ Working experiments before documentation

❑ Fixed timelines for given cycles

❑ Embedded self-management

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Agile methods are now regularly applied to all manner for project types

Agile for IT (software

development)

Agile for Process Improvement

Agile for Implementation

Agile for Workspace Agile for Strategy Agile for Scenario

Agile for Policy Agile for Product Agile for Learning

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Agile is attractive for a variety of reasons

❑ Speed: by bringing critical team members together solutions evolve more rapidly

❑ Decision making: the decision making model is simplified in Agile, so that the decision maker/s interacts directly with the team, and make decisions within the Agile sprint timeframe

❑ Creativity: Bringing different perspectives into the room can lead to a much richer solution set

❑ Shared understanding: where cross-functional teams share the same understanding of the problem and the potential solution then implementation tends to go more smoothly

❑ Risk reduction: as well as the reduced implementation risk (from shared understanding) there risks of design flaws are reduced because the solution can be tested with critical players in the room

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How Agile is being taken into BAU

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Agile Way of working in Squads, Chapters and Tribes


More on Agile

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As discussed, broadly speaking, four types of “Agile” are in serious play

❑ Technology related Agile projects

❑ Non-technology Agile projects

❑ Scaled Agile in various forms▪ Major programs

▪ Full organisational transformations

❑ Agile as BAU – a new way to structure and operate your enterprises (effectively a new form of operating model)

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Project-related Agile


One form of Scaled Agile is the application to turn-arounds*

❑ There is a “flawed” assumption that crises require tight command-and-control from the top

❑ However, HBR has reported that command-and-control systems work best when operations are stable and predictable, commanders have greater knowledge potential solutions, centralised decision makers handle peak decision volumes, and sticking to standard operating procedures is more important than adapting to change

❑ This is not the context for natural disasters, turn-arounds and not even the context for many contemporary business problems. In such rapidly changing contexts “central command” could easily become a bottleneck or become paralysed by information overload

❑ So, unsurprisingly, natural disaster teams are increasingly turning to agile team structures and methods to make a difference

❑ Turnaround deployment of agile teams is now also becoming more prevalent

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* https://hbr.org/2018/07/how-agile-teams-can-help-turnarounds-succeed


Australia has its own examples of this type of agile organisational application

❑ WorleyParsons, a global engineering and construction firm that specialises in oilfield and other energy-related projects

❑ In 2015 demand for WorleyParsons’ services crashed

❑ After several rounds of cost-cutting proved insufficient to stabilise the organisation, hundreds of individual projects were established

❑ Most of these teams operated in an agile manner with work structured in sprints, discipline in decision making, backlogs, daily huddles and other tools

❑ Senior leaders helped clear away obstacles and tracked the teams’ results

❑ In the first 100 days, the firm increased its cash position by 20%, reduced its net debt, and registered a $120 million gain in anticipated profitability. After just one year, margins had increased by five percentage points, cost savings totalled $400 million (on an addressable cost base of $1.2 billion), and the stock price was up more than fourfold

❑ This is an example of leaders enabling the change that needs to happen rather than defining every solution

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But, returning to Agile as BAU (business-as-usual)

❑ Traditional organisational structures

▪ Pivot on different characteristics (e.g. function, geography, product, customer type etc) but nonetheless tend to use silos

▪ Silos tend to be hierarchical in terms of authority levels

▪ Most powerful governance bodies tend to sit at the top of hierarchy

▪ Budgets tend to be organised by silo (department, division) or by project

▪ Theoretically silo personnel can work together on a project

❑ Agile structures

▪ A network of teams

▪ Teams tend to be called squads

▪ Squads are organised into tribes

▪ Squads have specific objectives

▪ Tribes consist of squads with related objectives

▪ Functionals skills are addressed through chapters

▪ Leadership provides a “mission” and integration function

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▪ A Business Operating Model is the combination of roles, skills, structures, processes, assets and technologies that allow any organisation to deliver on its service or product promises

▪ It is in effect the way the business is set up to deliver VALUE (both in terms of the customer and in terms of the business)

▪ The aspirational view of how the business is to be set up to deliver against future or changing markets, environment and technology demands is sometimes called the Target Operating Model

What is a Business Operating Model?

