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What Is Agile Transformation?

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Agile Transformation

Gone are the days when you could map out a plan, and it could be left unchanged for months. Businesses cannot function with an “established” plan anymore. This is because the tides are constantly changing and it is tough to keep track of so many variables that could potentially affect your business. Also – the competition. Every new idea has 15 different existing versions in the market already! It’s frustrating for business leaders with traditional mindsets. Traditional organizations are built around a static, siloed, structural hierarchy. It’s not that it has completely fallen irrelevant, it does work for niche businesses. However, for most others, the times are calling for an Agile Transformation!

Agility is all the rage today. There is a growing recognition of the value it brings and the culture it creates. Companies big and small are recognizing the benefits of Agility and Agile Transformations. Agility allows companies to respond to market changes and stay ahead in the race. For most, it secures their fiscal background as well. However, having your software teams run with Agility is different from your whole organization being Agile. But moving to an agile operating model is tough, especially for established companies. There are several paths to agility and all companies have different starting points. So, how do you go about your very own Agile Transformation? Let’s find out in this blog!

What Is Agile Transformation?

Agile Transformation is centred on establishing teams, constructing prioritized task lists, and consistently generating functional, tested software. When implemented on a larger scale, it involves establishing networks of interconnected teams, orchestrating dependencies, constructing rapid decision-learning cycles, handling trade-offs, expediting market entry, and prioritizing throughput metrics over conventional productivity measures. The goal of the Agile Transformation is to eliminate impediments that hinder the achievement of these goals.

Agile Transformation Definition: Agile Transformation is the process of transforming an organization’s culture and nature to be Agile. It is a fundamental change in the way people in the organization think and feel while approaching their work and goals. The goal is to be nimble, foster innovation, empower teams and thereby generate quality outputs.

Traditional organizations place their governance bodies at their apex, and decision rights flow down the hierarchy; conversely, agile organizations instill a common purpose and use new data to give decision rights to the teams closest to the information. An agile organization can ideally combine velocity and adaptability with stability and efficiency.

Some companies are Born Agile. Some adopt Agile. While a few go through a complete transition from their traditional hierarchical structure to the fluid Agile model. The latter two seem similar? Agile Adoption vs Agile Transformation – let’s clear out the difference!

What is the difference between Agile Adoption and Agile Transformation?

A complete Agile paradigm shift is in the making. Business leaders are welcoming the concept with open arms. However, there is slight setback they face – Agility cannot be brought out in a day, or two days, or even a few months. For some, it takes years. Here lies the key difference between Agile Adoption and Agile Transformation.

Agile adoption is, as the name suggests, adopting agile methodologies. Here, organizations move from their current traditional processes like Waterfall to Agile frameworks like Scrum or Lean. It is easier to implement because the team simply moves from one set of rules to another while working with the same mental approach to the projects. The curiosity ignited by Agile of  “Why are we doing this? Can this be better?” should be present in each working individual in the team. But that is usually absent when there is only a process shift and not a mindset shift.

On the contrary, an Agile Transformation aims to reconstruct the nature and culture of the organization to make it Agile. This process tackles the fundamental change that is to be brought for the company to be Agile. Usually, Agile Transformation starts as a pilot project with a team or two on board. Eventually, it spreads to every level of the organization. For a successful Agile Transformation to occur, there must be a complete dedication to Agile by each individual and an understanding of how to integrate agility into the organization by senior leaders.

Let’s see a detailed comparison for you to understand why we say Agile Adoption and Agile Transformation are two different worlds!

