Business Agility requires business operations governance frameworks that enable, rather than stifle, individuals and teams pursuing emergent opportunities.
We are only now starting to think about Enterprise Agility as a discrete domain. Over the last 20 years, as individual teams became agile, the constraining factor for agility to scale was the other teams within the division. Now, as entire divisions and departments scale to become agile, the constraining factor for agility is the rest of the organization.
“An organization can only be as agile as it’s least agile division!” — Evan Leybourn, Evan’s Theory of Agile Constraints
The Agile Enterprise is a response to competitive pressure, to respond quickly to changes in market demands to seize market opportunities while reducing costs. At the core of the Agile Enterprise are the People, knowledgeable, skilled and innovative.
Enterprise Agility emerges when there is an agile way of working across many teams and divisions. From a systems perspective, it can help to think of work in your organization as a flow. We have a pipeline of demand on one side and delivery to our users on the other. Somewhere along this flow is the next limiting constraint to business agility. 20 years ago, that was IT and the software teams. Which is why it was logical for Agile to emerge in that domain. But now there are new constraints that need a wider view. It differs across organizations, but it is generally found that the PMO, HR, sales, or finance departments are the next teams that need to be agile. In most organizations, we have an 18-month budgeting process limiting a development cycle that can deploy every day.
These are not easy problems to solve. You must help these divisions internalize an agile mindset and culture as well as providing appropriate practices aligned with their work context. This is key to achieving Enterprise Agility and ultimately true business agility.
Moving from Theory to Practice
Your goal is to bring agility across the organization; from IT, Finance, HR, Marketing, Sales, and Operations.
Create a Value Stream Network
Value stream maps are great for processes, however, in an organizational context with many inter-dependencies you have to build a Value Stream Network. A high-level network of different business processes and how they interact across the organization. For the purposes of transformation, keeping it high-level is usually sufficient. Then, by introducing measures to each of your processes across the network you can identify (and hopefully resolve) enterprise bottlenecks. One caveat though, mapping a process that shouldn’t exist may give it unwarranted validity. Remember that the purpose of mapping the organization is to eliminate bottlenecks and simplify complex processes.
Create an Adaptive Portfolio
Start by creating an adaptive portfolio; a managed list of major ideas, aligned by business outcome and ranked. Initiatives are then “pulled” by a team when they have the capacity, rather than forming temporary teams around work.
This doesn’t mean that we shouldn’t have strategic goals, nor does it negate the need for planning, but it does change the approach to planning. Strategic goals look out a year or more which then get translated into initiatives. Each initiative will have milestones and checkpoints to ensure the work being done aligns back to the organization’s goals and that our people and resources are being deployed in the wisest way possible.
Fund Outcomes or Teams
Traditional organization fund projects based on the estimated effort & duration of a fixed scope of work (which is often incorrect) and with benefits measured after the project is complete. Instead, start to fund initiatives based on a steady rate of financial spend against a regularly measured business outcome. There is still an assumption made around the return on investment, but the period of measure is exponentially shorter. By dynamically planning, prioritizing, and monitoring activities against outcomes, teams can manage their spending and deliver the highest value activities first.
Because we have greater predictability and can focus on value realization rather than measuring outputs, we’re in a much stronger position to demonstrate value to customers and shareholders.
Measuring your Business Agility Maturity
|All work (e.g. projects or products) has a predetermined & quantifiable value to the organization (in the context of a business outcome). We use this information to justify, prioritize, and fund the work.||Strategic goals have incremental checkpoints to ensure that all work aligns with our organization’s goals.||All our business outcomes have relative targets and regular measures (including non-financial measures). We are able to quickly and easily pivot or stop projects (or products) that are off-trend well ahead of time.||We use adaptive funding models to allocate funds against value streams (rather than projects). We align governance and KPI feedback loops to business (or customer) outcomes (rather than time, cost or scope measures).|
|At least 2 divisions have changed the way they work to be enablers and collaborators to others. This has had a positive impact on the business and feels more agile.||We have identified those business functions that limit (or constrain) the agility of our organization (through excessive process & governance, limited capacity or other reasons). We are actively working to remove the constraint.||Supporting functions enable business agility within our organization by actively supporting teams and creating simplified (and open) processes (e.g. Netflix’s expense policy – “Act in Netflix’s Best Interest”).||Each department understands they have an internal or external customer that they need to delight and are actively doing so.|
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All organisations, from the largest enterprise to the newest startup, face the same challenge: how to solve their users’ problems by bringing a superior product (or service) to market faster than their competitors while reducing effort spent on overhead activities or, worse, building the wrong product
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