NeuEon Insights / Business & IT Strategy, Business & Technology Agility, Leadership & Team Management

Digital, Organizational And Agile Transformations: Intertwined

It’s no surprise that CEOs and CIOs agree that today’s digital environment is driving change at a furious pace. In fact, a survey by Forbes found that 92% of executives believe that organizational agility is critical to business success. However, this same survey found that only 27% of executives surveyed considered themselves highly agile. This makes sense. As organizations grow in complexity, the very principles that drive agile philosophies inherently become buried. Transparency, collaboration, decision making empowerment, fast/iterative processes and continuous improvement fall by the wayside giving way to hierarchies, silos and reactionary behaviors.

Most development teams have been trained in agile. Most executives have not. Without understanding what “being agile” means — and embracing how the philosophy can be applied — it’s difficult to know how to affect the necessary changes.

Likewise, even development doesn’t always adhere to all of the parameters of agile and may, in fact, be low on the agile maturity scale. Two primary factors driving this are often the weight of the organizational structure and the resulting inability at an individual level to drive change and the common view that theoretical agile training can effectively be applied to real-world scenarios.

The Pressure To Evolve: Digital Transformation

Digital workflows and processes are changing how companies do business — 47% of CEOs are being pressured by BODs to make progress in digital change, and 84% feel that organizational agility is essential when it comes to successfully implementing digital transformation. Many companies are being forced to transform via suppliers, partners and customers as they advance as well, driving organizations to embrace the agile concepts at more than just a software development level. Companies that are having success realize the transformation process is not quick, but it does show measurable improvement.

The Burning Question: Quantifiable Results

Organizations can achieve quantifiable results in a broad range of areas, including software development, IT infrastructure, customer service and more by using agile frameworks and methodologies. As companies increase their focus on digital transformation to drive efficiencies, using agile methodologies creates an ongoing framework for rapid growth and change, which is at the root of the problem most organizations are trying to address.

In 2018, the business value of an organization-wide agile transformation is a driving factor for implementation, and quantifiable results are a crucial benchmark for success. A 2017 McKinsey report had interesting data on the lasting impact of “good implementers” — meaning organizations that had successfully driven change. Not only did they see a financial impact that outperformed the “poor implementers,” but the effect continued and grew. Two years after, the results were sustained, delivering twice the level of financial benefits.

The interesting final point in this study was that change takes practice — and transformation was more successful when led by change leaders who had personally led these types of initiatives multiple times before.

In the face of either a failed transformation or a new initiative, many organizations are looking to agile methodology experts with experience beyond the development group to help shape these goals. They are also needed to provide the expertise to ensure that the major changes required for rethinking organizational structures and processes include the best practices that deliver results.

The aforementioned Forbes survey found that 31% of organizations that qualify themselves as highly agile have increased earnings before interest, taxes, depreciation and amortization by 20% or more. Meanwhile, regarding organizations that categorize themselves as having average agility, only 1% met this growth metric.

One of the most difficult parts of measurement is having the necessary data to know (truthfully) where you stand. Organizations considering agile, organizational or digital transformations should understand how to collect initial measurable data so progress is measured against a legitimate benchmark.

Don’t Drive Transformation … Participate

Organizational change is a base requirement, and it starts at the top. The results are in, and organizations that don’t support and drive agile transformation at the C-suite level perform poorly. CEOs are being pushed to continuously improve results, and agile methodologies can accelerate business value across the entire organization, but only with proper support.

According to VersionOne’s State of Agile Reportthree of the top four reasons why agile projects don’t succeed are aligned with organizational issues. Culture at “odds with agile values” accounted for 63% of answers, while “lack of management support” was reported by 45% and “general organization resistance to change” accounted for 43%. Agile transformations represent a fundamental shift in how an organization as a whole thinks, acts and produces. From the way teams are organized to how they interact with clients, it takes time and a willingness to trudge through the initial discomfort and uncertainty of change.

Implementing agile philosophies and methodologies throughout organizations can drive real change when deployed thoughtfully, with clear goals and proper support. The C-suite as a whole can pave the way for transformations by becoming educated on agile philosophies and how they apply to different functional areas, embracing and creating positive energy around change, providing a united front, setting realistic goals and, above all, avoiding edicts from the top down. Ensure that accurate metrics are being captured and set your benchmark of where you are today by utilizing data where possible. Recognize that the first sign of a speed bump shouldn’t signal the abandonment of the initiative because transformations of any kind are based on continuous improvement, so theoretically there is always room for improvement.

Yes, it’s a difficult process. No, it’s not insurmountable. When organizations start to see real change taking place, it continues to invigorate forward momentum, and the power of that momentum is critical to long-term growth.