Planability and Measurability in Agile Transformation

What we must never forget is that at the beginning of an agile transformation is a classic organisation. This sounds like a triviality, but it is not. Convinced agilists who have imbibed agile thinking with their mother's milk or have been moving in this context for a very long time often do not have access (any more) to how thinking is done in a classic organisation. Thus, they lose the ability to connect with their argumentative approaches and proposals for action.

I recently faced this challenge myself. When a company starts the agile transformation, questions arise about project plans, milestones and KPIs. When is the agile transformation complete? Answering such questions with agile thinking is pointless in the initial phase of an agile transformation. If it were already clear to the stakeholders in the organisation that an agile transformation is an iterative process which, precisely because it is a cultural change, cannot be planned in detail, they would not need my support.

So the question of milestones, KPIs and success criteria in the agile transformation must be answered differently.

There are different ways to do this. One is in the form of the now abundantly available maturity models, which can certainly provide valuable services in this regard. There are methodologically different approaches to maturity management that are more or less meaningful, starting with self-assessments (less meaningful) to formats that have more of an audit character (more meaningful).

What these models can undoubtedly do is document a development in the organisation. As a rule, they primarily tap into questions of attitude and culture, but also more visible, organisational characteristics. At the same time, their methodology (questioning, observation, documentation) and their presentation of results (numerical values, quadrant classifications, network diagrams) make them fully accessible to stakeholders who still think in classical terms.

However, we can hardly develop a milestone plan on this basis. Or is it a milestone achieved if the organisation has increased the agile maturity level according to model XY from 4.6 to 7? And can such a parameter development be put on a timeline into the future? And at what stage is the organisation "done" with its transformation?

Objectifiability must be the focus

I want to take a different approach. Unlike typical maturity models, I want to analyse the organisational state in transformation exclusively through its visible characteristics and the benefits of these characteristics for the company. This is based on the assumption that certain structures can only emerge successfully if the organisation has developed the necessary cultural characteristics that form the prerequisite for its ability to function.

This approach has several advantages.

1. it makes it possible to think of transformation from the "end". What is the end? From the perspective of the sponsors of transformation, it can only mean that the organisation becomes more responsive, more adaptive and thus ultimately more efficient and effective under today's environmental conditions. And in order to promote this from an "agile" point of view, certain structures must have objectively emerged.
2. it creates transparency among these same sponsors about what they are getting into in the transformation.
3. bringing about one or the other visible manifestation can be seen as a milestone in organisational development.
4. a degree of progress can also be deduced: the more of the visible manifestations influence everyday organisational life in sub-areas or even across the board, the more advanced the transformation process. And there is no doubt that the approach can be applied in a classical management environment. It is about the formation of specific, observable structures through a change process, measurable in its progress through the implementation of the various sub-steps.

The benefits for the organisation

Let us now try to approach these characteristics slowly.

The development of an agile organisation is not an end in itself, but follows the need to be able to cope with existing or future challenges. What these challenges are is difficult to define in general terms. If the efforts are to be taken seriously, the management usually hopes to improve the following organisational characteristics in terms of service delivery for the customers:

• Responsiveness. The organisation is able to respond to unexpected turns without getting bogged down in its own processes.
• Learning capacity. Continued response should lead quickly to new structures and processes.
• Effectiveness. The organisation acts to best identify and serve customer needs.
• Efficiency. No useless efforts are generated. All activities are focused on generating value as quickly as possible with the least amount of resources.

The focus on agility usually occurs when it is recognised that the organisation is showing weaknesses in terms of responsiveness and learning. Effectiveness - doing the right thing for the customer - is also a core agile principle. Efficiency is the essential business constraint.

The question that must now be answered is the following: What objectively visible manifestations within an organisation are implemented through an agile transformation and in what way do they pay off on the four benefits mentioned?

12+1 objectively visible characteristics of an agile organisation

Responsiveness

The organisational structure is team-oriented.

One answer to the requirement of responsiveness and changeability is decentralisation. The larger a structure is, the more difficult it is to change its processes and the more communication relationships have to be managed when a process that deviates from the standard is required. Teams are the organisational image of such decentralisation and are at the core of agile thinking.

The organisation thinks in terms of scope.

Fast reaction to the unexpected requires the right and the ability to deviate from rule processes within margins. The margins need to be defined in the form of governance rules. Formulating these is a leadership task.

Decisions are made where the competence lies.

If I want a quick reaction, I cannot afford decision trees. As a rule, they are also not necessary if I have worked specifically on enabling decision-making in the organisation. Thus, in relevant subject areas, complete delegation takes place at team and individual level.

Learning ability

Teams are cross-functional

I broaden my horizons when I am regularly confronted with different perspectives. The discussion in cross-functional teams actively contributes to this and also helps to strengthen my individual decision-making competence.

Professional and disciplinary leadership are separate

With the separation of professional and disciplinary leadership, I have taken the first step in the direction of seeing leadership as a differentiated task and no longer as an element for organisational structuring. At the same time, I open up the possibility of unbiased, individual development counselling for every single employee, aimed at ensuring that they contribute their best to the company.

Reflection formats are lived practice throughout the organisation

In order to learn, one must become aware of one's mistakes. This can only be achieved through conscious, regular examination of one's own actions. This is institutionalised through reflection formats at team level, which are regularly applied at all levels of the organisation - up to C-level.

Effectiveness

Leadership exists. It acts as a team with joint responsibility.

There are two aspects to this statement. On the one hand, a leadership team that thinks in silos does not live up to its corporate responsibility because it is not able to provide an orientation to the organisation that is free of contradictions. Therefore, leadership really needs to act as a cross-functional team. Responsibility for specific professional domains is omitted in comparison to team responsibility for the organisation as a whole.

