A Comprehensive Guide to Understanding
the Process, Benefits, and Challenges
What Is Agile Transformation?
Agile transformation is the process of shifting a company's operation and management style from a rigid hierarchy to a flexible, collaborative, and customer-focused approach. The primary objective of an agile transformation is to enable an organization to respond more effectively to changing customer needs, market conditions, and technology advances. Done right, agile organizations earn more revenue from happier customers, reduce costs by doing only what adds value, and are ultimately more profitable than their rigid competitors.
The term "agile" was first used in the software development industry as a way to describe flexible ways of building software to better satisfy customer needs. It boils down to a set of values and principles that help teams to develop and deliver high-quality software in a more flexible, efficient and effective manner. Many frameworks were created before and after the term “agile” was first coined including Scrum, Kanban, Extreme Programming (XP), and many others. Over time, the concept of "agile" has been extended to other domains and industries, including but not limited to finance, legal, education, sales, and business management.
Traditionally, software development engineering efforts followed a Waterfall approach, like its construction management friends, where all requirements were defined up front and work was completed in a linear, sequential fashion. This makes sense when building a bridge, since few things change while doing so, and changes can be very hard to incorporate after a bridge building effort is already underway. Agile development, on the other hand, embraces change and allows for a more flexible approach to the development of technology solutions. This means that the customer can change their mind, and requirements can be modified throughout the project lifecycle with ease and at a lower cost, resulting in a better end product and happier customer.
Time savings due to increased focus on goals
Increased development speed due to advanced quality practices
Budget saved by focusing on solutions, not features
The benefits of an agile transformation are numerous and can have a significant impact on the performance and competitiveness of a company. Some of the most notable benefits of an agile transformation include increased speed and agility, improved customer satisfaction, enhanced employee engagement and morale, increased collaboration and teamwork, and reduced costs and risk.
We're here to provide a comprehensive overview of agile transformation by:
- defining and differentiating it form other types of transformation
- describing its benefits to the organziation and its customers
- exploring success factors, common pitfalls, and transformation models
- examining examples of Agile Transformation across four diverse industries
We will also look at some examples of successful agile transformations across different industries and share insights and best practices on how to make the transition to an agile operating model.
Agile Delivery vs Project Management
Overall, Agile delivery offers a more collaborative, flexible, results-focused, and empowered approach to product development than traditional project management methods. Agile delivery is different from traditional project management in several key ways:
- Adaptability: Agile delivery is flexible and adaptive, allowing teams to respond to changes in requirements and customer needs rapidly. Traditional project management is often predictive, rigid and prescriptive, making it difficult to adapt to changes in the project environment.
- Focus on Results: In traditional project management, the focus is often on completing tasks and meeting deadlines assuming what is being done is always the most valuable thing, while in Agile delivery, the focus is on delivering results that meet customer needs with a much stronger focus on value with less attachment to the tactical work done to achieve it.
- Visibility: Agile delivery provides increased visibility into the project and its progress, allowing teams to identify and address issues more quickly. In traditional project management, progress is often tracked using infrequent status reports which at best are an educated guess around true progress using proxy metrics such as earned value or percent complete. In complex work where there is a high degree of uncertainty, 50% spent budget is not equal to being half-way done.
- Collaboration: In traditional project management, the project manager is accountable for delivery, timelines, budget and the overall success of the project, while in the popular Agile delivery framework called Scrum, self-managing teams are accountable for the same and thus collaborate and make decisions together. This form of management helps to create more transparency, find problems sooner, mitigate risks faster, and deliver usable solutions sooner.
- Empowerment: Agile delivery empowers teams to take ownership of their work and make decisions about how best to complete their tasks in order to find problems sooner and deliver value faster. In traditional project management, teams are often told what to do and how to do it. If what is asked of them is not the best thing to do, the customer suffers as a result.
What Agile Transformation is Not
Digital Transformation vs Agile Transformation
Agile Transformation and Digital Transformation are two distinct but related concepts that are often used in the context of organizational change. While they share some common goals, they focus on different aspects of organizational change and require different approaches to achieve success.
Agile Transformation is an ongoing process. It refers to the evolution of an organization that embodies the values, principles found in the Agile Manifesto as well as delivery practices that improve its ability to deliver value to its customers and stakeholders. The goal of Agile Transformation is to create a culture of continuous improvement, collaboration, and customer focus, where teams can respond quickly to changes in the market and customer needs. Risks are mitigated quickly, value is delivered rapidly. Distilled, the goal of an agile transformation is to take a slow moving, rigid organization that struggles with change, to a hyper-flexible, adaptable, and value focused state, so that it can be much more competitive in the marketplace.
Digital Transformation, on the other hand, refers to the integration of digital technology into all areas of an organization, enabling it to operate more efficiently and effectively with a lot less paper-driven and labor intensive manual processes. The goal of Digital Transformation is to create a digital enterprise that is capable of leveraging technology to drive business growth and innovation. Digital Transformation requires a holistic approach that involves not only technology but also organizational structures, processes, and culture.
While Agile Transformation and Digital Transformation share some common goals in reducing waste and improving outcomes, they focus on different aspects of organizational change and require different approaches to achieve success. Agile Transformation focuses on improving the organization's ability to deliver value to its customers and stakeholders while responding quickly to change, while Digital Transformation focuses on integrating digital technology into all areas of the organization to drive business growth and innovation and reduce costs.
Agile Adoption vs Agile Transformation
Agile Transformation refers to a comprehensive change in an organization's culture, values, processes, and practices with a goal of improving the speed to adapt to changing business needs. It is a strategic and holistic approach that aims to transform the way the organization operates and delivers value to customers. Agile Transformation usually involves a change in how an organization is led, a reevaluation and sometimes shift in organizational structure, and the implementation of new processes and practices. The goal of Agile Transformation is to create a nimble, and lean organization no matter the size of the company. These changes often impact all aspects of the organization. Done right and this new organization is completely different. This approach can take time and be costly, but the ROI can be virtually unlimited.
