Agile Transformation

Structures, Processes and Mindsets for the Digital Age

Neil Perkin

• Publisher: Kogan Page
• Year: 2019
• ISBN:
  9780749497484
• Edition: 1
• Topic: Betriebswirtschaft
• Subtopic: Organisationsentwicklung

LONGLISTED: CMI Management Book of the Year 2020 - Technology and Patterns at Work Transformed Category Traditional organizational structures and cultures are no longer fit for purpose in a digitally empowered world. The number of new and disruptive technologies is increasing, the speed of change shows no sign of slowing down and business leaders and organization development practitioners need to act urgently to enable their companies to succeed in the digital age. Agile Transformation is the much-needed guide to achieving this success. Packed full of practical advice, this book covers everything: why new operating models are needed, how to apply agile principles at scale, leveraging digital-native processes and why change managers need to think big but start small. Agile Transformation also looks at how to build and engage high-performing teams for change, how to tackle the employee mindset that can hinder agile adoption and why developing an agile business is not a reason to fail to plan. There is also guidance on how to develop fast and focused high-velocity decision making, build momentum for change, and ensure that leadership behaviours and organizational culture catalyze true organizational agility. Featuring case studies from organizations including Amazon, Netflix and Vodafone, this book is crucial reading for businesses wanting to effectively compete in the new world of work.

05

Think big

The key elements of ‘think big’

Thinking big is all about position, direction, context and foundations.

• Visioning: capturing why the world has changed, the new contexts shaping a new environment, where the business is currently, developing a point of view on what the future looks like, creating a compelling vision, communicating that vision repeatedly, generating a positive urgency for change.
• Bold, disruptive thinking: unlearning to relearn, thinking beyond incremental change, not looking at the new through the lens of the old, asking what is possible. Rather than always asking ‘why?’ perhaps we should more often be asking ‘why not?’.
• Foundation enablers: technology and data – core systems infrastructure that is scalable but flexible; a technology and data architecture and structure that empowers exceptional capability, agility, a higher cadence and a step change in experimentation; adept application of automation to drive efficiency and speed; adept application of human talent to higher value inputs.
• Foundation enablers: culture and people – empowering a culture and leadership mindset to support agile approaches; high-velocity decision-making; balancing alignment with autonomy to move fast; governance of change; creating the space for experimentation and the new.
• Context mapping: effective problem exploration; developing an understanding of the different contexts across the business, and where to DO Agile, and where to BE agile.

Visioning – setting a compelling direction for change

Generating a common language around ‘agile’ and ‘digital’

Terms like ‘agile’ and ‘digital’ have rapidly become overused in businesses and yet there is rarely a common view on what each of these things really means. If you ask a room of 20 leaders this question you will often get 20 different answers (and definitions that often themselves are full of jargon). So it is essential that every business not only develops its own understanding of what agile and digital mean, but that those interpretations are widely understood.

With agile, a company may well develop its own version of Agile process, drawing from the most appropriate facets of different methodologies. That process needs to be well understood and socialized through the business, even with teams that are not ‘doing’ Agile. Beyond this, ‘doing’ Agile needs to be supported through a common approach to developing an agile culture and mindset right across the business.

With digital, it is useful to have a common frame of reference for what it means for the business. As an example, the team that originally led the digital transformation for the services provided by the UK Government (Government Digital Service, or GDS) have described how digital: ‘is not a new function. It is not even a new way of running the existing functions of an organization... It is a new way of running organizations’.1

When the key members of that team went to the Co-op group to lead the transformation there, they created a definition that reflected a good combination of people plus technology, plus a need to change the way in which we work: ‘Applying the culture, practices, processes and technologies of the internet era to respond to people’s raised expectations’ (Bracken, 2016).2

This common language helps support clarity and alignment, but also minimizes misunderstanding.

Creating a compelling vision for change

Company visions or missions are too often vague platitudes that could well apply to just about any business in any category. Saying that you will deliver exceptional value to your shareholders may sound good in an annual report but does little to inspire employees to go the extra mile. Saying that you will outperform your competitors won’t become a reality if your employees don’t understand how that will happen. Saying that you’ll be the most customer-centric business in your category when everything that your customers and employees experience feels exactly the opposite serves only to undermine the purpose of having a vision in the first place.

Let’s be clear. A compelling vision needs to be:

• inspirational enough to generate energy and excitement;
• distinctive enough to feel unique;
• simple enough to motivate with clarity;
• challenging enough to feel stretching;
• directional enough to express a point of view about the world/future;
• tangible enough to be a widely understood call to arms.

Netflix CEO Reed Hastings has talked about the importance of vision and focus in navigating the economic, emotive and resource challenges of a business that has reinvented itself multiple times (from mailing DVDs to content streaming to original content production).3 Rather than spending too much time thinking about what the competition are doing, Netflix has a long-term point of view about what the future will look like, and is focused on servicing its customers in the best way possible on the journey towards realizing this vision. Following Andy Grove’s famous maxim that ‘only the paranoid survive’,4 he says, can easily distract you from your own path. Netflix famously publishes its long-term view of how it sees the market and where Netflix will focus.5 Where you choose to focus your attention is a key determinant of organizational orientation. Many incumbents look at competitors and new entrants as they are now rather than envisaging what they could become as technology inevitably improves.

Hastings describes how focus can see a business through a challenging transition such as the one that Netflix underwent when it moved the entire business from DVDs to streaming. Developing an entirely new muscle as a business means that the transformation has to be positioned as essential to survival. You can’t dabble in it. As previously mentioned, when the streaming part of Netflix started to take shape, Hastings deliberately created space between the two (competing) businesses and even went as far as separating the key management meetings to ensure that the streaming business should and could be built to stand on its own merits.

Stubborn on vision, flexible on details

If a compelling vision needs to be not only inspirational, challenging and distinctive but also simple, tangible and directional, how that vision is brought to life is just as critical in capitalizing on the power that it can have to be all of those things. The stories that grow up in a business through its life about times of success and struggle can be powerful influencers of cultural norms and behaviours in that company. The stories that an organization creates around its vision can be just as powerful in shaping changes in culture and practice.

A transformation vision needs to paint a picture of the positive future state for the business. It needs to connect with employees, partners and customers in ways that are emotional as well as rational. It needs to be something they can believe in. But a CEO standing up with a PowerPoint presentation is not going to transform a business. It also needs to be communicated repeatedly through the words and actions of the leadership team. German psychologist Hermann Ebbinghaus pioneered the study of memory and created the forgetting curve as a way of expressing the decline in the retention of memories over time. Put simply, information is lost over time unless it is frequently reinforced. Without any prompts to retain newly learned knowledge, its durability can decline rapidly. An example forgetting curve might look Figure 5.1.

Figure 5.1 The forgetting curve

SOURCE Created by Icez and available in the public domain at https://commons.wikimedia.org/w/index.php?curid=2214107

Details

The X-axis spans from 0 to 6, in increments of 1. Memory retention is highest on day 0 and declines over time if there are lesser revisions or prompts. The more the number of prompts on each day,...