Business agility is not a new concept when it comes to agile transformation. Scaled Agile Framework (SAFe) just rolled out an updated 5.0 version with business agility in the forefront. Conference topics and entire conferences are focused on business agility.
What is Business Agility?
While agility over the past 20 years has been largely technology-focused, agility is not just an IT initiative. Why? Every company is a software company and has products that need to keep up with the ever-changing digital age and the ability to rapidly respond to those market needs. Business agility enables rapid response to emerging market conditions. This can be achieved by developing a foundation of continuous learning, and it is essential that business units – including IT, finance, compliance, marketing, security, and HR – must learn rapidly in order to outperform the market.
I attended the 2019 Business Agility Conference in Columbus, and author Mik Kersten of “Project to Product: How to Survive and Thrive in the Age of Digital Disruption with the Flow Framework” hit home by saying, “The problem is not with our organizations realizing that they need to transform; the problem is that organizations are using managerial frameworks and infrastructure models from past revolutions to manage their businesses in this one [digital revolution].”
So what do companies need to change their current managerial framework and infrastructure to meet the needs of the digital revolution? First, they must understand the benefits of business agility (from the Business Agility Report 2018):
I believe that leadership communication and transparency are the foundations to achieve business agility, closely followed by shifts in operational need that lead to all-around benefits of business agility.
Foundations of Business Agility
Leadership – Leadership is the biggest challenge to adopting business agility. First and foremost, do the leaders in the organization believe and behave with agile principles as their foundation? I always say in order to have true agile leadership they must walk-the-walk rather than talk-the-talk.
“Culture is not what’s written on the walls, but what is said in the halls.” -unknown
What does that quote mean? Organizations must have support from their leadership to have successful business agility. They must talk-the-talk and walk-the-walk. Are leaders setting the mission, vision, and direction? Do they encourage leadership at ALL levels or are they leading by example? Are they encouraging and participating in training and standing up communities of excellence to support the transformation?
Transparency & communication – Decisions made in a silo must shift in mindset [CR2] for true transformation. Do an FTE and a contractor know the core values and how the leaders commit to change? Is there a functioning Community of Practice in place with learning, communication, and value add? Are teams and mid-management set up for success by self-governance or autonomy? When decisions are made are they communicated down?
Customer value – What do the customers want? Are companies getting regular feedback from their customers and prioritizing their wants, needs, and concerns? When there is true business agility, all areas of the business are aligned with values and objectives.
Budgets – Let’s drop the annual planning idea. Again, this is an old model that does not align with the changing digital revolution. It is commonly known that organizations cannot accurately predict a budget or completion date a year out (it’s nearly impossible to predict that several months out). Shift to quarterly budgeting with a goal of funding value streams. Think of value streams in terms of do you want teams working on a certain product for a quarter, or do their efforts need to pivot because a new priority has come up? For example, is security or compliance a bigger concern now than it was 3 months prior?
Teams – Organizational design is difficult when adopting business agility in legacy organizations, and teams are affected by this greatly. Often distributed teams (not co-located) are very common and this makes it very difficult for the team to be “on the same page.” I believe this can be alleviated by cross-functional, dedicated, and co-located teams.
In order to be successful, teams need to be cross-functional. Too many times I have seen one person with all the domain knowledge and guess what…he’s looking to retire! I’m sure you work with a lot of smart people; let’s cross-train people to have transparency so that burnout does not occur. What does that mean? Dedicated teams! Not 25 percent or 50 percent allocation where team members end up committing to work they cannot complete in a sprint because they are spread too thin or have “drive-by” or “fire drill” work assigned by their supervisor.
Product management – Having a central product management function is essential to agility in the business. Give product management the authority to set the vision of the products they manage. Are product managers responsible for driving the customer's point of view? Do product owners have the autonomy to work with teams on “how” to drive the technology of their product? Leadership or the portfolio should be driving the vision, product management, the strategy, and product owners/teams drive how.
Portfolio – Transparency is key. Is the portfolio driving the strategic teams, mission, and vision of the product and technologies? Are leaders (C-level, VP, directors, mid-managers) committed to the transformation by continuously learning (taking agile classes, establishing communities of practice) and supporting their direct reports by giving them the authority to make decisions instead of quarterbacking from afar? Or are they the bottleneck on decisions because they cannot or will not make decisions that drive execution? The portfolio should focus on “what” and let the teams focus on “how.”
Let’s get the portfolio on board with driving the change from strategy to HR to finance – this excites me!
Risk of non-adoption
With business agility, there is alignment between all facets of the business – all divisions are considered part of the business. It will not happen all at once, but we can progress toward it with commitment and perseverance.
If parts of the business adopt agility and others do not, the business becomes fractured. This fracture may seem small on the surface or easily “patched up,” but over time it will splinter and create bigger havoc.
We will discuss this more in a future blog series.