On the other hand, Agile Adoption refers to the implementation of Agile practices in specific projects or departments within an organization. Sometimes it's done piecemeal. It’s often a tactical way to start and sometimes introduced to a particular project team or department in isolation. Sometimes it’s one team doing Scrum in a waterfall organization. Or maybe a Daily Scrum added to an existing waterfall project. Agile Adoption is focused on the immediate adoption of Agile practices, rather than a comprehensive change in the organization's culture, values, and processes. The goal of Agile Adoption is to deliver better results for a particular project or department. But without a strategic approach its results are often quite limited.
As you can see there are vital differences between Agile Adoption and Agile Transformation. Agile Transformation is a comprehensive and strategic change in an organization, while Agile Adoption is the tactical implementation of Agile practices in specific projects or departments without a holistic view.
Agile Transition vs Agile Transformation
The difference between an Agile Transition and Agile Transformation lies in their scope and focus.
Agile Transition refers to the process of moving from one way of working, such as a traditional project management approach, to an Agile approach. It is about adopting Agile frameworks, practices, and principles to achieve specific goals and objectives.
On the other hand, Agile Transformation includes a transition and goes beyond just adopting Agile practices and methodologies. It is about fundamentally changing the way the organization operates and delivers value. It is a holistic approach that involves the entire organization, from leadership to delivery teams, in a cultural and behavioral change towards being a hyper-nimble, competitive and profitable organization.
Therefore, an Agile Transition can be considered a subset of Agile Transformation, as it is a step towards a complete organizational transformation. The focus of an Agile Transition is to slowly adopt Agile practices and frameworks to improve specific processes or projects, whereas the focus of Agile Transformation is to create a culture of continuous improvement and to embed Agile values and principles into the organization to improve actual business performance.
The Benefits of Agile Transformation
There are several benefits to agile transformation. Some of the most significant benefits include:
Change is the only constant. Agile frameworks and delivery methods allow organizations to adapt quickly to changing circumstances in the economy, business environment, technology, etc, which is becoming increasingly important in today's fast-paced business environment.
Higher Customer Satisfaction
By delivering working new solutions or value more frequently, the customer is able to see real progress and provide valuable feedback. This leads to a better end product that more accurately meets the customer's needs.
With a constant focus on delivery of value, quality, and waste reduction, agile delivery techniques reduce risks far sooner including those of timeline overruns, quality problems, scope creep, budget overruns, and many others.
Decreased Time to Market
Agile organizations are able to develop smaller, incremental solutions and bring them to market much earlier than their competitors. This leads to better alignment with market forces, quicker validation of direction, and often increased market share.
Agile development leads to a more efficient use of resources and time, as well as better project planning and management of change. This means that projects are often completed more in-line with customer goals with more transparency and less waste. If a strict focus on priority and value is maintained, an agile organization may often release sooner by avoiding all work unnecessary for immediate benefit.
Agile delivery encourages collaboration between customers and teams, which leads to better communication overall, better alignment on goals, and more effective problem solving.
Improved Employee morale
Good employees are hard to find and hard to keep. Baked into agile delivery methods are ways to empower employees and give them more autonomy to solve problems in the context of business goals, which leads to increased job satisfaction, higher morale, and better solutions.
Empowered employees drive growth, innovation, and customer satisfaction. When employees have the autonomy and resources they need to make decisions and solve problems they take ownership of their work and results. Empowerment can also lead to improved productivity, increased job satisfaction, and lower turnover rates. Empowered employees are also more likely to provide better customer service and are more invested in the success of the company. As a result, businesses that empower their employees often see increased revenue, market share, and brand recognition. Additionally, empowered employees can bring new ideas and perspectives to the table, which can lead to innovation and creative problem-solving.
A business that can rapidly innovate will quickly adapt to changing market demands and stay ahead of competitors. By introducing new products, processes, and technologies, a business can differentiate itself and meet the needs of its customers in unique ways. Rapid innovation also fosters a culture of creativity and growth, and can help a business to remain relevant and competitive in an ever-changing marketplace.
Continuous improvement allows an organization to constantly evolve and improve their products, processes, systems. By always seeking out ways to improve, a company can stay ahead of the competition, increase efficiency and productivity, and provide much better products and services to customers. Ultimately, continuous improvement can drive business growth, increased profitability, and a positive reputation in the marketplace.
When you need Agile Transformation
How to Identify the Need
There are several signs that indicate that your company may need an Agile Transformation. One of the most common indicators is a lack of innovation, where your organization is unable to keep up with changing customer and market demands. Another common sign is a slow response time to customer needs and feedback, which can result in loss of market share and revenue. Additionally, siloed departments, lack of collaboration, and slow decision-making processes are also clear signs that your company may need an Agile Transformation.
The cost of Agile Transformation can vary widely depending on the size and complexity of your organization. A 30-person company might spend $40,000 training and coaching their organization and see serious improvements. A multinational corporation with 1000 software developers might spend at least $1 million to get a similar effect. It can also depend on the level of training and support needed for your team members and how deep legacy cultural and process issues run. Despite the costs associated with an Agile Transformation, many organizations have found that the long-term benefits and ROI are well worth the investment.
How Long it Takes
The length of time for an Agile Transformation can also vary greatly depending on the size and complexity of your organization. For smaller companies, the transformation process can take as little as a few months, while for larger companies, it can take several years up to a decade. The key to a successful Agile Transformation is to have a clear vision, roadmap and adapt quickly to new information as the transformation progresses. You must also have the right level of resources, training, and support in place. Additionally, it is important to be patient and persistent, as the transformation process can be challenging, but the results are well worth the effort.
Top Five Success Factors
While every Agile Transformation is different, several common patterns have emerged from both successful and failed agile transformation efforts.
While there can be no single definitive list of factors that predict the success of an agile transformation, the following have emerged as common components of organizations that successfully transform:
Training is crucial for organizations undergoing an agile transformation. It provides a comprehensive understanding of agile principles, practices and values, which leads to better adoption and implementation. Training also develops teamwork skills, such as communication and flexible thinking, leading to improved performance and results. Moreover, it increases engagement and excitement, promoting a positive and productive work environment crucial for the success of the transformation.
Leadership plays a crucial role in supporting and driving successful agile transformations. They set the tone, provide necessary resources, and serve as role models. Their commitment to the change and embodiment of agile principles fosters a culture of continuous improvement and learning, helping overcome resistance and increase engagement.
