Solutions

Enterprise agile transformation

How to succeed in your transformation

In an era when 65% of Fortune 500 CEOs are struggling to keep up with the rapid pace of technological change, organizations of all sizes and across all business sectors must take a deeper look at how they run their businesses and develop products if they hope to adapt and thrive in this age of uncertainty.

Enter agile.

Agile is a way of working that emphasizes iterative planning and delivery. With roots in product and software development, agile aims to meet business objectives and deliver value to customers early and often. In a nutshell: agile enables organizations to better respond to change and manage uncertainty.

“Going agile” is about more than technology. It involves looking across the entire organization—from business to technology, funding to real estate.

For this reason, it’s designed to be viewed as a transformation—a series of incremental changes, made over time, resulting in long-lasting effects. This approach makes it more scalable for large enterprises.

Scaling agile and making it work for large enterprises is challenging. Enterprises are different from startups: they often operate in a highly complex environment, are governed by a multitude of regulations, and have inherited legacy systems and organizational structures. Therefore, what works for startups may not apply to large complex organizations.

Make no mistake—agile is not easy, and it doesn’t happen overnight. That said, when executed correctly, it’s proven to make the inevitability of change not only manageable—but rewarding as well.

Our enterprise agile transformation framework

If you’re thinking about going agile, or if you’ve already started down that path, we recommend thinking about your transformation using a framework that focuses on five key areas: strategy, governance, people, processes, as well as technology and operations.

Having used this framework with many of our clients—across various industries and businesses of varying sizes—we believe this holistic approach is the best way to achieve strong results faster, with happier people.

To drive a successful agile transformation, there needs to be alignment with the organization’s overall strategy. For this to happen, you need to answer three important questions:

  • What are your business objectives?
  • What are the problems you are trying to solve?
  • How will agile help?

Answering these questions involves rethinking all aspects of how you run your business.

  • Vision and purpose: prior to committing to a transformation plan, executives and transformation leaders must understand the problems they are trying to solve and the goals they are trying to achieve. Organizations can fall into the trap of deciding to go agile because it’s the trendy thing to do, without fully understanding the “why.” Aligning on a vision and purpose will help establish the tone and speed of your transformation, as well as shape your communication strategy. Having a clear vision for your transformation is a critical first step to gain commitment from your people.
  • Executive ownership and alignment: it’s important for executive teams to be actively engaged in an agile transformation. In addition to understanding and aligning themselves with the changes that will come during and as a result of the transformation, they must also be willing to lead by example—by changing how they operate, improving transparency, and taking steps to create an environment of trust. Ideally, the organization should designate a single executive to drive the transformation, as “ownership by committee” has rarely seen favourable results. In addition, the organization needs to cultivate champions to drive the execution of the transformation.
  • Agile transformation roadmap: having a living, breathing roadmap that guides your transformation journey is critical, as most agile transformations are often multi-streamed, time-consuming, and involve various groups that may not have worked together in the past. Each enterprise’s transformation and transformation roadmap will be unique depending on its objectives, strategy, culture, and level of agile maturity, among other factors. A successful roadmap charts out the journey from your current state to your intended target state while listing out major intermediate steps. At the same time, your roadmap cannot be prescriptive. It needs to be flexible so that you can continually and proactively adapt throughout your journey.
  • Business and technology roadmap: the success of your agile transformation hinges on the synchronization of your organization’s business and technology operations. To better understand this relationship, consider the context of product development. In this example, the business owns the vision for the evolution of products and understands how their products will ultimately drive business outcomes. Technology needs to understand the vision so it can define the capabilities and technologies best suited to enable those business outcomes. By working together to keep their respective roadmaps in sync, business and technology can strike the right balance between predictability and flexibility to pivot when necessary. As your agile organization matures, your business and technology roadmaps should converge into one. When there is misalignment between business and technology, it can become a distraction and slow down product delivery and your transformation.
  • Business outcomes and key performance indicators (KPI): if you can’t measure it, you can’t manage it. Ultimately, every minimum viable product (MVP) should be linked to a product KPI, and every KPI should be linked to a core business objective. By tying initiatives to business outcomes, you increase transparency and accountability at all levels. This results in a more effective investment of your resources. With the launch of each MVP, you need to be relentless about measuring KPIs and sharing the results enterprise-wide, good or bad. This creates a culture that is fundamentally rooted in achieving business objectives.

Governance plays an important role in managing the interests of various stakeholder groups, particularly in large organizations that are highly regulated. In large enterprises going agile, governance structures do not go away; rather, they need to adapt to support the organization’s new way of working.

