How are you enabling agility in your organization?
What we learned at the Manage Agile Conference
11 minute read
Image by Headway – Unsplash
by AI Insider team
Back in late November, AI Insider gave a presentation at Manage Agile 2020, one of the largest annual conferences for the agile scene in German-speaking countries. The event focused on agile leadership and agile project management approaches.
One important thread that stood out among the conference’s themes was Competitive advantage through agility. Our participation in the event included a presentation on the theme “Why you should enable agility within your organization, be it in IT or not”, held by Marius Podea, sharing knowledge and practice with the Agile Leadership community. That’s not unusual at AI Insider, but what made the presentation remarkable is that the topic didn’t focus on the software development industry – it looked beyond it.
“When it comes to competitive advantage, agility has never mattered more. But for most leaders, the challenge to make it a source of competitive advantage has been both a barrier and an opportunity. Markets demand that organizations adopt and change continuously. But while agility may be demanded from the outside, it is driven from the inside.”, says Marius Podea.
Over the last years, being and
working agile have enabled successful software development projects. It improved product quality, delivery, and speed to market. At the same time, the motivation and productivity of the IT teams and customer satisfaction increased.
More recently, agile practices have been expanding to various industries, functional areas, and senior leaders. But how do leaders understand the agile mindset and its methods, nurture it for their teams, and benefit from it? As leaders from different industries, how are you enabling agility in your organization?
Here are 3 insights based on what we shared at the conference:
1. It’s time to make more sense of agile practices in industries other than IT.
Agility leads to better performance and provides organizations with robust advantages over the competition.
What if agile companies grow revenue 37% faster and generate 30% higher profits than non-agile companies? What if high-agility companies deliver 29% more of their projects on time, 28% more of their projects in the agreed budget, 24% more of their projects achieving what they were supposed to do, and 31% more of their projects exceeding ROI?
From more projects delivered on time to more projects exceeding ROI, from more motivated teams to improved customer satisfaction, from growing the revenue faster to generating higher profits, non-IT companies prove how being and working agile matter.
According to the extensive study, “Pulse of the Profession: Organizational Agility” that PMI developed in 2012, on more than 1,000 project, program, and portfolio managers, the expansion of agile to various industries has already confirmed at least four advantages for organizations. “The average percentage of projects completed on time, on budget, achieving business objectives, and forecasted ROI is significantly greater in organizations reporting high agility than those reporting low agility.” (PMI, 2012)
The project success metrics by level of agility (Source: PMI, 2012)
Also, the PMI study revealed that organizational agility translates into a faster response to market changes, improved efficiency, employee and customer satisfaction, risk mitigation, cost savings, and more profitable business results.
The benefits of increased agility within the organizations (Source: PMI, 2012)
“The PMI study shows us that the possibilities and opportunities that agile raises with its expansion in other industries are substantial. These are compelling outcomes that high-agility companies achieve a consistent competitive advantage compared with low-agility companies.”, states Marius Podea.
2. Teams in industries different from IT can transition naturally to agility with no experience or awareness of it.
What if their practices emerge deliberately to agile? How will it reflect on their competitiveness?
Driven by “can agile project management be adopted by industries other than software development?”, a group of researchers (Conforto E. et al. (2014), findings published by
PMI) analyzed 19 medium and large-sized companies from eight well-established industries such as Automotive, Energy, Consumer Goods, Electronics, Telecommunications, and Engineering, which used a traditional management approach.
The researchers surveyed the product development and R&D managers, analysts, and executives, who had experience in new product development and did not formally use agile, to identify if they managed projects using agile. The researchers based their analysis on two key elements: practices and enablers, the predictors for the agile approach.
Formally, in the development of innovative projects, teams use traditional project management methods. Practically, their way of working is consistent with the agile approach.
On the practices side, the study revealed that:
63%
of the surveyed companies developed project planning at a macro level and by iteration (compared to 37% that approached the project planning in a traditional, detailed manner)
63%
of the surveyed companies updated the project plan monthly and weekly (compared to 37% that updated project planning in a traditional way, at the end of each phase)
53%
of the surveyed companies described the project scope with a minimal textual description, revised on the go (compared to 47% that used detailed project scope)
47%
of the surveyed companies shared the responsibility to create the project plan (compared to 5% where the PMO created it, and closed to the companies where the PM created it)
The practices and the methods used in other companies than IT (Source: Conforto E. et al., 2014)
Out of six practices evaluated, four referred to an intermediate or an agile way of working. “Even if, formally, the leadership did not put in place an agile methodology, nor was aware of it, the teams transitioned naturally to agility.”, adds Marius Podea. “As the findings show, we can understand these results as a sign that some companies are moving towards agile management or a blend of agile and traditional management practices.”
Performing innovative projects with less formalized processes and empowering the teams with a degree of autonomy to make decisions are just two pieces of evidence of favorable conditions for the agile approach.