Effective and open communication is crucial in any organization undergoing an agile transformation. Clear and consistent communication helps to ensure that everyone is on the same page and understands the goals, expectations, and progress of the transformation. Honest and timely communication can build trust and collaboration among team members and stakeholders, leading to better results and continuous improvement. Direct and two-way communication is essential for overcoming resistance to change and for addressing any concerns. Agile communication practices, such as daily stand-up meetings and regular retrospectives, can facilitate and enhance the agile transformation.
Legacy technology and supporting processes often slow the transformation process. Lengthy and manual quality assurance, restrictive and slow change management policies, poor development practices, and out of date technology, are some of the common problems.
There are many modern technologies that support an agile transformation by enabling continuous integration, continuous delivery, and automated testing. This helps to streamline the development process, improve quality, and reduce the time it takes to bring new features and products to market. Purpose-built project management tools, such as Jira, Version One, Azure DevOps, can also be used to improve release forecasts, transparency, communication and collaboration, which are essential for rapid delivery. Additionally, better automation technology can help to automate manual tasks, freeing up time for employees to focus on more strategic work. care must be taken to choose tools that enable agility. Some tools require excessive administration and maintenance, which can slow delivery and serve against the purposes of your agile transformation. Sometimes it's best to start with something simple and expand from there rather than starting with a large powerful tool that takes a lot of time to set up, configure and learn.
Effective Change Management
Change management is a critical aspect of any organizational transformation, and this is particularly true for agile transformations. The process of shifting from a traditional, hierarchical, top-down management approach to a more adaptive, iterative, flexible, bottom-up way of working can be challenging for individuals, teams, and the organization as a whole. Effective change management with a focus on people helps to ensure that everyone involved understands the purpose of the transformation, what success looks like, and their role in making it a success. It also helps to mitigate potential risks and overcome resistance to change.
There are several change management frameworks that are commonly used to support agile transformations. These frameworks provide a structure and set of tools for managing the change process and ensuring its success. Some of the most widely used change management frameworks include John Kotter's 8-Step Change Management Framework, and ADKAR which is an acronym for Awareness, Desire, Knowledge, Ability, and Reinforcement developed by Prosci.
Kotter’s 8-Step Change Management Model
John Kotter's 8-Step Model is a widely used framework for managing organizational change. The model outlines eight key steps that organizations can follow to successfully implement change. These steps include:
- Create a Sense of Urgency: Create a sense of urgency and inspire people to take action by demonstrating the need for change.
- Build a Guiding Coalition: Assemble a group of influential people who can work together to drive the change effort.
- Form a Strategic Vision: Develop a clear, compelling vision for the future that motivates people to support the change.
- Enlist a volunteer army: Successful large-scale change requires the engagement and commitment of a large number of people. Individually, they must be motivated to actively participate, and collectively they must work together towards a shared goal.
- Enable Action by Removing Barriers: Remove barriers and empower others to act on the vision by providing the resources, support, and authority they need.
- Generate Short-Term Wins: Create short-term wins that demonstrate the value of the change effort and build momentum for further change.
- Sustain Acceleration: Use the gains from the short-term wins to drive further change and create even more momentum.
- Institute Change: Make the link between new actions and organizational success clear, maintaining it until it becomes a strong replacement for old routines. Assess systems and procedures to guarantee that management techniques support the newly adopted behaviors, attitudes, and work methods.
Kotter's 8-Step Model is a proven and practical approach to managing organizational change. By following these steps, organizations can successfully implement change and achieve their desired results.
ADKAR is a model for change management that stands for Awareness, Desire, Knowledge, Ability, and Reinforcement. It outlines the five key steps that an individual must go through in order to successfully adopt and integrate a change into their work or personal life.
- Awareness: This is the first step in the ADKAR model, where the individual becomes aware of the need for change. This could be through communication from leadership, identifying a problem, or observing a gap in current processes.
- Desire: Once the individual is aware of the need for change, they must have a desire to change. This could be motivated by personal goals, external incentives, or a belief in the benefits of the change.
- Knowledge: In order to successfully adopt a change, the individual must have a clear understanding of what the change entails, how it will be implemented, and what their role will be in the change.
- Ability: The individual must have the skills and capability to implement the change in their work or personal life at the right performance level. This may involve training or development to acquire the necessary abilities.
- Reinforcement: Finally, the change must be reinforced through ongoing support, recognition, and reinforcement of the benefits of the change. This helps to embed the change into the individual's habits and behaviors and ensures that it becomes a permanent part of their work or personal life.
The ADKAR model is used by change management professionals to help organizations and individuals understand the process of change and what steps they can take to increase the chances of success.
A combination of the ADKAR approach coupled with Kotter’s change management method can help an organization deliberately and effectively manage the complexity of an organizational agile transformation.
Strategic Transformation Options
An emergent agile transformation is one that evolves from a seed. Imagine planting a single Scrum team in a company, and evolving an organizational structure that mimics and supports it. Teams may choose different methods and tools to support their growth with little intentional standardization. up-front The end state is not predictable in the beginning, but emerges over time. A transformation like this might have an organizational structure that continuously evolves as the needs of the business change. The resulting structure, tooling and team level development processes are rarely set in stone at any time and subject for constant inspection and adaptation. This is often a good place to start for small organizations or departments looking to transform.
To apply an emergent transformation to your organization, you can follow these general steps:
- Introduce Scrum to the organization and create at least one cross-functional, self-managing team and start generating value. Use this first team as a learning opportunity to fine-tune Scrum usage and demonstrate its benefits to the organization..
- Once the first Scrum team consistently has available Done, usable increments consistently every Sprint, clone the team using it as a primary example of success. Resist the temptation to split the first Scrum team up. Doing so risks damaging the first team. Instead use it as an example to follow for new teams.
- Carefully identify and remove impediments the first teams discover and improve your business as a result.
- Continue to expand Scrum to other teams and departments, encouraging a culture of transparency, inspection, and adaptation.
- Continuously review and optimize Scrum usage, identifying areas for improvement and taking action to address them.
- Foster a learning mindset and continuously improve the organization's agility, responsiveness, and customer value delivery.
Remember that Scrum is not a silver bullet, and its success depends on the organization's commitment to change, leadership support, and a culture of continuous improvement.