  • Funding: to better understand funding in an agile environment, imagine your finance function operated as a venture capitalist firm. Instead of funding a new risky project upfront, finance provides a small amount of funding at first—enough to validate the business problem you’re trying to solve and to determine the feasibility of your expected outcomes. Additional funding is provided when the product team is able to prove that its product provides value to the customer and generates a return. The concept of funding in agile is essentially funding that is proportionate to risk and can help drive a culture of test and learn within an organization. To realize the full benefits of agile, however, you may need to consider moving away from project funding and towards the funding of stable teams. This will transform your funding process into a prioritization exercise to order your product backlog based on outcomes.
  • Enterprise planning: there is a misconception that there is no planning in agile—but this couldn’t be further from the truth. Traditionally, enterprises take a big bang approach to planning by doing it once a year. The problem with this is that it does not allow for enterprises to adapt to changing business needs and market conditions. In agile, planning is done more frequently and aims to foster the delivery of activities across multiple teams, systems, and lines of business. Often, it involves the use of the Enterprise Kanban Board (EKB), a useful tool that helps organizations visualize the flow of work across multiple teams as well as facilitate regular planning and coordination. The EKB increases transparency by highlighting dependencies that need to be managed and exposing potential bottlenecks or risks that need to be mitigated. Understanding your bottlenecks is an important first step to improving your delivery process, as it allows for greater planning predictability.
  • Risk and compliance: when agile is done right, an organization should be able to deliver its products and services faster while achieving all risk, regulatory, and compliance objectives. To achieve this feat, risk and compliance functions do not necessarily have to change their objectives, but they do need to think about how to achieve them differently. In large enterprises, risk and compliance boundaries are typically not well understood, resulting in a tendency to play it safe by relying on rigid gating and review processes. To successfully go agile, organizations must challenge these traditional lines of thinking by asking themselves tough questions, such as: “Why does a particular gating checkpoint exist?”; and “What is the spirit of the underlying measure that necessitates this process?”
  • Agile Centre of Excellence (CoE): the agile CoE is a team of agile leaders, champions, coaches, and change agents that spearhead the agile transformation journey. Its mandate is to serve teams, middle management, leadership, Communities of Practice (CoPs), and the enterprise with expertise and knowledge on Agile. The CoE oversees the design and execution of the agile operating model, continuously seeks to improve it, and empowers leaders and people within the organization to own the agile transformation.
  • Agile operating model: each aspect of an Agile transformation is interconnected, making it difficult to know where to start. The agile operating model serves as a blueprint to help organizations define their desired change. The model needs to be holistic and incorporate all parts of the enterprise, and may include contextualized tools such as an agile software delivery lifecycle, agile organizational structure, and interaction models. The model considers both business and technology, and spans across strategy, portfolio management, delivery operations, support, legal, risk, and compliance. It is important to clarify that not all aspects of the agile operating model need to be defined up front—rather, it should be frequently tested and should ultimately evolve over time.

The people dimension of an organization’s agile transformation is by far the most complex. That’s because all transformations—agile or otherwise—start with changing human behaviour. To succeed, you need the support of your greatest asset—your people—and that involves starting at the top, with leadership.

Your leadership team should be the first to exemplify agile behaviours and be willing to realign every aspect of the organization to support the shift towards agile.

  • Organizational design: organizations should be flexible and support a culture of experimentation. The best way to promote such flexibility is to organize around autonomous teams instead of controlled functions that operate in silos. However, achieving that level of autonomy requires a fundamental change in organizational culture and structure to enable trust and learning in a safe environment. Leadership must evolve to provide support and guidance by establishing well-defined guardrails, rather than operate as a centralized command base. When this is achieved, this will allow you to have a network of empowered teams working toward the same outcomes, allowing your organization to more effectively compete in today’s increasingly complex environment.
  • Roles and accountabilities: traditionally, roles are defined based on individual functional contributions. When moving toward an agile organization, role definitions must evolve to emphasize the collaborative behaviours that enable team success. While it is important to clarify accountabilities and decision rights upfront to avoid role confusion, you’ll need to embrace the fact that roles will change over the course of your agile journey. Start by drafting initial definitions for key roles based on expected behaviours and competencies. These role definitions should support both the team’s and organization’s objectives. Then, help team members understand the behaviours expected of them and outline how these behaviours will ultimately contribute to team outcomes. Finally, revisit your role definitions frequently throughout your journey and rework them based on your learnings.
  • Learning, training, and coaching: certifications alone are not sufficient for an organization to become agile—learning is ongoing and should be encouraged at all levels. We've seen some organizations adopt an “apprenticeship model” where team members learn new skills by taking a learn-by-doing approach with support from more experienced colleagues. Group training sessions are ideal as a starting point to baseline this new working culture. Following this, agile behaviours and competencies are strengthened through role-based training and hands-on coaching by experienced team members that help guide the “apprentices.” Promoting a culture of continuous learning allows for greater flexibility within the organization, increased collaboration, and a more empowered and engaged team.
  • Leadership and culture: culture is derived from business leaders and sustained through actions and behaviours. Culture is a powerful competitive advantage, but it can also destroy value if it is not aligned with strategy and adapted to changes in the business environment. As organizations transition toward agile, leadership’s role in shaping culture becomes critical. When leaders continuously champion the change and model the right behaviours to sustain an agile culture, it enhances employee engagement and motivates team members to adopt a new mindset and way of working. To do this effectively, leaders must re-examine how they operate and modify their existing processes, behaviours, and norms so that they are aligned with agile values.
  • Talent and performance management: just as organizational design needs to adapt in an agile environment, so too does talent and performance management. Acquiring talent becomes more challenging since agile requires new skills, capabilities, and behaviours—qualities that are highly sought-after and difficult to acquire through traditional sourcing and recruiting methods. Growing and retaining talent needs to shift as well—for example, it may become necessary to emphasize stretch opportunities and coaching to help talent navigate new career paths. Agile companies should also consider embracing new performance management models that go beyond annual or bi-annual performance reviews and instead emphasize ongoing development conversations, de-emphasize ratings and bell curves, and balance individual and team contributions.

