Welcome to the part 3 of the original series on digital transformation and in this article, we focus on the agile business transformation as an essential phase of digital transformation.

In the figure below, there are three distinct phases of innovation and disruption.  In the Installation Period, many entrepreneurs compete, but few reach a turning point to deploy their product and capture the market.  Now in the digital era, unicorns like Amazon and Netflix lead the market.  We need to learn their lessons so we can survive the turning point!

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What is Agile Business Transformation?

Agile business transformation is the process where a traditional organization with a hierarchical, siloed operating model learns to be more cross-functional and collaborative, allowing flow of value across the silos in the hands of the end customer.  Typically, as shown in the visual, we have the agile and lean driving the work for the digital systems, which drive the business solutions across departments like legal, marketing, operations, finance to generate value

“Those who master large-scale software delivery will define the economic landscape of the 21st century. Mik Kersten (Project to Product)”

Agile business transformation is the process where a traditional organization with a hierarchical, siloed operating model learns to be more cross-functional and collaborative, allowing flow of value across the silos in the hands of the end customer.  Typically, as shown in the visual, we have the agile and lean driving the work for the digital systems, which drive the business solutions across departments like legal, marketing, operations, finance to generate value

“Those who master large-scale software delivery will define the economic landscape of the 21st century. Mik Kersten (Project to Product)”

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Real-life Examples of Agile Business Transformation

  • BMW Group’s CEO expects that in their future more than half of its R&D staff will be software developers.” (Mik Kersten, Project to Product)
  • “Amazon and Whole Foods Merger to Introduce Cross-Platform Selling and Lower Prices” (Forbes, August 2017)
  • The market cap of Tesla ($43B market cap, $21B revenue) now exceeds the market cap of Ford ($36.2B market cap, $160B revenue) 8:1 value ratio (September 2019)
  • Apple is now the biggest watchmaker in the world (Investopedia 2019)

In all the above-mentioned samples, the market is being captured by outside-the-box thinkers.  Any organization that aspires to be successful in this disruptive world needs to be digitally savvy and embrace agile business transformation.

How do we begin the agile business transformation?

“I want to get on board with the agile business transformation. Tell me more about it!”

Agile and Lean approaches foster collaborative cross-functional team behaviors that allow quick turn-around of requirements and ideas into a hypothesis driven model that gets refined continuously via feedback from the intended customers/users.

“It’s a familiar scene in organizations today: a new competitive threat or a big opportunity emerges. You quickly create a strategic initiative in response and appoint your best people to make change happen. And it does—but not fast enough. Or effectively enough. Real value gets lost and, ultimately, things drift back to the default status. The solution is to not trash what you have but build upon it a new system that allows you to work in a dual system” John Kotter

Five trademarks of an agile organization are as follows

  • Strategy – North Star embodied across entire organization with shared values and vison at all levels.
  • Structure – Network of empowered teams who work well as a cohesive unit being self-organized to deliver value
  • Process – Rapid decision and learning cycles via agile sprints and releases
  • People – Dynamic vibrant people model that is passionate about what they do
  • Technology – Next Generation Technology – cloud, DevOps , digital

Agile Transformation Archetypes

  • Step-wise – Skeptical leaders, Pilot over Big Bang, Typical cycle time 2-3 years for complete transform
  • All-in – Convinced leadership, pilots or waves of transformation across multiple divisions
  • Emergent – Bottoms-up approach with teams finding their own agile ways of working and scaling across the organization

Typical Blueprint of an Agile Business Transformation

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Enterprise Agile Culture and Leadership

  • Agile Anti-patterns
    • An Anti-pattern is an activity or behavior that stops, prevents, slows-down, or compromises the:
      • Production of a product
      • Delivery of a product
      • Quality of a product
    • Common kinds
      • Too Fast – The organization rushes into agile transformation with no road-map or strategy
      • Too Slow – The organization is forever planning and strategizing with little implementation.
      • Command and Control – Agile is an order from leadership to be obeyed
      • Treating Agile transformation as waterfall project – We need to be agile in 12 months and need status update each month on the progress
  • 5 Secrets to Scaled Agile and agile manager
    • Agile Leadership
    • Focus on People management
    • Agile Structures
    • Strong Purpose
    • Agile ways of working
    • Frameworks to Scale Agile
      • Scrum
      • Kanban
      • Scrum of Scrums
      • Scaled Agile Framework SAFe
      • Large Scale Scrum Network LeSS
      • Nexus
      • Scrum@Scale
      • Disciplined Agile DA

If you would like support and guidance with your digital transformation and agile adoption, please reach out to us.

About the Author: Ram Kollengode is an agile coach and digital transformational consultant with more than 30 years of experience across a variety of sectors like Banking, Insurance, Telcom etc. Ram is passionate about agile mindset and enjoys time mentoring and training on embracing agility.