Large companies often favor predictability. Performing an agile transformation in a predictable and convergent way can be especially challenging because agile transformations are inherently complex and adaptive processes. However, there are some strategies you can use to increase the predictability and convergence of your transformation:
- Define clear goals and success criteria: Define the desired outcome of your transformation and specific, measurable criteria for success.
- Use a structured approach: Use a structured approach to plan, execute, and monitor your transformation. Standardize on a delivery framework as a starting point. Scrum is one of the most popular ways to start and often a great place to begin.
- Start with a high profile pilot project: Start with a pilot project or team to test and refine your approach before scaling it to the rest of the organization. This reduces the risk of breaking a lot of eggs before the first omelet is ever produced.
- Define value: Establish
- Establish and Train team(s): Ensure self-managing and cross-functional teams exist
- Engage stakeholders: Engage stakeholders at all levels of the organization and ensure their active participation and support throughout the transformation.
- Communicate frequently: Communicate frequently and transparently with all stakeholders to keep them informed of progress and any changes in direction.
- Measure and manage progress: Use metrics to track progress, identify bottlenecks, and adjust the transformation approach as needed.
Remember that agile transformations are not one-size-fits-all, and the best approach will depend on the unique context, culture, and needs of your organization.
Ideal Organizational Structure
There is no one "ideal" organizational structure for an agile company, as each company's needs and circumstances may vary. However, an organizational structure that is commonly used in agile companies is a flat, cross-functional structure where employees are organized into self-managing, autonomous teams that work collaboratively towards a shared goal.
Flat structures with team-level autonomy are more customer and value focused. These structures also allow for quick and flexible decision-making, open communication, and efficient use of time, money, labor, and resources. These structure have roles, responsibilities and accountabilities of team members clearly defined, and team members empowered to make decisions that impact their work. This flatter structure can foster innovation and enable companies to adapt quickly to changing circumstances.
An organizational structure for an agile company should support high degrees of business agility. To get the speed and flexibility required, agile organizations emphasize collaboration, self-management, and continuous improvement. Here are some key characteristics of an ideal organizational structure for a highly agile business:
Organize the company into small, cross-functional teams that are self-managing and can deliver customer value independently. Dependencies are a common reason why companies struggle to deliver or change direction quickly.
Scrum has accountabilities such as Scrum Master, Product Owner, and Developers. Scrum is a popular way to create an agile delivery team and a great place to start in setting up self-managing, cross functional teams.
Encourage servant leadership, where leaders empower and support teams. Growing their people and teams like a gardener rather than commanding and controlling them.
Encourage decentralized decision-making, where decisions are made by those closest to the work rather than by a central authority.
Adopt a flatter hierarchy that encourages collaboration and open communication, with minimal bureaucracy and hierarchy. Waiting for permission is time consuming. Leveraging only a few leaders to make decisions that empowered front-line, customer-facing team members could make will reduce business agility.
Support organizational structures that enable continuous learning, where individuals and teams are encouraged to learn, experiment, and improve. A business that is continuously growing and learning accelerates past its competitors.
Remember that the ideal organizational structure for an agile company will depend on the unique context and needs of the company, and it may require experimentation and adaptation over time.
Measuring Transformation Success
Measuring the success of an agile transformation requires tracking various metrics and KPIs related to the transformation. OKRs can be used to define specific objectives and key results, which help to align the organization's efforts with strategic goals. Successful agile transformation can be measured by the extent to which it has helped to improve the organization's ability to respond to change, innovate, and deliver value to its customers.
It's important to track the progress regularly and make adjustments if necessary to ensure that the transformation is on track. Additionally, feedback from employees, customers, and other stakeholders can provide valuable insights into the effectiveness of the transformation.
Key Performance Indicators
Key Performance Indicators (KPIs) are measurable values that help track and assess the success of an organization or specific activities within the organization. KPIs vary depending on the goals of the organization or activities being measured, but here are some examples across different areas:
- Sales: revenue growth, customer acquisition rate, customer retention rate, average order value
- Marketing: website traffic, conversion rate, cost per lead, social media engagement
- Customer service: customer satisfaction score, net promoter score, average resolution time
- Finance: profitability, return on investment, cash flow, debt-to-equity ratio
- Human resources: employee turnover rate, employee satisfaction score, cost per hire, time to fill a position.
Transformation Metrics to Watch
There are many possible measures or metrics that a highly agile company could use, depending on its goals and focus. Some examples of commonly used measures and metrics in agile environments include lead time, cycle time, defect rates, customer satisfaction, employee engagement, and team morale. Other metrics that may be useful in specific contexts include time-to-market, release frequency, innovation rate, return on investment (ROI), and net promoter score (NPS). The key is to select metrics that align with the organization's goals and values, are meaningful and relevant to stakeholders, and provide actionable insights for continuous improvement.
Objectives and Key Results
OKRs stand for Objectives and Key Results, a goal-setting framework that helps organizations to focus on achieving specific outcomes.
In the context of agile transformation, an example of an objective could be "improve time-to-market for new products by 50% within the next six months." The key results that would help achieve this objective could include:
- Increase Sprint Review Stakeholder attendance from 50% to > 90%.
- Decrease the average time between releases from 3 weeks to 2 weeks.
- Achieve a 20% improvement in code quality through increased use of automated testing.
- Reduce average reported technical debt rating from 8 out of 10 down to 4 out of 10
- Increase team capacity by 25% through targeted hiring and training.
Other examples of OKRs related to agile transformation might include improving customer satisfaction scores, increasing the frequency of deployments, reducing the time between identifying and resolving production issues, or improving team engagement and retention rates. The key is to set objectives that align with the overall goals of the transformation and that can be measured with specific, data-driven metrics.
Tools to Support Transformation
Good software tools are important to increased business agility because they can help streamline communication, improve collaboration, and automate processes. With the right tools, teams can work more efficiently and effectively, reducing delays and accelerating delivery. These tools can also provide real-time visibility into project progress and help identify potential issues sooner, enabling teams to take action quickly and make informed decisions.
Ultimately, good software tools can help support the cultural shift towards agility by helping teams work together more effectively towards a common goal. Here are some examples of common tools used in highly agile organizations:
A lightweight highly collaborative set of office productivity tools that make it easy for more than one person to edit a document simultaneously from different locations via the web.
