by Isaac Sacolick

What is an enterprise wide agile transformation and why CIOs should lead it

May 20, 2019
Agile DevelopmentDigital Transformation

More CEOs are considering enterprise wide agile transformations, enabling a significant opportunity for CIOs to lead their organization’s process, culture and mindset changes.

digital transformation butterfly metamorphosis change gap
Credit: nicoolay / Getty Images

Can agile be used outside of software development teams, data science groups and IT organizations to manage work, collaborate on priorities and change the culture? Certainly, some marketing, operations and even finance teams have used agile processes to manage their work. But what does it mean for an enterprise wide agile transformation?

Agile practices change the nature of how teams define their customers, align on implementation strategies, debate priorities and commit to getting work done. Agile teams with a history of consistent delivery and demonstrating a strong partnership with their customers can change the culture. Instead of top-down priorities and timelines, teams align on strategic goals and produce business outcomes with incremental deliveries.

CEOs are looking for smarter, faster and more innovative organizations that can propel growth, enable winning customer experiences, compete with analytics and drive efficiencies with automation. They want their marketing departments to experiment, use data to learn what drives targeted behaviors and adjust marketing strategies to deliver results. They want more efficient and higher quality operations, smarter sales teams closing more strategic deals and financial groups reporting and forecasting in near real time. 

And CEOs don’t know how to get there. They are increasingly relying on their leaders and staff to pave the journey for them. CIOs who have excelled at delivering results and culture change with agile practices in IT have the opportunity to extend the practice, culture and mindset as an enterprise wide way of operating.

Top-down portfolio practices are the baseline for agile transformations

While agile practices are considered a bottoms-up process, an enterprise wide agile transformation requires some top-down processes and governance as prerequisites.

  • From a top down perspective, operations in every department such as lead generation, sales by product line, manufacturing processes and IT support processes should be defined. At minimum these should be cataloged, and six sigma practices can then be used to map flow.
  • Everything else that is non-operational is defined as an initiative and managed in a portfolio with published goals and charters in simple to understand language. There also needs to be basic governance structures around initiatives defining stages, gating criteria between stages and investment criteria.
  • There must also be an easy to understand enterprise charter that clearly defines missions, goals, cultural expectations, operating principles, investment criteria, intelligent risk-taking objectives, compliance guidelines, reward mechanisms and other expectations.

Operations are managed through KPIs while agile transformations target how teams organize and manage initiatives. The enterprise charter is the high-level governance for people and teams to follow when executing on their initiatives.

Going from top-down governance to bottom-up delivery with self-organizing agile teams

With basic governance in place, agile transformations have both a scope and operating guidelines to drive business impact. What makes this agile is that teams self-organize to define, execute and demonstrate the impact of their initiatives.

And what’s fundamentally different in an agile transformation is the decoupling of financial timelines (quarters, years) to agile timelines (releases and impact cadences). Teams no longer fit executing their initiatives into artificial financial reporting timelines and instead define cadences of releasing improvements and longer cadences on measuring impact.

Secondly, and most important, agile transformation establishes the degree of autonomy empowered to agile teams. For example, while initiatives can still be date driven, scopes are negotiated by teams based on what they believe is a minimally viable delivery.  

What does the agile transformation look like when applied enterprise wide?

  • Teams are unshackled from operating in quarterly and yearly financial cycles. Instead, they operate on release cycles that they define based on what’s appropriate for the initiative, but with some bounds defined in the operating guidelines.
  • Teams self-organize to propose, plan and execute initiatives. I would suggest reviewing the initiative stage gates I define in Driving Digital that are light weight in early stages and require more rigor in later stages. This promotes capturing lots of ideas, using voting committees to promote the most promising initiatives and leveraging agile planning to manage the early stages of defining the business case for investment.
  • Teams are multi-disciplined and use scrum, Kanban or other approved agile process to work toward their releases.
  • Impact is defined, measured and reported on by the team in a cadence that makes sense for the initiative but again within defined operating guidelines.
  • Teams are asked to define and make commitments. Teams and individuals are evaluated on a number of new criteria including hitting commitments, making impact and learning from failures.
  • Portfolio management practices define what teams need to do to pivot their initiative and what leadership controls are in place to help accelerate, slow down, or stop finding initiatives.

This is presented in very simplistic terms and the devil is in the details. Organizations with more safety, compliance and regulatory concerns have to adjust based on their requirements. All organizations have to adjust the practices based on the size of the organization, competition in their industry, geographic landscape of their people, availability of skills, complexity of legacy processes, degree of acceptable risk, among many other factors. That’s why one-size-fits-all approaches to enterprise wide agile transformations don’t work. The process end goals, change process and speed of change needs to be adjusted by circumstance.

How agile transformations change organizational paradigms

Agile practices certainly make life harder for the CFO who must readjust financial planning and reporting processes to the cadences used for release and impacts. When quarterly and yearly results are required, status and forecasts for each initiative needs to be pulled up instead of pushed down.  Using portfolio tools that aggregate data from agile sprints and releases can help especially when there is enterprise wide but basic reporting standards.

It requires organizations to reconsider how human resources evaluates performance and how leaders and managers reward people. Asking managers and people to set yearly goals and report on them quarterly creates a different and separate cycle than the releases and sprints teams are operating. Performance measurement should be done on release and impact cadences, and rewards factor behaviors that include demonstrating outcomes, learning continuously and executing collaboratively.

It requires differing tools and technologies. Gant charts, PowerPoints, documents and spreadsheets are largely replaced with agile project management tools, product portfolio tools, wikis, collaboration tools and self-service business intelligence dashboards.

Lastly, it requires a new form of leadership. Leaders have to be extraordinary listeners and collaborators. They have to be able to explain why and help teams to define the what and how.