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Think Agile is just for techies? Keys for business leaders
Transforming an organisation in order to create winning products and services that customers will grow to love is a constant challenge for most firms. No one wants to be a Walkman in an iPod world!
Increasingly, many of the firms we have relied on for the products and services that make our life easier are threatened by modern, tech-first companies such as Amazon or Uber. These firms act fast, innovate often and build breakthrough products and services which are easy to use and open-up new possibilities for customers. As of 2018, despite attracting high quality talent from the same pool and having similar levels of ‘know-how’ as traditional players, the output of most tech-first firms radically eclipses that of ‘traditional players’ [1]. For example, firms like Amazon and Spotify are able to deploy code in a matter of seconds and push out millions of software releases every year, compared to as few as hundreds of releases for most traditional organisations.
So, what are these high performing firms doing differently and what can we learn from their operational ‘black boxes’?
In our experience, tech-first organisations have perfected the art of getting things done – they don’t really think about it anymore, it’s part of what they exist to do, it just happens! They get better things done, faster; resulting in higher quality products in consumers’ hands more often. Some people refer to this as an Agile way of working.
Of course, Agile is nothing new. It stemmed from the technology world intended for software development teams, enabling firms like Amazon and Google to relentlessly engineer superior software quickly to provide high-quality solutions. But for us, the holy grail of Agile is when other parts of the business understand the role they must play to embed ‘Agile mind-set’ across the entire organisation system.
Agile Mind-set in a nutshell
Creating an Agile mind-set is about a shift in behaviour and habits of individuals and teams. This means organising work in a different way and simplifying how teams work together. But embedding this way of working in firms is difficult. It takes time. And it requires a fundamental change in key aspects of how a business is organised and operates.
Implications for the organisation
There are several Agile characteristics that underpin a shift to this way of working. Based on analysis performed by Sia Partners Transformation & Change practice, we concluded there are four key characteristics at the heart of what’s required. But, most importantly, as a business leader at the start of this journey, where should you focus your attention and what are the biggest levers you need to pull for each characteristic?
Characteristic 1: Empower teams to be accountable for shared customer-centric outcomes
Build teams around a common vision and shared customer-centric performance measures, regardless of the team’s function or reporting line.
Example: Airbnb has not always been a successful business, famously having to resort to selling customer designed cereal boxes during the 2008 Obama-McCain election! However, following backing from the accelerator fund Y-Combinator later that year, the three Airbnb founders transformed their company into an industry-leading disruptor that continues to provide great customer service today. This was achieved by focusing on product development and associated customer experience performance metrics. This focus extended to team and employee rewards, which were aligned with the desire to delight customers no matter what and a commitment to make customers’ lives easier.
Getting started: Identify a product or service development process with the greatest improvement opportunity for customers. Educate employees on the advantages of ‘Agile’ and what this means practically for how the team needs to be organised and work. Integrate any disparate team members into a single multi-functional project team giving the team autonomy to make decisions and involving customers in the requirements, development and test phases of the project.
Characteristic 2: Build co-located teams with daily stand-ups and regular customer interaction to improve the quality of what is delivered
Awareness of what each team member is working on, as well as bringing the customer into the room, makes it easier to effectively prioritise work against what really matters to the customer. This also ensures blockers are removed early before they escalate and impact team performance.
Example: Saab’s aeronautics business has more than 100 Agile teams operating on its Gripen fighter jet. It coordinates delivery through daily team stand-ups. Stand-ups are 15-minute team meetings, typically at the beginning of the day, and always standing up! At 7:30 am, each frontline Agile team has a 15-minute stand up to discuss blockers (issues preventing the project going forward). Some of these blockers cannot be resolved by one team alone. So, at 7:45am, blockers requiring further coordination are escalated to a team-of-teams (a stand-up attended by one member from a related team’s 7.30am stand-up). During each team-of-teams stand up, issues are either addressed or escalated further to a subsequent team-of-teams. This approach continues until 8:45 am when the Executive Action Team has a final list of critical issues to resolve to ensure delivery remains on track. As a result, they have produced the world’s most cost-effective military aircraft.
Getting started: Assign accountability of the Voice of the Customer (VoC) to an owner. Re-organise when and how the multi-disciplined project team communicates what they’re working on. This will make the team better prepared to respond quickly to inevitable changes; issues can be resolved faster and effort spent on delivering something valuable to the customer.
Characteristic 3: Team work in time-boxed sprints to deliver something useful, regularly
Breaking down delivery into shorter time frames ensures teams remain focused on priorities that deliver the most value to customers, as well as allowing for changes in the over-arching approach. This results in greater value to customers more often.
Example: Tesla has let go of annual release cycles, instead responding to customer feedback in real-time. By not having fixed plans and working iteratively, Tesla is now forcing the automotive industry to change fast.
Getting started: Break down large, complex solutions into small batches, reducing the time between requirements gathering, development and testing. Commit the project team to short-term product goals aligned with customer priorities and focused on releasing smaller solutions early and often. A key point for this approach is for the team to always assess the effort to build versus the expected benefit delivered.
Characteristic 4: Test everything often and quickly so that enhancements are more aligned to customer needs
By getting a product into the hands of a customer early, you can learn and adjust your approach to ensure you continuously maximise customer value.
Example: Coca-Cola released ‘New Coke’ in 1985 to compete with Pepsi; however, only 13% of customers liked the new Coke. Coca-Cola learned from their mistake quickly and responded to customer feedback by reintroducing their original formula in less than three months. Now, Coca-Cola takes a test and learn approach to product launches.
Getting started: Re-engineer tests for particular products so they’re seamlessly integrated with development processes to expose defects early. Early identification of defects means they can be fixed right away before moving on to the next product iteration, reducing the cost of production and producing higher quality product.
Sia Partners have found that looking in detail at key aspects of each characteristic will play an important role in helping firms better respond to and thrive in a customer-first, iterate-often, fail-fast Agile environment. Over the next few months, through a series of blogs, we’ll be taking a closer look at each of these areas and the implications for your operating model in an Agile world – organisational structure, process, governance, tech and people. Tackling one well is not enough; a fundamental shift needs to take place across all aspects of the operating model for an agile approach to really become the way you get things done.
Sources
[1] The Agile Organisation: Build an Engaged, Innovative and Resilient Business – Linda Holbeche