A project management tool that can be used to manage and track tasks, sprints, and releases.
A visual collaboration tool that allows teams to organize and prioritize tasks on a virtual board.
A project management tool that helps teams track and manage tasks and projects.
A messaging and collaboration tool that allows teams to communicate in real-time, share files, and integrate with other software tools.
A web-based platform for version control and collaboration that allows developers to work together on projects and manage code.
A collaboration and documentation tool that allows teams to create, organize, and share knowledge and information.
A web-based hosting service that allows teams to manage and collaborate on Git repositories.
A collaborative whiteboard platform that allows teams to brainstorm, plan, and visualize ideas and workflows.
A cloud-based video conferencing platform that allows people to meet, chat, and collaborate remotely.
A web-based automation tool that enables users to connect various web applications and automate repetitive tasks without coding.
General tooling recommendations:
Start simple and evolve. Tools can very easily become distracting and time consuming which serves to slow you down rather than speed you up.
Aim for tools that are easy to change. Tools that require heavy administration should be avoided if delivery speed and adaptability are your goals.
Agile Transformation Roadmap
Path to Success
The current state of the organization
Goals and outcomes of transformation
An adaptable roadmap for transformation
And manage your progress using empirical evidence
Success and build momentum to accelerate change
A transformation should never be thought of as a one-size-fits-all approach. Changing an organization is one of the most complex efforts that can be done, usually far more complex than the products and services it develops. There are some patterns that are similar across organizations and transformations and those will be shared in what follows.
Performing a successful agile transformation requires careful planning, collaboration, and effective change management. The process of transforming to an agile organization is not a cookie cutter event that has a perfectly defined path and outcome. Instead it's a continuous journey of humility, learning, self-reflection, improvement, and adaptation.
Before getting started:
Deeply undersanding and then Implementing change management strategies such as ADKAR and John Kotter's change management method will help the organization adjust to the new way of working and and ensure that the transformation is successful.
ADKAR and Kotter's change management method can be valuable tools to help organizations successfully implement an Agile transformation by ensuring that all stakeholders are on board, the right training and support are in place, and the adoption of Agile development and business agility is reinforced over time.
Both ADKAR and Kotter's framework can be used together in the context of an agile transformation and the steps that follow will show how this can be done.
Assess the current state of the organization
Identify the top things that need to be done or changed. Start at with the most important to maximize focus and value delivered. Look for reasons why change must happen and what the consequences would be if nothing changed. This feed's into building Awareness and Desire from the ADKAR model. Create a list of organizational impediments that when removed will speed up delivery and the pace of transformation. This addresses the "Enable action by removing barriers" step of the Kotter Framework
Establish and communicate the need for change
Ensure that everyone in the company has a common understanding of why it’s necessary to make a change and continuously revisit this to ensure understanding is universal. Ensure everyone knows what "agile" means and how it differs from traditional project management approaches and why it’s important to be more agile. Create a sense of urgency among all stakeholders from front-line workers to the c-suite to get their buy-in for the transformation. This draws from ADKAR's "Awareness" step and John Kotter's "Create a sense of Urgency" step
Define the Goals of the Transformation
Define clear, measurable goals for the agile transformation. A clear vision of the end state of the transformation can help everyone understand the purpose and direction of the change. This vision should align with the organization's overall business strategy. This can be done through various channels, such as all-hands meetings, newsletters, and webinars. You should apply an empirical process control system to ensure you’re going the right direction. To create the transparency required, ensure you have appropriate measures and metrics defined. Limit your focus to a limited number that really matters to your business to avoid creating a lack of focus. This step implements "Form a Strategic Vision" from Kotter's Framework.
Assemble a Transformation Team
To lead the transformation strategically, you need to bring together a coalition of leaders and stakeholders who have the power and influence to drive change. You should have representatives from all levels of the organization, including the top executives, managers, and teams. To make things happen at the execution level, you'll also need teams that can get things done. Include people excited about the transformation. They could be stakeholders, developers, quality professionals, anyone who has the capabilities to make positive change happen. Empower teams and individuals to take ownership of the change in the context of the overall business strategy. Give them the resources, training, and autonomy they need to make the transformation succeed.
Get High-quality Training
- Scrum and Agile Development Practices Training: Provide training for the entire organization on Scrum and agile development practices to ensure that everyone is familiar with the methodologies and can effectively implement them.
- Manager Training: Provide training for managers on how to manage and lead an agile team, as well as how to support the team in their transition to agile.
- Executive Training: Provide training for executives on the benefits of agile and the importance of their support in the transformation process.
Define Products and Value Streams
Everything that comes next depends on the proper alignment of people and resources to the customer value that’s produced. Ensure you know who your customers are to get this right. Focus on matching capacity demand to not overwhelm your existing resources.
Scrum being a popular way to start, ensure you have qualified Product Owners capable of maximizing the value of the Products and Services you’ve defined. Ensure you have qualified Scrum Masters or business agility advisors that can help the organization make the changes necessary and support them locally. Properly defining accountabilities and making them clear helps with "Knowledge" from ADKAR and "Enlist a Volunteer Army" to ensure everyone knows who is accountable for what results.
Form Self-Managing Teams around Value
Organize teams in a way that supports collaboration and cross-functional teamwork. Align them to the products and value streams you have defined. Reduce dependencies by ensuring they have everything they need to deliver customer value in small batches. We're experts in Team Setup.
Backlog Creation and Organization
Ensure there is a well-organized, prioritized, and regularly reviewed Product Backlog per product or value stream defined to ensure that work is being done and in the right order. Also ensure Product Goals are defined to keep focus toward business objectives. A good Product Owner will have this all under control. This will help to "Generate short-term wins" and "Sustain acceleration" from Kotter's Framework.
Deliver Incremental Value Constantly
This is one of the most important pieces that is often overlooked. Agility comes from rapid delivery and validated learning. You must deliver in small increments and look at the results. If it still takes you months or years to release value to your customers and/or you dont look at the results and improve, you’re missing the whole point. Building and releasing small and highly-valuable solutions helps implement the "Reinforcement" stage from ADKAR but also to "Generate short-term wins", "Sustain Acceleration" and "Institute Change" from Kotter's Framework.
