Business Agility

People mostly believe that agility needs to start top-down and that they need management support first but I know many organizations where the top-down approach failed and many others where the bottom-up approach was successful. And more importantly, I see it as a fundamentally wrong question. Agile is not about hierarchy, but collaboration and self-organization so agile needs to begin by experiencing work at small self-organized teams. As teams experimenting with an agile way of working, learning from it, and gaining their own experience and success, they develop the mindset and influence the teams around. It’s like a snowball effect. Once organizations have decent experience with team-level agility, they quite naturally start experimenting with different scaling approaches and form multi-team collaborative ecosystems where organizations usually start seeing the real business impact of the change. While experience with the agile way of working is growing through the organization, the executive team and board of directors have to get their hands-on experience with teamwork and self-organization. Although their personal experience is helpful in scaling, it became critical when agility is applied at the organizational level which usually implies changing the culture, structure, and leadership role.

It all sounds very simple, but there are a few important pieces to focus on. Agile organizations give teams higher autonomy than traditional ones, allowing them to take ownership and responsibility for their decisions and collaborate. But no collaboration is happening without trust which is the most common obstacle we are facing in the organizations. Unfortunately, the higher in the hierarchy, the harder is to gain the trust and overcome the artificial harmony. Trust is a pre-requisite for any collaboration. Transparency on the other hand is an enabler. Without it, there is no collaboration as misunderstanding and politics take over. Finally, the last piece you need to have is an evolutionary purpose which is strong enough that people are willing to give up their own individual goals in favor of the common goal.

The most usual benefits of business agility are better communication & collaboration, better ways of working, speed to market, and customer satisfaction. No surprise here. But I’m missing one which is nowadays the most common reason why organizations shift to agile. It’s innovation, creativity, and adaptability. In other words, the ability to better respond to the VUCA challenges of the nowadays world. The new world brings new challenges and requires new ways of working. The organizations which could not innovate are not here anymore. So better to start now. Business agility can make your organization competitive in the VUCA world.

Journal of Business Agility – Emergence

Recently I received a nice magazine in my mailbox, the Journal of Business Agility – Emergence. If you are looking for stories from different organizations, inspiration from agile leaders, I would recommend you to subscribe to it. Businesses Agility Institute is known for high-quality content conferences, and the Emergence magazine is a good example of very good curated content. So what caught my attention from this first issue of the magazine?

Budget planning: Prioritization – Capacity – Funding

I start with the first article where Jardena London shares her insights about Budget planning. It’s so much close to what I experienced as a Director running a software organization. “Stop talking about budget and capacity until you prioritize the outcomes you want across the organization. Even the high-level strategic goals need to be put in order.” So many organizations are unable to focus and try to push more things without a conversation about priorities. Once ordering is done “Start by planning capacity by teams, it’s way easier than planning for individuals. You may find that your current team structure no longer serves the needs of your portfolio, so you’ll have to tweak it, maybe add/ remove team.” On my journey, I learned that working with teams is so much easier than trying to plan everything with individuals. From the organizational perspective, working with individuals is too detailed and all different irregularities made it too fuzzy and unpredictable. I can also relate to this note: “Don’t plan out the year, plan the now.” In the current VUCA world, the yearly planning cycles feels outdated and unrealistic. I still remember when we went away from estimations and how enlightening it was. However, when I speak about it now, many people are almost freaking out. How can you plan your capacity without it, they ask. “When we estimate hours, we miss all kinds of variables like task switching cost, administrative time, and buffer time. We spend energy trying to get more precision in the output than we have accuracy for in the input.” Instead, in an agile environment, we focus on forecasting how much teams can produce in a short iteration. “With the same number of people, capacity can change over time. Improvements to capability and technology can impact capacity. Capacity is great for forecasting and planning.” But it’s still a concept very hard to accept not only by finance departments but also by the teams. Finally, “Once you have prioritized and planned capacity, and you’re ready to go, allocate funding. This is the very last thing we do, allowing money to be free and flexible as long as possible.” Agile is about flexibility and the ability to be change responsive. “Decoupling prioritization, capacity and funding can breathe new life into budget planning, alleviating the difficulty for employees and improving outcomes for the organization.”

Fact Sheet: The State of Business Agility in 2020

For those who like facts, numbers, and charts, there is a summary of the State of Business Agility report. “In 2020 we saw a significant increase in business agility globally. Compared to last year, we have seen more organizations commencing their business agility journey, and those on the journey report greater progress.” It’s no surprise for me, as I’m getting the same message from organizations, but it’s still good to have it confirmed with data. And it’s also no surprise that “Leadership continues to be the common theme amongst all transformational challenges.” I can see that in most of the organizations. Boards and executives are struggling with a core understanding of agility beyond practices, processes, and frameworks. Their experience with business agility is still very limited. The good news is, that there are many inspirational stories and use-cases covering every spectrum of organizational function, but still looking for an agile organization is a tough job. When I was writing my new book The Agile Leader: Leveraging the Power of Influence I was bringing in some of those pioneers to share their insights in a short story. We need more stories about the successful agile. We need more insights from their journeys. That’s the only way how to make business agility more accessible for leaders and organizations. If you are looking for three tips where to start, the report brings you three tips: “Organizations who reported higher ratings in these three characteristics also report higher overall business agility and associated benefits: 1. Encouraging a culture of learning and experimentation, 2. funding business outcomes rather than specific work outputs or projects, and 3. aligning work to customer-centric value streams.” Very true. Experiment, learn from feedback and deliver value. Looks very simple, but it’s unfortunately very hard to do in some organizations.

The agile journey of Scrum Alliance

I was watching the Scrum Alliance journey for several years, and I’m very proud of how they changed and the experiments they were courageous to take. Living the Scrum values is never simple, and being agile is a journey. “The Scrum Alliance revolution – beginning with reflection, continuing through a complete rebuild of the organization’s working methods, and ending in a revitalization of public perception.” That’s easy to be said, but hard to be done. “Before the self-organization process, Scrum Alliance had multiple departments with multiple part-time scrum teams. Afterward, the structure had been simplified to six cross-functional and cross-departmental scrum teams.” Once the change was implemented as a trainer I could see immediate value to be created every sprint. How interesting change from all the years before, where value delivery was much slower. “By changing the internal structures of Scrum Alliance, Melissa and Howard had also changed attitudes, operational standards, and revitalized the ethos of the entire organization.” It’s great to read about successes but equally important is to read about things that didn’t go so smoothly. Being agile is a journey and this article is showing the journey with all the transparency and honesty. “Most importantly, Melissa and Howard have built an organization that strives every day to practice what it preaches and embody the values and principles of Business Agility” and that’s something you don’t see every day.

And there is more…

Stories from leaders, experiences shared by practitioners. That’s all that we currently need on our agile journey as a society. Agile is not anymore a different project management method. For long ago it left the basement where the IT department was closed. It’s changing the way how organizations operate, and how they do their business. The topics of Agile Organization, Agile Leadership, Agile HR, Agile Finance, and Business Agility are everywhere. There are schools applying agile values and principles, there are governments changing their way of working. Agile is everywhere. The new generation is different, they don’t want to be told what to do, they are asking for higher flexibility and autonomy, they require freedom to choose from where they are going to work and how they deliver the value. Some organizations already figured it out and started accommodating the change. Others are picking up. “The intention of business agility is to create an organization best able to serve its customer, no matter what the future brings.” That last part – no matter what the future brings – is in my mind the most important. Imagine an organization that is flexible and fast responsive, so it is ready for any situation. What else could you wish for succeeding in the VUCA world, right?

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