Agile Adoption vs Agile Transformation:

  1. Way of Working (WoW): Agile Adoption involves following Agile practices without deeply understanding the why, often leading to surface-level changes. On the other hand, Agile Transformation focuses on developing an Agile mindset and understanding the rationale behind Agile practices.
  2. Speed of Change: Adoption happens quickly with immediate implementation of Agile practices, while Agile transformation involves a slower, more structured approach led by senior leadership like an Agile Coach or Consultant.
  3. Focus Area: Agile Adoption concentrates on implementing Agile practices without a clear vision for the future. On the contrary, agile transformation considers long-term goals, such as organizational responsiveness, collaboration, and innovation.
  4. Scope: Agile Adoption is usually team-centric, focusing on individual teams, while Agile transformation aims to instill Agility across the entire organization, including non-IT functions.
  5. Approach to Best Practices: Agile Adoption may involve copying practices from successful companies like Spotify, Amazon, or Google. On the contrary, Agile transformation requires organizations to develop their own practices tailored to their context.
  6. Organization Structure Change: Agile Adoption may not require significant structural changes, often maintaining existing hierarchies, whereas Agile transformation often necessitates organizational restructuring for optimal Agile implementation.
  7. Cultural Change: Agile Transformation leads to broader cultural shifts across the organization, while adoption may only impact the specific team implementing Agile.
  8. Output: Agile Transformation focuses on delivering higher value to customers. However, Agile adoption primarily aims to increase productivity and efficiency.

In easy terms, agile adoption can be seen as “doing agile” and agile transformation as “being agile”. Therefore, Agile transformation is a test of patience, tenacity, and perseverance. Those who play the long game of transformation reap long-term benefits of ROI, customer satisfaction, and employee retention. Agile Adoption, on the other hand, gives immediate returns in terms of project success. Which one to choose, depends on the objectives and bandwidth of the organization.

Why are Agile Transformations needed?

Businesses must be able to provide product increments to customers quickly and reliably in order to stay ahead of the curve. More significantly, they should be flexible and capable of responding to client feedback. This implies a shift away from the prevalent method of organizing, controlling, and funding activity. This is where Business Agility comes in.

Agile transformation yields many different benefits for businesses. Short-term benefits include heightened productivity, increased process efficiencies, and bolstered team morale. Long-term benefits are customer satisfaction, business profits, and retention of self-organizing and empowered employees. Moreover, trust and respect, core values of the Agile Manifesto, are ingrained in the teams. The teams become adaptable to change and ready to tackle impediments on the go. As a result, there is better teamwork, efficient workflow, adaptive and customer-centric practices, and ultimately better outcomes. Therefore, Agile Transformations are needed to function smoothly as an organization in the face of challenges and setbacks. As a bonus, there are innovative ideas and a swift decision-making environment that fosters further continuous improvement.

Agile Transformation Process: An Overview

Agile Transformations are a massive undertaking. Hence, smaller pilots are typically performed before an organization-wide rollout. The Agile Transformation process involves reshaping teams, processes, and organizational culture to embrace agile methodologies and principles.  At the core of an Agile Transformation, there are 4 key pillars adopted from the Agile Manifesto.

The 4 Pillars Of An Agile Transformation Are:

  1. Individuals and interactions over processes and tools.
  2. Working software over comprehensive documentation.
  3. Customer collaboration over contract negotiation.
  4. Responding to change over following a plan.

These 4 factors must become a shared belief among the workforce.

Further, the Agile Transformation process begins with establishing a leadership team, outlining goals, and developing a roadmap. The strategy for Agile Transformation is based on an understanding of the organization’s current state and the desired future state. Moreover, organizations must weigh how much they prioritize predictable delivery compared to the ability to adapt to change. Striking a balance between these two aspects is essential. Understanding whether the organization is operating in an emergent ecosystem (focused on discovering customer needs) or a convergent ecosystem (emphasizing making and meeting commitments) is vital. This insight helps tailor the agile approach to align with customer expectations.

Agile Transformation can be simple for small businesses since getting everyone in the same room and creating a shared understanding can achieve alignment. However, an Agile Transformation must be properly planned for large complex organizations with legacy tech (and more often than not, resistance within employees). Let’s check out some common steps to achieve organizational agility in the next section!

Steps To Achieve Organizational Agility

While each Agile Transformation is unique, most organizations go through the following Steps:

1. Assess your Current State and Gather Insights.

Start by conducting a thorough assessment of your organization’s current state. Evaluate aspects such as the company culture, leadership processes, and awareness of Agile principles. Engage stakeholders, and conduct research through methods like surveys, diary studies, or card sorting. Ideally, you must go on a ‘listening tour’ to gather insights from across the organization.