Establish Communities of Practice
The last step of ADKAR is "Reinforcement" while the last step of Kotter's Framework is "Institute Change". Both point to the importance of baking the new way of working into the organization to ensure it sticks. Communities of Practice are a great way to ensure the newly agile organization remains agile over time and doesn't fall back to legacy business management practices.
Agile Transformation Challenges
When undergoing an Agile transformation, It's important to be aware of these agile transformation challenges to avoid repeating the same mistakes many companies make. With the right preparation and approach, agile transformations can be a huge success for organizations of all sizes.
Here are a few common issues you might see:
No Understanding of What ‘Agile’ Means
Without a clear understanding of what agile really means, it's difficult to get the results you seek. It's important to have a deep understanding of the results you expect to get. It’s not just about spinning up Scrum teams and having Scrum Masters. It’s about having a business that can respond quickly to changing business conditions, mitigating risk faster, capitalizing on opportunities sooner, and making your customers happier. Think of “agile” as an adjective. You want an agile business when there is lots of uncertainty and business risk.
Lack of Executive Support
Agile transformation requires a significant change in the way organizations work and it is important to have the support of upper management to ensure success. The way you lead an agile organization is different from how you lead a rigid organization. Agile organizations are that way because of the bottom up intelligence that’s gathered and the ground level decision making that happens. Organizations that wait for executive permission are slower than organizations that can adapt quickly as conditions change.
Resistance to Change
Change is never easy, especially in a large organization. It's important to effectively communicate the benefits of the Agile transformation to overcome resistance.
Failing to Involve the Right People
Agile transformation affects everyone in the organization, so it's important to involve all relevant stakeholders, leaders, managers, teams and individual contributors in the process. For a transformation to take hold, everyone relevant needs to be singing the same tune.
No Strategy or Goals
It's important to have a clear definition of success before embarking on an Agile transformation. This will help ensure everyone is working towards a common goal and that the transformation stays on track. Here is where a limited set of important measures or metrics should be established.
Lack of Commitment:
If the leadership of the organization is not fully committed to the Agile transformation, it will be difficult to succeed.
Failing to Adapt Existing Processes:
If your goal is agile delivery, often a significant change in existing processes must occur. Examples include existing project management processes, requirements gathering, status reporting, accounting of labor, financing of large scale projects, performance management, etc. If processes are not adapted to align with the goals of the transformation, it is likely to fail.
An agile transformation requires a significant investment in training and resources. Part of the change is that people know how to do their jobs to support an agile organization. If these investments are not made, the transformation is likely to fail.
Ignoring Cultural Issues:
Agile organizations are such because their culture embraces what that means. Often you find empowered front line workers doing all they can to satisfy customers, developers making process changes to lean out wasteful legacy ways, motivated individuals who understand the business and informing management about what is best rather than the other way around. It’s a cultural shift as well as a process shift. If cultural issues are not addressed, the transformation is likely to fail.
A clear roadmap for the Agile transformation is essential for success. You need to have a good understanding of where you are currently, where you want to go, and a path to get there. Without a roadmap, the transformation is likely to wander off course and fail.
No Change Management Strategy:
Failing to address how people make a change will often lead to passive or active resistance to the change. There are many change management frameworks that help address the people side of change.
A managers role in Transformation
Managerial Support is Crucial
Managers play a crucial role in the success of an agile transformation. There are many things a manager must do for a successful transformation. They are the ones responsible for setting the tone and leading the charge towards a more agile approach. They need to be fully committed to the transformation and understand the importance of adapting to new ways of working. This also means they have to understand their role in the new organization. Managers often have great influence in an organization and can derail a transformation effort in many ways if they’re not aligned with the new direction.
Agile transformation requires a change in the traditional management style. Managers need to shift from a top-down, command-and-control approach to a more collaborative and empowering approach to get the benefits of a truly agile organization. They need to be able to lead their teams through the change process and help them to embrace the new ways of working. They need to help teams mature to take on more and more responsibility and accountability for results. Individuals and teams who have endured many years of an organization with top-down leadership will often have a hard time adapting to an organization where they have a lot more authority. These individuals need special care and support from management to make the change happen.
Best Practices for Managers
Lead by example
Managers need to demonstrate their commitment to the transformation by embracing the desired end state themselves. This can involve participating in training with their teams, attending the Sprint Review, removing blockers that the Scrum Masters are having a hard time removing and being open to new ways of working.
Create a culture of continuous improvement
agile development and Scrum in specific is about embracing change and finding effective new ways of working. They’re about adapting quickly when there is a better way. Managers need to foster this culture by encouraging their teams to experiment, learn and continuously improve.
Agile development is about teamwork and collaboration to find the best ways of solving problems. Managers need to encourage their teams to work together and share ideas. This can involve creating opportunities for cross-functional teams to collaborate, such as team building events, team lunches, lean coffee meetings, etc..
Empower your teams
Agile delivery works by empowering teams to make decisions and take ownership of their work. Managers need to give their teams the autonomy to make decisions and provide the support they need to succeed. They need to share business context, constraints and expectations. Self-management requires boundaries to be effective and management must understand what the boundaries are and ensure the teams understand them too.
Be a coach
learning and continuous improvement are essential to an agile organization. Managers need to be supportive and provide guidance to their teams as they transition to a more agile way of working. They need to act more like a gardener to their team helping them to grow by creating the conditions in which they can thrive.
The role of managers in agile transformation is critical to its success. Managers need to be fully committed to the transformation and embrace the goals of the transformation and actively support it. Through leading by example, fostering a culture of continuous improvement, encouraging collaboration, empowering teams and being a coach, managers can help their teams to succeed in the transformation.
Impacts on the Organization
Agile transformation can have a significant impact on the way projects are financed. In traditional, water-fall project management, funding is typically secured in advance for the entire project, with little room for adjustments based on the progress of the project. This often creates artificial pressure on delivery teams since a date for completion was established in the budgeting discussion the year prior. However, in an agile delivery, the focus is on delivering value in smaller, incremental releases, which creates room for more flexible and adaptive funding and financing strategies
For example, in an agile business, funding can be allocated based on the value delivered in each sprint or iteration, rather than being secured in advance for the entire project. This helps to align financing with actual progress and can reduce the risk of over- or under-funding a project. Additionally, agile teams are empowered to make decisions about how to prioritize and allocate resources, which can improve the efficiency of project funding and reduce waste.
