As the business world increasingly shifts to agile ways of working, Kate Eriksson explores its nuances and the key considerations for organisations that are making the transition.
A changing business marketplace has led one of Australia’s big four banks, ANZ, to last week announce that it’s turning agile.
ANZ is certainly not the first to do so. Most of our banks here have adopted, to some extent, this new way of working¹, as have organisations across many other industries. Since about 2010, the business world has increasingly turned to agile as a panacea to some of its most pressing problems. It holds a fascination for many, and even here on Digital Pulse my articles on agile are a more popular subject than most.
What do you mean by ‘agile’?
The shift to adopt agile ways of working is driven by a range of factors: the positioning of the customer at the centre of the organisation, competitor activity, or the propensity to update services frequently (Amazon is said to deploy code every ten minutes²) to suit fast-evolving circumstances.
The switch to agile is a shift: away from hierarchy, to a team-based structure; from specialist silo departments, to cross-functional groups; from seniority directing work, to empowered teams led by a scrum master. From leadership down, agile is taking hold.
Scaled agile is an approach that enables organisations to scale agile from technology projects to throughout the entire organisation. Those who are now agile at the core include Spotify and Google and, more recently, large financial services companies such as ING and ABN AMRO.
The PwC perspective on agile
My view on agile comes from a cross section of perspectives, having worked with clients in business, digital and design, and across the cultures of several countries. But beyond this, agile is core to the way we work at PwC, as an organisation of multi-skilled people that form, deliver, review and disband as a core pattern of our business. Also, our breadth of experience – from people and culture, though to design capabilities and project delivery – means I’ve seen agile transformation from all angles.
So assuming agile is a good set of principles for the way organisations think about work (which it is), here are three sets of considerations for businesses seeking to make the shift:
What do agile organisations do (other than agile) to be successful?
When a business ‘goes agile’, what else is part of that transition? What elements go hand in hand for organisations to be fit for the future?
The world’s best brands and digital companies have a strong design component which occurs before agile sprints typically take over. The design phase is the conception of new products, services and business models which, once conceived and validated, move into agile sprints.
“You can’t just ask customers what they want and then try to give that to them. By the time you get it built, they’ll want something new.” Steve Jobs
For example, you could decide you need to redesign the washing machine. Agile could be applied to the endeavour, but 12 weeks later you’ve redesigned the washing machine and still it doesn’t sell. Why not? What if you found out that what the market needed was, in fact, iron-free shirts? Agile is a way of delivering more efficiently – but you must make sure you’re solving the right problem in the first place. Often, these services are designed for customers though rarely did customers actually request them.
In addition to moving to agile, being competitive increasingly requires targeting an international marketplace. Not in the sense of physical expansion of the existing business, but offering a product or service that at some level has the chance to serve a market not constrained to borders – think Apple, Paypal, Google or Spotify.
This is because, if a need applies to a million people, it likely applies to tens of millions of people. Global products also have the benefit of a network effect of customer feedback and continuous improvement, as well as scale increasing return on investment.
Few Australian companies are truly global businesses or have an aspiration to be (though there are some exceptions, such as Atlassian). In the software driven world, this must change.
Though their success is arguably down to a combination of factors, other notable characteristics of organisations that operate with an agile setup are the ability for a strong customer-led brand, vision and purpose (Disney); simplicity and new business models (Netflix, Airbnb); expansion into new adjacencies and the openness to work with other partners, platforms, and data.
What should organisations think about when transitioning to agile?
Leadership support for the transition is critical
First, comes the leaders’ own deeper understanding of what the transition to agile means for them, their leadership style and the culture of the executive team. Critically, it’s an opportunity for executives to gain new skills in customer centricity and agile methods such as kanban, user stories, and prototyping.
Leadership must be skilled in a way that’s pragmatic. An agile environment is not just about doing things faster. It demands a shift in the operating structure, unplugging from traditional ways of thinking and embracing a more collaborative and less managerial culture. Leaders, therefore, need to be taught a lot more than just the technicalities of the agile approach: they must be equipped to embrace and encourage the new mindset.
Clarity should extend beyond leadership. Everyone in the organisation should be informed about the purpose of going agile so they focus on the real outcomes, not merely the process of going agile.
Consider how agile you need to be
There’s a common misconception that the options available are to use either agile or traditional (waterfall) approaches. Instead, there’s a spectrum of agility; pure agile may or may not be the right end state for every part of your business or business functions.
The spectrum of practices stretches from waterfall to agile: low flexibility to high; from periodic to continuous governance; specialised team composition to multi-functional.
Understanding the organisation’s strengths, weaknesses and aspirations will help to determine where maximum business agility can be achieved and which tools and practices yield the best business returns.
Instead of trying to oversee which people do or don’t have the capabilities to join a particular team or project, in the early stages let those that are most ready self-select for the first squads. More often than not, teams that self-select rise to the top: in our experience, those that put their hand up will be self-motivated to learn and champion change.
Another way of accelerating the benefits of agile is to make a support capability or set of learning tools available to everyone in the organisation. Whether it’s online training, conversation packs or coaching hubs, these enable people to immediately incorporate agility into their mindset and, importantly, self-serve in the way they think about applying agile to the way they work. There are bite-sized training platforms such as Pluralsight that support continuous learning, led by the employee.
The outcomes of an agile workforce
Igniting the employee spirit
This phase of companies transitioning at scale to agile coincides with the vision for employees to lead organisations into the next phase of growth. Neither agile nor organisational transformations should ‘happen’ to people. It’s a way of working which, coupled with the right mindset, is less likely to become obsolete or automated over time.
Upskilling the workforce and economy
It’s vital that Australia’s workforce is transformed quickly so it’s truly positive to see leadership accelerate the ambition to re-skill large numbers of our workforce. Availability of key skills is one of the top concerns for CEOs around the world – 77% say they are somewhat or extremely concerned about it. Agile is helping to build the skill sets that modern businesses so desperately need.
Agile and the future of work
The future worker is one that will have many jobs, switching industries, following a non-linear career path. This is what’s being established by agile: it forces you to form, do the job in a cross-skilled team and disband.
Finally, if done well we will have a well balanced, empowered employee experience as well as customer satisfaction. Agile is a fun and sociable way of working. It encourages diversity of thought, authenticity, supports a sense of belonging, clarity and ownership of work. It brings to life a way of working smarter, not harder. Isn’t that something everyone’s hoping for?