When businesses succeed at agile, they thrive and get financial success. That’s the simple fact that came out of our global survey of 500 business executives, The evolution of the agile organisation. The top 10 per cent of businesses by financial performance are 30 per cent more likely to have agile characteristics.
But real and sustained organisational agility is still a challenge for many companies. Three out of five business leaders know they need to change now but are struggling to get started. Our survey shows that:
It's not surprising. Agility is a big leap in the way we work. It is also a leap into the unknown. Agile methods can appear scary for managers who have spent years developing a function and employees who worry that they may not have the right skills to work that way. So, efforts often fall short.
Here are three common pitfalls that arise during agile transformations and what you can do to avoid them.
1: Inside-out thinking
Businesses that don’t succeed in agility put their organisational needs first. They focus on following internal processes and delivering new products without paying attention to what it means to those who buy the products or services.
If you want to succeed, focus on and listen to your customer. Position your organisation at the centre of their universe, ensuring co-creation and prioritisation based on their feedback. It's not just about finding out what customers want, it’s about involving them in product development. Test minimum viable products, in the form of prototypes, with the customers and use the feedback to determine whether to scale it.
2: Centralisation and retention of silos
Companies that fail to go agile do not have the courage to change their heavy governance and decision-making processes. They operate hierarchically with a high degree of centralisation, which causes waiting time and queues in the system, and no one does anything but what they have always done. We see some companies that introduce agile practices, but do not want to simplify governance and processes, which frustrates agile teams. Other barriers are that function areas make up silos and people do not work together across the value chain in cross-functional teams.
To succeed in becoming agile, you need to focus on simplicity as a design principle - establish a flat organisation that enables teams to build, test, adapt and implement. You need to improve time-to-value by making decisions and mobilising quickly in response to competition, rolling out improvements faster than your competitors, and investing in going from idea to launch quickly. It is about creating small, self-organising teams that work together on specific customer outcomes. Agile teams on similar missions are grouped into agile release trains of up to 150 people. It makes it possible to work around the customers' problems instead of putting people into siloed functions. And it has helped our customers to get products to market faster.
3: Stick to what you know
Non-agile companies do not look forward and accept short-term thinking. Meetings become scrums, people talk about iterative work in their emails, but the work is not done any differently. The agile working methods and events are customised and adjusted as required. We see companies that have developed their own version of an agile handbook, with too much adaptation and interpretation to provide the intended benefits.
If you want to succeed with agility, build modular digital systems that can easily adapt to respond to changing demands. Search for and accept changes at any time in the development cycle. And build teams that are good at managing change. Choose an agile framework and stick to it as much as possible - it's a collection of best practices that work.
We believe in the power of ingenuity to build a positive human future in a technology-driven world. As managers, we have never had a better opportunity to truly understand our customers' motivations, to create brilliant products and services with innovative technology, and to find creative and effective ways to engage and empower our employees. Through our work in leading C20 companies, we have seen how organisations can achieve significant benefits and deliver higher performance by avoiding these pitfalls.
Did you know the top 10% of financial performers are 30% more agile than the rest?