The objective of defining processes in an agile organization should be to promote greater collaboration and continuous improvement, rather than to control. Processes should drive consistency where it makes sense, but they should also allow for localization and innovation. For processes to be successful, they need to be contextualized to your organization and culture. Also, processes should not be set in stone and should evolve to allow the organization to adapt to changing internal and external demands.

  • Agile practices: agile is more than a methodology. It is a way of working that proposes alternatives to traditional product development. Agile brings together different frameworks, methodologies, and practices such as Design Thinking, Scrum, Kanban, Lean Startup, Extreme Programming, and DevOps to achieve business objectives and deliver value to customers early. However, implementing agile practices alone will not guarantee the promised benefits. To achieve these, organizations must adopt both agile practices as well as agile behaviours (i.e., doing and being agile). This means your chosen agile practices must be appropriate for your organization, and your people must be adequately trained and continuously coached until there is a shift in mindset.
  • Continuous improvement (CI): continuous improvement is a core tenet of agile. All mature agile organizations have embraced CI as a part of their culture. But even the organizations that rank high on the agile maturity scale must constantly improve to “be agile.” Many organizations claim to have a culture of CI. However, if they expect their people to think about and action improvements on the side of their desks, they are only paying lip service to the idea. Continuous improvement is an investment. If you truly want to be innovative and continuously improve to stay competitive, you need to set aside capacity for your people to continuously experiment and apply their learnings.
  • Metrics and measurement: defining the right set of metrics is crucial for the success of your organization and transformation. In your transformation journey, you should focus on three key sets of KPIs: product, performance, and transformation. Product KPIs tell you if you’ve delivered the business outcomes you said you would deliver (see also Business Outcomes and KPIs). Performance KPIs tell you about team efficiency and product delivery effectiveness. Transformation KPIs tell you how well you are progressing along your agile journey. Having both leading and lagging KPIs in these areas will help you achieve greater transparency and accountability within your teams, as well as with your stakeholders and leaders. The goal should be to align these KPIs with your strategy so as to drive the right behaviours.
  • Vendor management: vendor involvement can be an overlooked component of your transformation. Agile shifts the focus of vendor-team interactions, moving from handoff-heavy to incremental and collaborative interactions. This creates greater cohesion between a team and vendor, whereby outcomes and deliverables are defined iteratively over time, rather than in one upfront interaction. In a traditional environment, contracts are typically characterized by fixed scope, fixed time, and fixed budget. It’s challenging to negotiate similar contracts in an agile environment. Ultimately, such negotiations will depend on your risk appetite, your relationship with the vendor, and your willingness to accept a time-boxed outcome-oriented contract. This is also predicated on your vendor’s ability to work collaboratively with your teams and to demonstrate outcomes frequently.
  • Change management and communication: as strategies, operating norms, and talent evolve, the impacts will be felt across the entire enterprise. Leaders have a key role to play in defining the vision and objectives of the transformation and must continuously communicate the vision to all levels of the organization. People need to be aligned on the change and understand the role they play in the transformation—and leaders should regularly and deliberately communicate where the organization is in its journey and seek to manage expectations. This is most effectively achieved through an Organizational Change Management (OCM) plan which guides the organization through its change journey. Key components of an OCM include organizational readiness, leadership and organizational alignment, communication and training strategy, and stakeholder engagement. Remember, just like your transformation roadmap, your OCM is a living, breathing plan that should evolve alongside your organization.

In agile, value is placed on learning. The goal of product development should be to “fail fast to learn early.” But getting there is not easy—it requires changing how people and teams interact, redefining success, and exploring new ways to become more flexible.

