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Agile evolution starting with teams, scaling across programs/portfolio, and now for the enterprise
Many years have passed since Agile has become a household name globally in IT. Large organisations which previously worked in very traditional ways have now been on the journey to achieve Agility for many years. This journey has typically commenced at the grass roots in software development teams, and then has scaled up to multiple teams using agile to run large programs.
Agile has now widely been recognised as a way-of-working that enables you to define, plan, and execute against outcomes. This wider recognition has resulted in the demand for the application of these ways-of-working outside IT in business functions, such as Marketing, Sales, and Legal. With the repeated success of agile achieving faster, smarter, and cheaper customer outcomes, large enterprises have realised the need to adopt these ways-of-working across the full organisation which we call Enterprise Agility.
In this blog post, we explain why Enterprise Agility is needed to remain competitive and what Agility means at the Enterprise level.
A volatile market with innovative competitors focusing on the customer and leveraging new technologies has created pressure on existing players
The need for Enterprise Agility is driven by the current VUCA (volatile, uncertain, complex and ambiguous) market dynamics. Competitive pressures against large organisations across industries are increasing. Contributing to these pressures and the change in these market dynamics is disruption from global innovators, particularly through start-up organisations which are able to compete in new ways. They are achieving this by pinpointing lucrative / niche segments and combining these with a customer first focus and new technologies. This is lowering the barrier to entry allowing start-ups to compete at scale with traditional large corporates.
Traditional ways of the past will not stack-up against the new goal of the customer for 21st century organisations
Not only is the competitor and technology landscape changing, so are customer demands for a better, more personalised service.
With the rise of digitisation and the global economy, this has changed the information customers now have access to. This means the goal for organisations now also needs to change. No longer can an organisation prioritise their shareholders needs over their customers. They can no longer offer an average service or customer experience and see no broader impact outside that single customer. They can also no longer take months or years to provide customers with the products and experiences they want. The customer needs to be at the heart of everything they do. As the below slide presented by Steve Denning at the inaugural business agility conference in New York 2017 shows:
As customers are now more interconnected, this heightens the need for providing customers a great experience. Single customer experiences can now have significant impacts on an organisation, especially through easy-to-share channels through social media and on your mobile. For example when the recent incident showcasing the treatment of a passenger on United Airlines went viral, this resulted in United Airlines stocks dropping $1.4 Billion. (http://fortune.com/2017/04/11/united-airlines-stock-drop/) Even though stocks may have since bounced back, the impact on the brand was still felt.
While the obvious answer is to focus on the customer experience with everything we do, there are other ways organisations can change their ways of working by adopting the Agile mindset and principles more broadly. By doing this, not only will they achieve further customer benefits (some of which may be indirect), but they will also achieve direct benefits for the organisation. Examples of these are reduced operational costs, less bureaucracy, and increased employee satisfaction.
What is Enterprise Agility?
In the below diagram, we illustrate some of the values, practices to execute, and organisational areas which can be considered in a traditional organisation embarking on a journey to achieve enterprise agility:
So what does Enterprise Agility mean? We see Enterprise Agility as an organisations ability to respond to, adapt to, and even lead the market when it comes to:
Enterprise Agility however, not only focuses on the speed in which an organisation can adapt. It also considers the impacts this change has on the broader organisation. When an organisation needs to adapt, they need to be able to do this in a way that has minimal negative disruption to the organisation. An organisation which has achieved enterprise agility is also one that operates effectively and with efficiencies gained in all areas across the organisation (and continuously striving to be further optimised, as there is no end state). It is also one that leverages the next gen and innovative technology to create a digital experience for both customers and employees and maximises productivity through a high degree of automation. Ultimately, it means changing the way we do our work across all elements of an organisation, to adopt the values highlighted in the diagram above.
What does it mean for the leadership team within an organisation?
So why should leaders within an organisation focus on enterprise agility and adopt these ways of working? As the focus is across the whole organisation, there are benefits which apply across business units and their leaders in all roles. Below we give some examples of priorities of leaders and how enterprise agility can support them in achieving this:
As we can see, clear benefits exist for team members across the entire organisation to start to adopt these ways of working. However to achieve these benefits, the road to enterprise agility is not necessarily going to be an easy one, especially for an organisation with heavily embedded existing ways of working.
This is going to be a multi-year journey (and the approach to achieving enterprise agility warrants a full blog post on its own). Even though the journey is a challenging one, the benefits of enterprise agility cannot be ignored. Even more importantly, the impacts if an organisation doesn’t adopt these ways of working can no longer be ignored. If an organisation wants to be a leading organisation in the 21st Century they must embrace Enterprise Agility.