Digesting the 2020 Business Agility report
This week the Scrum Alliance released the Business Agility Report, led by the Business Agility Institute. It makes for interesting reading, and perhaps most crucially, collected data right across the onset of COVID, allowing for a before-and-after picture of how business agility is evolving globally across multiple industries.
From this article, I am pulling out the three key findings and three observations beyond those mentioned in the report that stood out from our own experience.
Three Predictive Indicators
In the preface, Steve Denning makes a compelling case for corporations to take business agility seriously, highlighting the high levels of market capitalization for organizations that have aligned to a customer-oriented/agile mindset during this time of disruption and abrupt change.
The survey itself reinforced findings from the 2019 survey, that the top three predictors of business agility success remain: relentless improvement, funding models and value streams. In many organizations this starts with a focus on encouraging a culture of learning and experimentation.
This can be seen as the first pass of an agile transformation, unpacking how work gets delivered to focus on a culture that values experimentation and controlled risk taking. As this capability emerges, a rapid shift follows in which value streams are refined and funding moves from a focus on projects to a focus on work outputs within a stable value stream.
Planning Your Way Out vs Planning Your Culture
Some leaders still believe they can plan their way out of rapidly changing markets and ambiguous customer needs. This is no longer the case. In the survey, the shift in leadership mindset states that planning an escape from a turbulent and rapidly changing environments is futile. In juxtaposition to that, culture change is becoming more conscious and deliberate. Still in small steps, but much less of an emergent condition and much more a guided journey.
Organizational changes tend to fail without a commensurate cultural change. Leaders are beginning to appreciate how they can directly influence and guide culture change while following an increasingly emergent approach to organizational change.
The current thinking is that organizational change needs to become a more emergent practice and less about big planned campaigns. Changing culture is not something that can be left to emerge but needs to be deliberately planned. Two change management problems meeting in the middle, if you will.
A Vested C-suite
Staying with the theme of leadership, a key observation from this year’s Business Agility survey is that an active, engaged C-suite or Board, is much more likely to result in a successful change. While this might seem self-fulfilling, this year has seen a wider involvement and many more initiatives being led by Boards and C-suites.
Executive leadership accelerates the maturity of business agility. This means organizations in which executives lead an agile transformation end up saving both time and money in the long haul. This is predicated on the influence of the executives in chasing through the removal of organizational barriers to change. Many impediments to a successful transformation inevitably cross departmental boundaries which the executives are ideally placed to address.
From Process Improvement to Mindset Shift
Most organizational structures, policies and metrics were created to drive control, predictability and compliance rather than innovation at speed. A collective shift in mindset is required to shift organizational barriers and structures, and this is readily apparent and recognized by organizations undergoing transformations today.
As a result, many organizations are undertaking process improvement changes without relying on the language of agile transformation. The agile and lean principles underpinning organizational change are being applied as part of a mindset shift that focusses on quick response to emerging customer needs, without the language of Agile or Scrum. This is a huge step forward and allows a focus on mindset over practices.
This is most impressive when seen from the perspective of change in large, difficult-to-change organizations. Larger organizations are shifting their mindset at a slower rate than smaller organizations, as we would expect. But they are shifting, and we should expect them to accelerate that shift while also learning how to leap forward as they learn and apply experience around culture change.
Long-term Resilience vs Near-term Results
With the onset of COVID earlier this year, the focus of executives moved from immediate business problems to the challenges of running successful remote digital offices. Previously the primary focus was on near-term success; business results, rapid product delivery to meet continually changing customer needs. Now we see a deeper acknowledgment of long-term business resilience in recognition of the fact that the environment that every organization works in is more uncertain, more turbulent and prone to sudden change.
This will have long-term effects on how organizations structure themselves, develop product(s) and recruit talent. Exponential change creates very complex environments. A strategy based on being the most efficient in the market, can be inherently brittle in a rapidly changing world. What is the most efficient today, can be just completely wrong tomorrow.
A focus on long-term resilience leads to a move away from being efficient in a narrow set of scenarios, to one of being effective across many different scenarios. This requires a broader range of capabilities, some of which may need to be on standby or at least less optimally leveraged, in the near term. Organizations that build in slack and diversity into their DNA will be better suited to respond to unexpected changes.
Individual Contributors as a Deep Information Network
The report highlights how C-suite executives must be able to gauge business impact from the emerging trends, while individual contributors can see how team decisions are impacting those trends. The shift from bottom-up, to top-down transformations has enabled organizations to overcome internal resistance and barriers to change more quickly. However, the importance of listening to and responding to bottom-up observations and concerns has never been greater.
Complex environments are characterized by uncertainty and ambiguity. Our assumptions and experience can lead to a false sense of familiarity and control. The only way around this is to continually test our assumptions through observation, from as broad and diverse set of observers as possible. This Sensemaking network is far beyond just big data. Diversity of information provides both an early warning system and a resource in looking for solutions.
Therefore, a hallmark of organizations that successfully navigate a complex world is a broad and deep Sensemaking network. Individual contributors are often closest to the customers and the market, making them a significant part of this Sensemaking network. While successful business transformations are led from the C-suite, the future success is dependent on a continued connection to and communication with individual contributors.
I hope you find the insights above useful and relevant. I also highly recommend reading the Business Agility report for more detail. The report highlights both hidden gems and some powerful trends effecting many organizations.
At IncrementOne we see high performers focus on shorter and shorter feedback loops, a move towards near-term planning within the context of a long-term objective, and on deep customer understanding. We help organizations develop the skills necessary to succeed in fast-paced, uncertain environments.
- This starts with leadership. Understanding that leadership is less about defining where we go and how to get there, and much more about building a shared vision and an environment in which innovation emerges and is recognized by learning what works.
- It means discovering how to govern disparate and often dependent actions towards a shared goal. How to prioritize across diverse initiatives and create funding and governance constraints that enable innovation, not stifle it.
- In a fast-paced market with uncertainty, staying tightly connected to customers and end-users is critical. Their needs and behaviors strongly influence organizational objectives with expectations on usability, quality and continuous relevant change.