  • Operations and DevOps: product development and IT operations teams traditionally operate as separate entities—one concerns itself with making the product, and the other with delivering it to the customer. DevOps is a concept that encourages Development and Operations to work together throughout the entire development and delivery process. Through greater collaboration, teams can deliver higher quality products faster.
  • Tooling: agile tools will not make you agile. However, if you are embarking on an agile journey, you may want to rethink your tooling suite—such as your project management software or testing tools—to make sure it supports your new way of working. This is also your opportunity to select tools that not only promote agile values and behaviours, but also provide a seamless experience across the organization and product delivery lifecycle. The objective of these tools should be to promote interactions between people, and they should therefore make it easier to enhance process transparency, outline expectations, and communicate roadblocks. The collaborative aspect of agile tooling steers away from micro-management and enables a collaborative environment where communication is supported.
  • Architecture: architecture in an agile environment introduces the concept of evolutionary design where, as requirements evolve, so too does the architectural design. Your architectural design should provide a logical visionary blueprint which acts as a guide for the development team. Teams are free to work within that blueprint, and leverage their creativity and innovative skills to build a better product. A vision for overall architecture is defined early on, however there should be room for continuous improvement of the architecture itself. This enables teams to adjust to changing requirements, which is a core tenet of agile development. Lastly, some core principles of architectural design in agile include identifying design patterns, developing reusable and scalable modules, developing plug-and-play components, and refactoring code and design as needed.
  • Agile workplace: an agile workplace is optimized for collaboration and communication. The physical attributes of an agile workplace include unique space arrangements and settings so team members can either concentrate individually or collaborate as a team. This requires the right mix of flexible working spaces, private working areas, and breakout spaces. Although co-location is an important attribute of agile teams, the reality is that we operate in a global marketplace and teams cannot always be co-located. Agile workplaces can accommodate remote teams through the use of electronic whiteboards, video chats, common working hours, common tools, and advanced technologies such as virtual reality.

Our approach

There is no such thing as a one-size-fits-all agile transformation solution—the agile journey must reflect your capabilities, culture, and context. After working on many transformations across the globe, we have found the best results come when agile principles are used to execute agile transformations. Furthermore, we have first-hand accounts of what works and what might not work because it’s either anti-agile or doesn’t fit the context of the organization. A couple of examples include: taking a Big-Bang approach to your transformation or taking an implementation approach to your transformation. Our agile transformation approach at Deloitte follows four key phases.

Aligning technology teams, business stakeholders, delivery partners, and leaders on the agile vision is the foundation of a successful transformation. We use an evidence-based and value-driven approach to co-create frameworks and plans for achieving the transformation through small changes we like to call Minimal Viable Changes (MVC), which maximize learning and buy-in without too much disruption. In this phase it’s important to resist the temptation to “boil the ocean.” We believe in starting small with the aim of getting alignment across the potential “lighthouse” (e.g., end-to-end line of business, business unit, etc.) that can be the initial “blueprint” and beacon of success for the rest of the organization.

Using the transformative thinking from the previous phase, we work collaboratively with our clients to develop and grow their agile capabilities. We coach our clients to resist the temptation to design for the enterprise and focus on designing for the lighthouse as a starting point. Pilot teams should then start sprinting and stress-testing drafted operating models, as well as agile practices. It’s crucial to refine these while executing pilots, so as to quickly identify potential gaps and bottlenecks in the target state process.

With the insights gathered from the pilot phase, we identify wins and challenges. This process of reflection becomes a key tool used to continuously drive new insights and improvement opportunities. The successes achieved are utilized during this phase to demonstrate readiness for repeat and scale. Now would be a good time to identify the next set of lighthouses to further enrich the agile frameworks, operating model, and practices by incorporating the complexities of other areas of the organization.

The learnings from the pilot, and learn and refine phases should help you safely navigate through future risks and uncertainties. This is done by using continued cycles to test, learn, and refine before rolling agile out across the entire organization. Prior to scaling to other parts of the organization, we work with our clients to validate minimum readiness criteria are met to ensure the organization can successfully absorb the change at every level. Happy evolving!

Meet the authors

Conor Mlacak

Conor Mlacak

Co-Lead - Canada

Conor Mlacak is a Partner in the Technology Advisory Practice with more than 15 years of experience helping organizations transform their businesses with end-to-end leadership, from program visioning ... More

Raj Mudhar

Raj Mudhar

Co-Lead - Canada

Raj Mudhar co-leads the Enterprise Agile Transformation practice with over 20 years of product development and delivery experience in Asia, Europe and North America in both hardware and software, as a... More

Carrie Merner

Carrie Merner

Co-Lead - Canada

Carrie Merner is a leader in our Agile Transformation practice. With more than 22 years of delivery experience across banking, insurance and capital markets Carrie focuses on solutions to solving our ... More

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