In his book, From Project to Product, author Mik Kersten describes how business leaders are ill-equipped to solve the problems posed by digital transformation. He points to the 2018 report, Corporate Longevity Forecast, which issues a “… gale force warning to leaders: at the current churn rate, about half of S&P 500 companies will be replaced over the next 10 years.”
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It’s a grim cautioning, but not surprising given the new paradigm of competition where customers no longer just compare you to your direct competitors but to the best service they have ever received—from any company. If you launch a banking franchise, you’re not just compared to Chase and Wells Fargo, your user experience is measured against Uber and Amazon.
That’s a tall order to fill. And it’s one of the many reasons why every business that wants to survive the storm must become like FedEx, which venture capitalist Marc Andreessen describes as “… a software network that happens to have trucks, planes and distribution hubs attached.” Kersten claims—and there’s every reason to agree with him—that “… those who master large-scale software delivery will define the economic landscape of the 21st century.” The most forward-looking companies are actively future-proofing for this. BMW Group’s CEO expects that in their future, more than half of the staff will be software developers.
Okay, we get it—hire thousands of software developers. But is that enough? What does it actually mean to master large-scale software delivery? Based on what’s happening in the field, we’re understanding that it takes a great deal more.
Business agility—the next big move
From an IT perspective, Agile with a capital “A” has served us well. Development teams get it, they usually like it, and when practiced with integrity and commitment, it consistently delivers results like faster time-to-market, improved quality, predictability, and employee engagement. Agile provides a great foundation, for sure, especially when combined with Lean, DevOps, and Lean Portfolio Management. And now, companies are experimenting with extending Agile beyond its IT roots and applying it to the whole business.
The idea of business agility is clearly catching fire but interpretations of what it is and how to achieve it vary. The underlying meaning, though, is something on which we can probably all agree: business agility is a competitive advantage that helps an enterprise adapt and thrive in the digital age by delivering innovative technical and business solutions in the shortest sustainable lead time.
Key ingredients for achieving business agility
Many organizations struggle to get beyond team-level Agile because they can’t agree on the roadmap. However, if you look at companies that are leading the way in this area, you’ll see a pattern in approach and capabilities:
- From C-level to marketing and HR—everyone adopts Agile
Let’s start with the idea of enterprise-wide practice of Lean, Agile, and DevOps. When every team from every unit—leadership, sales, development, marketing, HR, finance, etc.—works from the same playbook, all have their eyes on the same prize, and work together in cadence and alignment, the entire organization—not just development—is able to continually and proactively deliver high-quality value faster than the competition.
Working this way is an emerging trend and requires specialization of principles and practices for the context of the business unit. For instance, you wouldn’t expect marketing and development teams to follow the exact same practices, but there would be strong similarities.
- Build core capabilities
Industry pacesetters are building advanced capabilities in the areas of team and technical agility, DevOps and release on-demand, Lean-Agile leadership, Lean systems engineering, and Lean portfolio management. Mastering these capabilities creates muscle memory that can go far in bolstering the development and delivery machine, but even that is not enough to avoid being sidelined by faster and more nimble competitors.
- Add organizational agility
Organizational agility provides the business with the capacity to identify and capture opportunities more quickly than its rivals. This is achieved by being able to rapidly evolve strategy, organizational structures, technical and business practices, and people operations. Building organizational agility helps deliver the tangible benefits of better financial results and is an essential chapter in the playbook for achieving business agility.
- Commit to a continuous learning culture
Creating a learning-centered work culture is critical for attracting top talent and giving your workers the tools they need to be successful and grow your business. Seems logical, but it’s far too easy to sacrifice learning and development in favor of short-term wins, and it’s not unusual for an organization to view training as a one-off exercise to fill an immediate need.
This is a common cry among many of the enterprises I’ve worked with who wonder why they struggle to sustain their early wins from ‘going Agile.’ Their counterparts, however—the organizations fully committed to building a continuous learning culture—are seeing something altogether different. When an organization commits to encouraging individuals—and the enterprise as a whole—to continually increase knowledge, competence, performance, and innovation, results can be dramatic.
Deloitte reports that companies with continuous learning cultures enjoy a number of benefits, including:
- They are 46 percent more likely to be first to market
- They experience 37 percent higher productivity
- They are 92 percent more likely to innovate
The implications are clear: business agility—and all that is required to achieve it—is a game-changing approach to business, with significant bottom-line implications that should go far in helping businesses survive and thrive in the 21st century.
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