In general, the agile approach to project management and financing can lead to more effective resource allocation, improved risk management, and a better alignment of funding with actual progress, ultimately leading to more successful business outcomes.
For an agile transformed company, HR functions differently from traditional HR in several ways. Agile principles emphasize flexibility, continuous improvement, and rapid response to change. This requires HR to adopt a new mindset and new approaches to work.
One difference is in the recruitment and hiring process. In an agile transformed company, HR focuses on finding individuals who fit with the company's values, culture, and work style. This is because the success of agile delivery depends on having a team with a shared mindset and common goals. Generalist team players are usually favored over strong specialists since the need for collaboration and communication is high and agile companies favor those who can pitch in to help on a high priority problem no matter what their specialty may be.
Another difference is in performance management. In a traditional HR model, performance is often evaluated on an annual or semi-annual basis. In an agile transformed company, performance is evaluated regularly and more frequently, with a focus on continuous improvement. This allows HR to quickly identify and address any performance issues, leading to improved results.
Additionally, HR in an agile transformed company is more focused on employee development and career growth. Agile principles emphasize learning and continuous improvement, and HR plays a crucial role in supporting employee development through training, coaching, and mentoring.
Overall, the HR function in an agile transformed company is more proactive, supportive, and focused on fostering a culture of continuous improvement, which is crucial for the success of the transformation.
Project Management Office (PMO)
An agile transformation can have a significant impact on a PMO (Project Management Office). Agile development emphasizes flexibility and adaptability, which can challenge traditional PMO processes and structures that are focused on control and predictability.
In an Agile PMO, the focus shifts from centralizing project control to enabling cross-functional collaboration and communication. The PMO may need to change its approach to project planning, monitoring, and reporting to support Agile teams and align with the goals of an agile organization. This can include incorporating Agile frameworks, such as Scrum, into the PMO's project management toolkit..
The PMO may also need to provide training and support to project managers and teams to help them understand and adopt a mindset that supports higher levels of business agility.. This may require changes to the PMO's staffing and resource allocation to provide dedicated support for projects implementing Scrum or other Agile delivery methods..
Overall, an Agile transformation can lead to a more collaborative, adaptive, and flexible PMO that supports the needs of Agile delivery teams and drives better business results.
Agile transformation can impact corporate governance by changing the way decisions are made and responsibilities are allocated within the organization. In traditional corporate governance models, decision-making power is centralized and hierarchical, but in an agile organization, decision-making is decentralized and cross-functional teams have more autonomy. This can lead to a more flexible and responsive organizational structure that is better equipped to handle changing market conditions and customer needs. Done well, an agile organization can help make better decisions quicker.
Additionally, agile organizations emphasize continuous improvement, experimentation, and feedback, which can lead to a culture of innovation and learning. This can result in a more dynamic and adaptive governance structure that is better suited to fast-paced, complex business environments. However, it is important to note that agile transformation should not compromise the organization's ethical standards and legal obligations. The principles of agile governance should be aligned with the organization's overall governance framework to ensure that the organization remains compliant and responsible with legal or regulatory boundaries in which they operate.
Agile Transformation Successes
Agile transformation has been implemented successfully in a variety of industries and has resulted in improved processes, increased efficiency, and higher levels of customer satisfaction. Here are a few examples of successful agile transformations in different industries:
Agile Transformation in Insurance
Nationwide is a well-known insurance and financial services company that has been providing quality services to its customers for many years. The company underwent an Agile transformation that has had a significant impact on its operations and has helped it to better serve its customers.
Nationwide saw the benefits of agile development and decided to adopt it across the organization. The result has been a more efficient and effective way of working, with improved communication and collaboration between teams, and a more customer-focused approach.
One of the key benefits of Nationwide's Agile transformation has been an increase in the speed of delivery. With Agile development, teams are able to work together more efficiently, and make quicker decisions, which has allowed Nationwide to get new products and services to market faster. This has been particularly beneficial in the fast-paced insurance and financial services industry, where being first to market can give a company a significant advantage.
Another major benefit of the Agile transformation has been improved communication and collaboration between teams. Agile development encourages regular check-ins and stand-up meetings, which have helped to break down silos and improve communication between departments. This has led to a more coordinated and integrated approach to problem-solving, resulting in better solutions for customers.
Nationwide has also been able to better serve its customers by adopting an Agile approach. Agile development puts the customer at the center of everything, and Nationwide has been able to use this approach to better understand the needs of its customers and to deliver more effective and efficient solutions. The company has also been able to use Agile development to rapidly respond to customer feedback and make improvements to its products and services.
Nationwide's Agile transformation has been a resounding success. The company has been able to benefit from increased speed of delivery, improved communication and collaboration between teams, and a more customer-focused approach. These benefits have helped Nationwide to better serve its customers and stay ahead of the competition in the highly competitive insurance and financial services industry.
Agile Transformation in Healthcare
Hoffmann-La Roche, also known as Roche, is a leading global healthcare company with a rich history of 122 years. As a family-owned company with approximately 94,000 employees in over 100 countries, Roche is the largest biotech company in the world, offering a wide range of medicine for oncology, immunology, infectious diseases, ophthalmology, and diseases of the central nervous system. Furthermore, Roche is a top provider of in-vitro diagnostics, tissue-based cancer diagnostics, and diabetes management.
To stay ahead of the competition, Roche has embarked on a journey to become a more agile and digital organization. To support this effort, a global leadership initiative was launched to help senior leaders develop the necessary mindsets and capabilities to drive both personal and organizational transformation.
Tammy Lowry, Roche’s Head of Talent Innovation, recently sat down with Paul Byrne, President of Europe at Full Circle Group, and Michael Lurie, a Partner at McKinsey, to discuss this initiative. Michael Lurie highlighted the importance of not just another change but a fundamental transformation that requires both personal transformation in leaders and organizational transformation. Paul Byrne emphasized the need to embody what is being conveyed to the participants and to work with a creative mindset of purpose, trust, and possibility.