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BAU Agile can touch all elements of an operating model


People often think of structure first with an operating model – yet agile structures are often slippery to grasp

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Agile structures are unlike traditional hierarchical structures

They need other parts of the operating model (such as technology, culture, and process) to work well


Often the Agile organisation’s inspiration has been Spotify….

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Yet, agile is not just structure! Spotify often quotes a range of other aspects

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Intense customer focus

Enabled by technology

Experimental mindset

Entrepreneurial values

Collaborative culture

Strong sense of mission

Deep pools of talent

Low levels of bureaucracy


Why are organisations considering agile alternatives?

❑ The context is often reported to be different, with rapid changes in▪ Competition

▪ Demand

▪ Customer expectations

▪ Technology

▪ Regulation

❑ Predictability is a challenge

❑ The ‘war for talent’ is just as intense as ever

❑ So, organisations are seeking ways to ▪ Respond to context changes faster

▪ Respond more effectively

▪ Identify emerging trends before the competition

▪ Improve customer service and intimacy

▪ Improve staff engagement18


There is a link between Agile and other emerging practices

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Agile

Design Thinking

Human Centred Design

Collaborative technologies

Iterative Experimentation

Minimal Viable Product

Customer centricity and

Customer Journey Maps


Whilst digital enterprises are the early adopters, there are emerging benefits for established enterprises

Features

of AgileCreativity

Bringing different perspectives into the room can lead to a much richer

solution setMomentum building

The swift pace of Agile sprints and implementation helps build

momentum to drive broader change

Risk reductionReduced implementation risk (from shared understanding) and the risks of design flaws

are reduced because the solution can be tested with critical players in the room

SpeedBrings critical team members together so that solutions evolve more rapidly

Decision makingSimplified decision making with business

owners interacting directly with the team, and decisions made within the Sprint timeframe

Scalable upskillingAs sprint cycles continue it is easy to

engage and upskill more staff

Shared understandingCross-functional teams share the same understanding of the problem and the

potential solution - implementation tends to go more smoothly

FunThere is a sense of satisfaction from

working together towards achieving the same goal and seeing regular results

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These benefits can be observed in more traditional metrics*

❑ What if a company could achieve positive returns with 50% more of its new-product introductions?

❑ What if marketing programs could generate 40% more customer enquiries?

❑ What if human resources could recruit 60% more of its highest-priority targets?

❑ What if twice as many workers were emotionally engaged in their jobs?

❑ These are the sorts of benefits sought by Ericsson

❑ Ericsson has over 100 small teams working with its customers’ needs in three-week cycles. The result is faster development that is more relevant to the specific needs of the customers. The client gets value sooner. Ericsson has less work in progress. And Ericsson is deploying one to two years earlier than it otherwise would, so that its revenue comes in one to two years earlier.

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* https://www.forbes.com/sites/stevedenning/2016/11/26/can-big-organizations-be-agile


However, to successfully deploy, organisations need to be aware of the irrefutable disciplines that go with the Agile approach

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Satisfy the customer Focus on value & eliminate waste

Empower Self Organising Teams

Communicate Face to Face

Motivate Individuals

Deliver Frequently

Deploy Sustainably (Test & Learn)

Measure

Maintain Simplicity

Welcome Changes

Adjust and Reflect

1. 2. 3.

7. 6. 5. 8.

10. 9. 11. 12.

Collaborate Daily

4.

Use Minimal Viable Product (MVP) / Plan-Do-Study-Act (PDSA)


Organisations tend to start in customer relevant and ‘internal customer’ spaces

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Activities with early or deep customer impact: Activities with major ‘internal customer’ impact:

Innovation Customer Experience

Servicing(selective)

Strategy Development

Sales

Product development and

management

Some operations (special case)

Human Resources

Technology


The roadblocks to any type of agile deployment are similar

❑ In 2015 a large enterprise attempted to deploy agile to accelerate product deployment

❑ The organisation was suffering from

▪ Slow processes

▪ Cumbersome decision making

▪ Late product deployment

▪ Staff dis-engagement

❑ The cross-functional approach showed early promise

▪ Engaged staff

▪ Creative options

▪ Experimentation

▪ Rapid deliverable production

❑ Yet the whole exercise collapsed when

▪ Other (non-agile) teams insisted on “applying governance”

▪ Leaders did not understand the different “decision making model”

▪ Budget was withdrawn in the new-financial year because of regulatory demands

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