Furthermore, on the enablers side, the study found that:
79%
of the surveyed companies had project team members with 2-3 years of experience (compared to 21% that had teams with less than 2 years of experience)
68%
of the surveyed companies had PMs with 2+ years of project management experience (compared to 32% that had PMs with less than 2 years of experience)
84%
of the surveyed companies had their team size under 12 people (compared to 16% that had the team size over 12 people)
90%
of the surveyed companies had their teams co-located
95%
of the surveyed companies involved the customer in their project planning (compared to 5% that did not involve the customer)
84%
of the surveyed companies showed an organizational structure type useful for agile
63%
of the surveyed companies used a partially standardize product development process (compared to 37% that used a process that was fully standardized)
79%
of the surveyed companies had multidisciplinary teams (compared to 21% that had not multifunctional teams)
The enablers of the agile way of working in other companies than IT (Source: Conforto E. et al., 2014)
Out of ten enablers evaluated, eight referred to an intermediate or an agile way of working. “Once again, this time from the enablers viewpoint, the analyzed companies, regardless of their industry, seem to transition to agility.”, says Marius Podea. “When team members have 2-3 years of experience, they can self-organize as a team and choose the best working solution, hence reducing the number of product iterations and waste. Customer involvement enables the team to build the product with the customer’s vision and their users’ needs in mind, thus bringing the most valuable products and features to market faster while increasing customer satisfaction. A project-oriented organizational design empowers the PM and the team to self-organize and make decisions. A cross-functional team gives the team access to the needed resources to figure out the right solutions while avoiding bottlenecks. These are competitive advantages for agile companies.”, adds Marius Podea.
Usually, teams adapt their way of working to their contexts and challenges. It is how the companies from the research applied – without being aware of it – the agile practices in their well-established industries, where the waterfall was the standard approach. While some challenges still exist, companies from industries other than IT can adopt agile and create attractive possibilities. What if their practices emerge deliberately to agile? How will it reflect on their competitiveness?
3. Adopting agile goes beyond the teams’ way of working. It is a process of transforming leadership.
“I want this to be changed now; we are agile, right?” “I want to change this, but keep the deadline; we are agile, right?”
The advantages of agility and the real transition of teams to the agile way of working are encouraging. And they would be even more valuable if every potential challenge transforms into support.
When some leaders share what they know about agile, they speak about speed, sprint, backlog, releases, velocity, and so on, and believe these automatically translate into organizational agility. But because awareness and experience lack, it becomes challenging for them to understand the real approach. And by lacking the knowledge, it’s easy for them to confuse providing information with imposing decisions.
That is the case of leaders that communicate continuous changes in functionalities while keeping the urgent deadlines. While some aspects are valuable for the team’s effectiveness and the project success, adding new layers of changes by imposing decisions, even with the best intention behind them, misses the agile practices, and fails to benefit from what agile delivers. One example is imposing the implementation of new, superficial, incomplete, partially developed/tested, or last-moment functionalities, which are not embedded into the product but delivered just for the satisfaction of one customer.
The more decisions are imposed, the more likely the product to become functionally unstable. Usually, this is the moment when the team starts cutting corners.
The cargo cult agile and the top down approach in decision-making affect the teams’ effectiveness and the project success
“Cutting corners as a response to the top-down approach in decision-making doesn’t work in the long run. The quality of the product starts decreasing, teams lose their motivation, customer satisfaction decreases, and there is a lack in delivery.” says Marius Podea. “It reveals a cargo cult agile, where the right things are said or done, but the core values are not understood.” adds Marius. “Teams should be empowered to work how they best see fit. Agreeing on a timeline is essential. Then, the teams work on and decide the best way to implement the project and to integrate the changes. Build projects around motivated individuals. With the right environment and support, trust them, they will get the job done.”
Empowering the teams supports the teams’ effectiveness and the project success
“Adopting agile goes beyond the teams’ way of working. Agile is more than concepts and ceremonies. It is about culture, a part of the organization’s being. That is why it comes with a blend of organizational and leadership transformation.”, closed Marius Podea.
Enabling agility in the organization: Wrapping it up and looking towards the future
Agile has transformed the software development industry. Now it transforms other industries.
Organizations benefit from agility in terms of better performance and competitive advantages – from successful project delivery to overall organizational efficiency, profitable business results, and response to market changes.
Then, regardless of their experience or awareness of agile, their teams can transition to agility and, therefore, organizations gain advantages over their competition. In this transition, they count on a blend of practices and enablers.
Lastly, agile makes its way to the senior leadership, and it’s transforming it as well.
So, at this point, we have factual evidence that agile can work outside the IT industry. Still, a challenge stays with us – the behavior of the people who need agile understanding. And balancing factual evidence with empathy, we all can help to head it in the right direction.
Those leaders and teams who learn to enable organizational agility in their industries and business activities will move their business forward.
There are a few practices that teams and leaders can do together to support continuous improvement:
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Raise your level of agile understanding and learn how agile works.
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Learn where the agile approach fits the needs and where other approaches fit better.
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Similar to new technology adoption, start small. Start with a pilot, learn, adapt, then expand it gradually.
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Enable your teams to approach their practices flexibly while keeping in mind customer collaboration, team motivation, a working solution, and responding to change (based on agile values).
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Embrace agile practices within the leadership teams. It creates the context to understand and learn about agile while building the bridge between you and the teams you are empowering.
Tell us more about your experience with enabling agility in your organization.
How do you make more sense of agile practices in your industry to lead to better performance? Is your team transitioning naturally to agility, or is your practice emerging deliberately to agile? How do agile teams collaborate with leadership in your organization?
If you consider starting to enable agility in your organization, how could you enable it? If you have already started, what do you recommend to your peers?
We hope this article has helped you get the knowledge and insights into connecting organizational agility with a competitive advantage. If you’re looking to dive deeper into the matter, look no further. You’re welcome to
get in touch with us and take the conversation forward.
