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Business Agility – Megatrend or Myth?

Silvio Moser, CTO

Many companies are jumping on the Business Agility bandwagon. They have started implementing the Spotify Model, renaming departments to Tribes and teams to Squads. They have adopted Scrum, or at least some of its practices, like Sprints, (by-weekly) dailies and retrospectives. Tasks are now called Epics and Stories; progress is tracked on Kanban boards in Jira. Chances are that through their involvement in IT projects some people in the business are part of Agile Release Trains and adopting the Scaled Agile Framework (SAFe). But have organisations really embraced the concept of agility and moved towards it? Judging from the results of SwissQ’s Trends & Benchmark study, there are some big question marks over the real progress being made.

Truth be told, while organisations have started adopting agile in the business area, the actual way of doing things hasn’t really changed. They cling to the same old processes, the same old rules, the same old hierarchy and the same old business models. Can we really call this Business Agility?

As you might expect, a mere 54.7% of those surveyed are satisfied with the introduction of agile ways of working. Many are not getting the results they want. And some even lay the blame on agile itself. The Trends & Benchmarks survey, conversations with people in various companies and our day-to-day work all confirm that many organisations are not actually very agile. They are stuck in an old bureaucratic approach. While they may be using agile methods, they are not actually being agile. To be so would require a change in mindset, culture, and leadership.

Of course, this comes as no surprise to those who follow the agile movement or who have been reading our reports for the past couple of years. So why is this happening? Are these companies afraid of doing things differently and being out of step with the market? Do they fear the change of roles and responsibilities or even of losing jobs? 

The challenge for most companies is that they are not prepared for the depth of transformation that business agility requires. Business Agility is about more than adopting new technologies (data, AI, cloud, …) and bringing features to market faster. You can’t – and shouldn’t – rely on your IT department to manage the transformation. The key to transforming your business is in the hands of the business itself. It is about people, processes and organisational structures. To move ahead of the competition, to be truly innovative and to act fast, you need to look at all these aspects. 

Culture matters

Let’s start with people. There are many reasons why we are wary of change. The fear of failure. The fear of missed opportunities. The fear of losing control. We’re all afraid of something and the unknowns that every change bring with it amplify these fears. It is important that you, your co-workers, your boss and maybe even your clients understand the need for change – as well as the potential dire consequences of not changing.

For a transformation to be successful, an organisation needs to change its culture and adopt an agile mindset. But although culture is recognized as the most important success factor, the focus of transformation efforts is usually on processes over people. While 37% of companies are targeting processes and methodologies in their transformation, only 18% of effort is being spent on culture and leadership, and even less focus (14%) on people and skills.

Change doesn’t happen overnight and there will be many impediments along the way. The most important thing is for everyone to understand the underlying need for change and to be willing to work together to make it happen.

Evolving roles

For 68% of respondents, their role has changed due to agile working practices. They are doing more coaching instead of managing. They are adapting to shorter planning cycles. They are also taking on entirely new roles. 

Everybody seems to be a Product Owner (PO) nowadays. But one of the biggest challenges is unclear responsibilities. Because the rest of the organisation has failed to adapt, the PO role coexists with more traditional roles like project leaders, business analysts and application owners. Agile events, such as refinement and planning meetings are added, but none of the existing meetings eliminated. Too many tasks, too little time.

To embrace an agile way of working, existing job descriptions and processes need to be remodelled. 

A leaner way

Processes determine how things get done and impact your organisation’s quality and speed. If you have complicated processes involving lots of handoffs, chances are you are not the fastest mover in your industry. You will probably also have trouble adjusting to changes in the market environment. Processes are there to support your business, not to hinder it. Organisations that take this principle to heart design their processes along value chains that provide value to the customer. However, among survey respondents, organisations are still structured in divisions (45.7%) and not aligned with value streams (11.8%).

Agile has taken many clues from lean. And for good reason. Lean aims to reduce waste and focuses on flow and continuous improvement. These principles are also at the core of the Kanban method. Kanban’s use has been growing steadily over the years but now seems to have plateaued (ca 1/3 of respondents use Kanban vs 60% for Scrum). Perhaps because it was never properly implemented. Many organisations that claim to be using Kanban have indeed visualized their work on a task board but are missing work in progress (WIP) limits (only 14.7% of those adopting agile practices use WIP limits). A task board is a good first step but does not lead to a leaner and more agile process. If, however, you can only work at three things at any given time, you will be forced to make decisions about priorities and think about how the process can be improved.

Futureproof your organisation

One key element of Business Agility is to build an organisational structure that is itself agile, so you can react to evolving customer needs and a changing environment without each time having to do a reorganisation.

The basic building blocks of an agile organisation are self-organising teams. Giving teams ownership and responsibility for their work leads to faster and better decision-making. Indeed, 78% of respondents say their team is embracing agile ways of working. But this drops to 24% at an organisational level and only 4.4% think their management is agile.

Yearly planning cycles (except for the budget) may be a thing of the past, but most organisations still think in projects when it comes to creating new solutions and features. And only 31% of the portfolio is focused on innovation. Is that enough to survive in a competitive market environment? Probably not. The traditional split of the organisation into business and IT needs to be cast aside and reconfigured by products, putting the customer experience front and centre. There needs to be a shift from project to product thinking.

Being Agile

In the past, agile transformation often originated bottom up within the IT department. Today it is mainly driven by management, who sometimes lack the understanding of the values and principles behind it and see it as a onetime effort. But an agile transformation never ends. According to the Trends & Benchmarks results, the greatest potential lies in establishing an agile mindset and leadership (65.6%). The agile mindset must take hold at all levels. Ultimately, this ethos must become part of the company’s DNA, enabling it to continually adapt and improve.Agile is about changing the way people work, empowering employees and giving them responsibility for their own success. It is about using modern technologies and tools to achieve business goals. It is above all aboutbeing close to the customer, anticipating their needs and delighting them with innovative products. To achieve this, you may need to re-invent your company.

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