The topic of agile transformation is emerging, either driven “bottom-up” from product leaders or “top-down” by C-level executives. Being primarily transformation of the business, it is a response to digital strategy, thus connected with a wide range of topics – including Data Governance and Enterprise Architecture.
I will summarize the results of such a transformation based on the experience of three very different companies – major representatives of their industry – which were among the first in the local market that stepped into the path toward enterprise agility. Directly leading new governance implementation as a business architect, responsible for structuring changes and developing the target model of the organizations, I came to very pragmatic and not-quite-expected conclusions, which I will briefly share in this post.
Imagine the seasoned executives of a large company concerned about heightened shareholder expectations, increased competition, the reallocation of revenue to digital channels, and the challenges that come with that. As always, they’re looking for ways to increase productivity, strengthen brand presence on the market, and simply become less fragile in the turbulent environment. Business bestsellers were read, many hours of consulting were received, and the decision was made to follow the current trend and begin (or accelerate) the transformation toward agility. Someone says it’s time to call the “Big 3” consultants, but they usually replicate models they already know and leave the company alone afterward.
The First Thing to Start With …
Is a clear understanding of business goals to justify this transformation: Usually it ends up with the platform business model on three pillars of customer centricity, ecosystem growth, and actual agility (see the illustration below). In this strategic stage, we answer several key questions:
- Where do we want to be in the future market with the right business model to keep the growth?
- What might be our business capabilities to deserve that place in the market?
- How should we structure our corporate assets and long-term investments for those purposes?
Thus, joining together marketing, architecture, and corporate visions provides a structured growth strategy.
It Turns Out the Next Observation …
That agility being an important component of a large company transformation – contrary to stereotypes, though it follows the spirit of the Agile Manifesto – has little to do with common presumptions about co-called “agile methodology.”
The flexibility of a mature organization does not start with people allocation to products and even less with certain ceremonies, but first of all with the investment culture and strategies, followed by product organization structure based on target business architecture. Officially, the scaled agile framework (SAFe) will tell you much about a portfolio of “agile release trains,” but it won’t tell how to define a structured set of “strategic themes” and “operational value streams” for the exact enterprise. Meanwhile, this becomes the mandatory part (among others) of proper digital (and other) investments.
The first step for agility is an ability to delegate investment decisions, rethinking project portfolio management in favor of decentralized budgets and continuous economical measurements. It is linked with an ability to cascade strategic goals, set KPIs or OKRs, and combine top-down and bottom-up approaches. Challenges faced by usually conservative CFO teams are remarkable, as they need to democratize the financial and economic rationale and the subsequent evaluation of business initiatives.
The second step involves the conditions for employee engagement and motivation, specifically to value team achievements above personal ones and grow entrepreneurship behaviors, meanwhile maintaining operational productivity. Larman’s law says that in large established orgs culture follows structure. So, there is no way to change the culture unless business architecture with organizational governance is revised.
And this brings us to the elaboration of enterprise architecture on all levels, starting with the key value streams, leading to a targeted organizational structure with a corresponding redistribution of authority and budgets, combined with a reform of collegial management at the strategic level.
Finally, all of the above must be put into action regardless of politics and conservatism, creating a safe environment for employees to transition.
And Only in the Next Stage …
We come to building the agile teams themselves: We focus on the teams’ launch and interactions, following the recommendations of SAFe or LeSS, or creating their derivatives, as many do. Of course, something can be done in parallel, but without the fundamentals described above, the whole transformation risks losing meaning and turning into a toy to attract young talents.
Conclusion
Using a structured growth strategy for agile transformation, we can transform our enterprise(s) from the original working state to the target better-working state, preserving operational efficiency and stability during the whole long trip to future relevance and success.