2. Form a Leadership Team to Drive the Agile Transformation.

Establish a dedicated leadership team consisting of executives, managers, agile coaches, and value stream consultants, who will spearhead the Agile transformation. Draw inspiration from successful Agile implementations in other organizations, and leverage the expertise of industry leaders to refine your approach. Ensure that the entire team is crystal clear on the Vision and Outcomes that need to be achieved through the Agile Transformation.

3. Create an Agile Blueprint for your Company’s Future.

Develop a comprehensive Agile blueprint that outlines the goals, strategies, and processes for your Agile transformation journey. Define your organization’s ultimate vision. Moreover, focus on areas such as value creation, organizational structure, team alignment, foundational adjustments, and the scope of the transformation. You picture your path to Business Agility based on the information you have now. Then, as you proceed with the transformation, you must make adjustments and tweak the Agile Blueprint as necessary.

4. Choose the Right Implementation Model.

Select an implementation model that best suits your organization’s needs and readiness. Evaluate options such as step-wise, all-in, or emergent approaches. You must keep factors such as organizational culture, resource availability, and desired pace of transformation in check while selecting an implementation model. Ideally, it is good to go branch by branch in case of an Agile transformation. And, for a tailored practice that suits the exact needs of your organization and individual teams – you can adopt the Disciplined Agile toolkit. This helps you pick and choose, and cut and alter among hundreds of practices to find your best pick! Ideally, you should start small, with a pilot project of sorts. Then you can gradually implement it to a few more teams and spread it across the organization.

5. Kick-off with an Agile Pilot Project.

Launch a pilot project aligned with the objectives outlined in your Agile blueprint. Use the pilot project as a testing ground. You must assess feasibility, identify challenges, and gauge the value of Agile practices. Set clear goals, establish a timeline, and regularly evaluate progress to refine your approach.

6. Scale and Refine Agile Processes.

Once the pilot project is successful, begin scaling Agile processes across the organization. Use the implementation model you’ve selected to proceed with Scaling Agile across the organization. Make sure that you define value streams, enhance communication channels, replace outdated processes, and align goals to support the blueprint. “People” will be the focus as you refine your Agile processes, so ensure that your teams are faring better with Agile adoption.

7. Strengthen your Organizational Backbone for Agile.

Ensure alignment between Agile processes and organizational structures to support long-term transformation. As the Agile transformation begins to reflect the vision defined, you must have systems in place to sustain the progress. The biggest threat to Agile transformations is that businesses are not able to maintain the outcomes in the long term. Your organization’s backbone for agile must address decision-making processes, planning mechanisms, role definitions, risk management strategies, technology infrastructure, and budget allocations.

8. Invest in Ongoing Training and Education.

Prioritize continuous learning and development by implementing comprehensive training programs. You can request Corporate training sessions to upskill your teams. ProThoughts offers Agile Corporate sessions led by experts in the field. Our experts coach your teams at your workplace itself, so you don’t have to worry much about accommodations or so. You can set clear objectives with us,  create a personalized plan with our consultants, and have your teams trained based on your requirements. This investment can result in multifold value when your teams gain the knowledge and skills to function in Agile environments.

9. Cultivate an Agile-Friendly Company Culture.

Cultivate an organizational culture that embodies Agile principles and values at every level. Align leadership behaviors with Agile practices, promote collaboration, transparency, and adaptability, and encourage a growth mindset that embraces experimentation and learning from failure. If Agile values are embedded at the very core of the company, this new culture will cultivate the progress of the transformation further.

10. Prepare for and Address Common Challenges Head-On.

Proactively identify and address potential challenges that arise during the Agile transformation journey. Develop robust mitigation strategies for common obstacles such as resistance to change, organizational silos, cultural inertia, dependencies, and the risk of superficial adoption of Agile practices. The leadership team must be at the forefront to tackle any occurring challenges, to build a culture of resilience and to support the organization completely.