The program, known as Kinesis, is a four-day experience that starts with a 360-degree assessment, the Leadership Circle Profile, to help leaders understand how their mindsets and behaviors directly impact their leadership effectiveness. On the first day, participants confront their patterns of thought that may have been successful in the past but may now limit their effectiveness. On the second day, participants are introduced to the principles and practices of agile organizations. The third day focuses on integrating and applying the principles and practices of agile organizations. Participants come up with specific ideas to make Roche more agile, exploring both personal and organizational transformation. The final day is a real-time experiment, where participants design their approach to engage members of the executive committee and engage others in the transformation journey.
Roche's journey to agile transformation is a continuous process of experimentation and exploration, driven by the company's commitment to innovate and improve the ways it works, with the ultimate goal of getting medicines and diagnostic solutions to patients faster. The Kinesis program has been successful in helping Roche's leaders reimagine their personal leadership and the organization, making it a more agile, responsive, and innovative place to work.
Agile Transformation in Financial Services
Agile development has taken the business world by storm and for good reason. Companies that adopt this approach to work have seen significant improvements in productivity, collaboration, and customer satisfaction. ING, a global financial organization, is one such company that has successfully undergone an Agile transformation and is reaping the benefits.
The journey towards an Agile way of working at ING started in 2015. At the time, the organization was facing challenges with its traditional waterfall approach to projects. Inefficiencies and slow processes were hindering progress, and the company was in need of a change. The decision was made to implement Agile development frameworks, starting with Scrum, across the entire organization. This was no small feat, as ING has a global presence and employs over 52,000 people.
The implementation of Scrum was a gradual process and involved extensive training for all employees. The organization also established a number of Scrum teams, each with a dedicated Scrum Master. These teams were tasked with developing and delivering projects in an Agile manner. Over time, the teams became more proficient in Scrum and were able to deliver projects faster and with better results.
The impact of the Agile transformation at ING has been substantial. One of the most significant changes is the increased speed at which projects are delivered. With agile development, the focus is on delivering small, incremental improvements to the product or service. This approach allows for faster delivery and also makes it easier to make changes as needed based on customer feedback.
Another significant benefit of the Agile transformation at ING is the improved collaboration between teams. With Scrum, teams work together in a cross-functional manner to achieve a common goal. This collaboration has helped to break down silos and foster a sense of shared ownership among employees. The result has been a more cohesive and efficient organization.
Finally, the Agile transformation has had a positive impact on the customer experience. With the ability to deliver projects faster and make changes based on customer feedback, ING has been able to provide better services and products. This has led to increased customer satisfaction and loyalty.
The Agile transformation at ING is a great example of how companies can benefit from adopting this approach to work. By embracing Agile methodologies, ING has been able to deliver projects faster, improve collaboration, and enhance the customer experience. If your organization is facing challenges with its traditional approach to projects, it may be worth considering an Agile transformation.
Agile Transformation in Retail
Data is reshaping the way that companies approach product and campaign development. With the abundance of data at their fingertips, companies can now test the effectiveness of everything they do. Walmart, a company at the forefront of incorporating an agile technology product building approach to technology and analytics, is leading the way in this data-driven era.
Walmart’s data scientist, Georgi Gospodinov, is helping to revolutionize the company's analytics technology and product development practices. Walmart uses real-time feedback to incorporate end-user feedback while they build their applications and tech products. This feedback is gathered through two approaches: active learning and performance monitoring.
With active learning, Walmart incorporates features into their technology applications that allow them to automatically retrain or relearn how they should perform based on real-time data. The more the product is used, the more refined it becomes. Performance monitoring, on the other hand, allows Walmart to monitor the performance of their applications in real-time without having to run a heavy process on top of their process.
The dual-focused agile technology building approach allows Walmart to continuously monitor the performance of their applications and make necessary changes. This adaptive design is unique and is shaping the future of product development.
The big data era has opened up new possibilities for companies to test and understand their technology products in a way that was not possible before. By incorporating real-time feedback and monitoring, Walmart is leading the way in this data-driven era, creating a more agile and adaptive product development process.
Revisting Key Points
Agile Transformation Defined
Agile Transformation moves an organization to delivery practices that are more collaborative, flexible, and results-focused than traditional project management methods. While Agile Transformation shares some similar goals with Digital Transformation, it is more focused on increasing adaptability and customer satisfaction, and less focused on the use of digital technologies. Agile Transformation is broader in scope and more comprehensive than Agile Adoption or Agile Transition.
Benefits of Agile Transformation
Agile transformation aims to make an organization more adaptable and efficient in delivering customer value and mitigating risk. It involves integrating agile values and principles into company operations, culture, and processes, resulting in benefits such as increased speed, improved customer satisfaction, and reduced costs. An organization that lacks innovation, slow to adapt, and has little collaboration across knmowledge silos will likely benefit from Agile Transformation.
Agile Transformation Success Factors and Challenges
Successful Agile Transformations include several factors, including high-quality training, support from leadership, transparent communication, appropriate technology and tools, and effective change management. Conversely, a lack of understanding of what agile is, lack of leadership support, unrelenting resistance to change, failure to include all the relevant stakeholders, and a lack of transformation goals will present serious challenges to the transformation and increase the risk of failure. Organizational management can help by leading by example, empowering people to make decisions, and coach their teams in collaboration.
Agile Transformation Success Stories
There have been many successful examples of agile transformation across different industries, including banks, insurance companies, healthcare, financial services, and retail. Common patterns among these instances include an investment making the transformation successful (training, coaching, workshops, etc.), driving the change throughout all levels of the organization (top leadership to individual contributors), and relentless pursuit of customer satisfaction, continuous improvement, and collaboration.
Final Thoughts on Agile Transformation
The key to a successful agile transformation is effective change management, which includes identifying the need for change, making the right investments to support the change, and avoiding common pitfalls. The role of managers is also critical, as they must provide support and follow best practices to ensure the transformation is a success.
In conclusion, agile transformation is a powerful tool for companies that want to stay competitive in a rapidly changing business landscape. While there are many challenges along the way, companies that are successful in making the change can reap significant rewards in terms of improved customer satisfaction, reduced costs, and increased speed and flexibility.
Agile Transformation is the key to your future success
Responsive Advisors takes a holistic approach to agile transformation. We’re Scrum experts and agile business advisors focused on improving results for our clients. If we can be of any help to you at any stage of your transformation, please reach out.