Metrics for Measuring Agile Transformation Success

You can use these metrics to track the progress of your Agile Transformation process:

  1. Cycle Time (Speed):

    This is one of the primary metrics to be tracked while measuring the progress of an Agile Transformation. Since Agile focuses on the speed of value delivery, tracking the time it takes from when the teams start working on an assignment till it’s finished gives more perspective. As the cycle time reduces with Agile adoption, you can figure that the Transformation is taking a successful turn. On the other hand, if it sees drastic increases, then you might have to check on your teams. They might be facing challenges or setbacks in this case.

  2. Planned to Done Ratio (Predictability):

    You can measure the predictability of your teams with this ratio. This is to see the planned timeline versus the actual time it took the teams while being Agile. You can measure it by checking the number of things the teams committed to finish at the end of the sprint, with the number of things actually being done. This helps you check if the teams are able to work on their committed schedules and if there are any factors that hinder it.

  3. Defect Rate (Quality):

    Defects impair the quality of products delivered and impair customer satisfaction. One of the major goals of an Agile transformation is to attain better customer satisfaction. Therefore, you must assess the defect rate once the product is delivered. If your team’s velocity is hindering the quality, it is time to modify your plans a bit!

  4. Employee Satisfaction Score (Stability):

    Since this Agile Transformation is new to the teams, it is vital to check their “Health metrics” as you proceed further. Allow the employees to be open with their feedback through anonymous surveys, questionnaires, etc. Track the numbers in each sprint, to see improvements or declines in patterns. If you see a good cycle time, low defect rate, and a good planned-to-done ratio, but your Employee Satisfaction Score is low – then your organization’s stability is at risk. This health score is one of the most crucial metrics for sustained progress in your Agile Transformation.

Why do Agile Transformations Fail?

While so many organizations attempt to go Agile completely, most of them tend to fail. But, there are some common patterns to this failure. We will list them down here, so you can be wary of them!

Resistance to Change:

An agile transformation is simpler said than done. It is a very major shift for the teams and employees involved. If the business was focused on traditional methods earlier, it may be difficult or distressing for people to jump to a completely new and foreign mindset. 

Communication Challenges:

Agile at an organizational level requires that all employees completely adopt the Agile manifesto’s fundamental tenets: collaborate and communicate effectively. The Agile teams need to be flexible, be open to trying new ideas, and communicate often. If the employees were accustomed to working in silos, and continue to do so, the transformation process might take a hit.

The Lack Of Clarity On The Bigger Picture:

While the leadership might be keep on Adopting Agile and transforming the whole business structure, not all teams might be on board. Keep in mind, that ALL your teams need to be agile for it to be a successful agile transformation. So, the idea of “customer-centricity” and “speed” might not be as easy to comprehend for teams that don’t face the customer directly. This happens primarily because the “Bigger Picture” is not correctly communicated to them.

Change In Leadership:

This can be one of the major contributors to the failure of Agile Transformations. Although Agile promotes a flat hierarchy, there is a need of a top-most level to drive the transformation efforts. The mindset, blueprint, urgency, dedication, and culture built by the previous leadership might not be sustained in the same way by the new one. The new leadership may not agree with the current structure or wish to invest the necessary time and resources. Thus, transitions in leadership might delay the progress or reverse some of what has been accomplished.

Lack of Persistence:

Most project leaders and business leaders have come to realize that being Agile doesn’t work well if it’s only done in partial segments. Yet, most businesses work on some type of scrumfall while working towards their Agile Transformation. But, you are either agile or you are not. It does not hold a halfway house concept. Therefore, it is the responsibility of the business leaders to be persistent with the Agile Adoption as well as the continued Transformation of all branches.

What Must Management Do for a Successful Agile Transformation?

We discussed what leads to the failure of Agile Transformations. So naturally we should also discuss what you can do more to fortify your Agile Transformation. Here are tips for the upper management to apply while setting sail on the transformation journey:

Bring in an Agile Coach:

An Agile Coach is the guiding light of an Agile transformation. Therefore, bringing one on board can significantly contribute to the success of the initiative. An agile coach can guide management in understanding the difference between traditional reorganizations and agile transformations. This coming from a competent, qualified, and often certified professional carries weight. A certified Disciplined Agile Coach can help tailor practices to the exact context of the business and teams. This enhances the chances of the Agile Transformation succeeding. Agile coaches tackle problems head-on, keep track of progress, and inspire everyone to keep learning. Moreover, they teach teams how to work together better and make the workplace feel safe for everyone. 

Create a Safe Space:

Embracing a culture of openness and transparency is vital for an Agile Transformation. By creating a safe environment, you empower the employees to actively participate in shaping the transformation. Involve all employees in identifying and implementing changes helps create a sense of ownership and commitment which is one of the fundamentals of embracing Agile. Moreover, the management should trust the teams with self-organization and dissolution, and not resort to micro-management.

Deal with Uncertainties Openly:

Unlike traditional top-down approaches, agile transformations must tackle uncertainties with open communication. Management should trust the teams to address uncertainties and avoid hiding information to maintain trust and transparency.

Use the Right Agile Metrics: 

While metrics are important for measuring progress, they should serve as a basis for discussion rather than strict targets. Agile metrics should be reflective and discussed collaboratively with teams to ensure they are meaningful and drive improvement.

Be Realistic:

Accept that mistakes and setbacks are part of the transformation process. Budgets and timelines should be flexible to allow for adjustments and learning from failures. Regular reviews and modifications based on new insights are essential for an agile way of working to flourish.

Get Agile Training For Your Company! Scale up Agility with expert guidance:

Takeaways

We hope we have covered all about Agile Transformations in this blog. To look upon the important points, organizations can become more responsive, do more with less, and better meet the needs of their client after an Agile transformation. Although most businesses today are keen to undergo the Big Transformation, it is quite difficult to persist through the process. It needs a lot of time, resources, and support to be done properly. However, with the right people leading the teams, the right Agile Mindset, tailored practices, and a super awesome workforce, you can take this challenge head-on! As for the method to implement, Disciplined Agile says “Choice is Good”, so keep your mind open for all that’s to come your way!

FAQs:

1. How long does agile transformation take?

An agile transformation takes more than a year to settle in within teams. The software teams at Microsoft also took about a year to start delivering (correctly) according to agile sprints. All teams must have agility in their veins to achieve it at an organizational scale. Therefore, it might take years of consistent work as well as dedicated efforts to fully function as an agile organization. The moment you think you are “done” with the transformation, the journey to declining begins. Amazon Founder Jeff Bezos calls it “Day 2”. He says, “Day 2 is stasis. Followed by irrelevance, followed by an excruciating, painful decline, followed by death. And that is why it is always Day 1 (at Amazon).”

2. Who leads an Agile transformation?

Agile transformations are led by Agile Coaches and Value Stream Consultants in an organization. Agile coaches direct the teams with the right practices that suit their way of working. On the other hand, value stream consultants guide the improvement of the enterprise value stream and lead the process of scaling Agile to the entire organization.

3. How do you measure the success of an Agile transformation?

The success of an Agile Transformation should not be directly measured as revenue or profits in its initial phases. Rather, you should measure the transformation as improvements to efficiency and speed, engagement of employees (through new ideas they bring to the table), rate of adaptability, and response to change. Moreover, agile transformation success must be measured by the level of customer-centricity of your approaches and your product quality. 

Of course, businesses aim for profits. But, without taking care of the other metrics, it’s a tough call. But once you’re doing well on these not-so-numeric factors, you are sure to have a significant positive impact on your revenue!

4. How many Agile transformations fail?

Approximately 47% of Agile transformations fail. This is because, for a transformation to occur, all the different mindsets and ways of working of ALL teams of an organization must shift to the Agile Paradigm. Without consistent and sound guidance, the teams usually go back to business-as-usual, leading to an unsuccessful agile transformation.

5. What is the No 1 reason Agile transformations fail?

Putting it straightforward, the lack of knowledge about Agile – both theoretical and practical, is the primary reason why Agile transformations fail. Most teams other than product development have no experience working with Agile methods. Therefore, the leadership should introduce the “Agile Mindset” to them first rather than push them into new practices.

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