Secondly, I deliberately use the term "leadership". By this I mean leadership in the sense of creating meaning, providing orientation and setting guidelines. I deliberately do not understand the organisation of the work of others, which is part of the concept of management.

The teams have regular exchanges with the client.

Each team has one or more clients, internal or external, for whom it provides value. These customers are talked to intensively to always ensure that the product also satisfies their needs. Cross-functionality ensures that technical sides, marketing and sales do not interpret the customer, but enter into a constructive exchange with the same together with the product- and service-creating staff. Customer orientation is understood operationally.

The organisation has a vision and values that provide orientation.

There are always situations in which decisions have to be made that are in the grey area at the limits of the teams' leeway. Here, vision and values must act as benchmarks that enable each individual to anticipate what a consensual decision for the company might look like.

Efficiency

The team cut is oriented to the value stream

The greatest loss in the production of a service occurs at the interfaces between departments. This is counteracted if, after a value stream analysis, the team cut is such that the complex issues of a value delivery are solved in closed team contexts and the handovers between teams are ideally of a simple nature.

Each meeting delivers valuable, documented results for all participants.

Agile systems are said to be inefficient, especially in the early stages of transformation, because of the number of meetings. This perception arises because the agile rituals are usually implemented in addition to all the other, usual meetings. In fact, however, they make all other meetings superfluous if they are lived properly.

This is how it is done properly - and it is measurable: every regular meeting is regularly scrutinised. Meetings are always moderated. All participants know why they are meeting and what results are to be achieved. The results are documented and can be used in the future. No one takes part in meetings who does not make an active contribution.

The organisation works iteratively.

Long-term, analytical planning in complex systems is often so weak in its actual predictive power that its creation can almost be considered a blind effort. Organisations that follow elaborate planning processes naturally attach great importance to the plan and subsequently excel in fidelity in following the plan. However, a zealously pursued path that is wrong is not only inefficient, but can even result in real value destruction.

To be able to work efficiently in such systems, it is necessary to have a sequence of smaller planning horizons that can be surveyed in a serious manner. This saves both: costly planning processes as well as damage due to planning fidelity. The implementation of this short- to medium-term way of thinking is commonly referred to as iterative working.

One last criterion remains, which cannot be clearly assigned to any of the categories and acts, as it were, like a bracket and a prerequisite for production.

Communication in the organisation is open and transparent.

All of the above points are based in one form or another on the way in which communication must take place in the organisation so that the desired state can be established in the first place.

If I do not create permeability for information through transparency, I will never succeed in working cross-functionally, tearing down silos or leading teams into decision-making capacity. If I do not communicate openly, I exclude any ability to learn: If you are not able and willing to name and admit mistakes, you will not be able to work on avoiding them in the future.

A simple progress system

If we now actually observe one or the other of the described system states, we may assume that we have reached a milestone in the development towards an agile organisational form.

If you wish, you can form ratios of achieved to not yet achieved characteristics and thus define a degree of progress. It is also conceivable to break down the individual sub-aspects again with regard to an initially local effect (e.g. iterative work initially only determines the character of IT) and thus also determine a more finely granulated degree of progress.

What succeeds in any case, however, is that the transformation thus acquires a measurable character, derived from essentially actually observable variables.

The downside: It seems too simple

It should not be concealed that such an approach also entails risks.

In one of the previous sections I put forward the thesis that the approach via the visible characteristics makes it clear to the sponsors - typically the managers - what they are getting into with the transformation concern. This is only true if it is clearly expressed that the various manifestations can only become reality if the cultural foundation for their effective unfolding is given. I.e. even if the sub-goals seem easy to describe, the road is a rocky and lengthy one for all involved.

In my experience, management is often amazingly deaf to this ear. The mechanistic approach through "the following must be visible in the organisation, then you can talk about agility" is, with a lack of understanding of the cultural implications, an invitation to cargo cult.

There are many examples of this. I would like to mention just one, which may seem very familiar. I am talking about the formulation of a vision and values that are prominently presented in the meeting rooms. This activity alone does not achieve a goal, even if it may seem so. Only in interaction with the achievement of other sub-goals, which are not so mechanistically producible, do vision and value setting unfold their purpose.

For this reason, one should also warn against cherry-picking the described characteristics. The vision just mentioned, meeting rules and the implementation of a value stream analysis are relevant steps, but alone do not make the organisation an agile organisation. Breaking off along the way inevitably leads to disappointed expectations and, in all likelihood, to a failure to achieve the desired effect.

Avoiding self-deception

If we see ourselves exposed to the danger that we could tend to self-deception if we only refer to the observation of the described characteristics, there are ways and means to counter this by an external reflection on a higher level of abstraction. One way to do this is to ask those who should be affected by the transformation: the employees and the customers.

The employees are the ones who are significantly affected by the change process in their daily work. The transformation should successively create an environment that enables more sense of purpose, goal orientation and increased productivity. This pays directly to the perception of increased self-efficacy among employees, which should have a positive impact on employee satisfaction. The means of questioning would be the collection of a Happiness Index that continuously accompanies the transformation. A simple introduction to this can be found in the Kununu approach [1].

And last but not least, it is always worthwhile to refer back to why we have made the effort to transform into an agile organisation in the first place. All measures should aim to improve service delivery to the customer and thus increase customer satisfaction. A very simple means of regularly surveying customer satisfaction is offered by e.g. the Net Promoter Score [2].

Despite all the methodological criticism of these simple parameters, they can be identified with comparatively little effort and have primarily relative value within the transformation. There is little doubt that a positive development in the course of the transformation also reflects a general positive development in customer and employee satisfaction. And if this is so, then we may truly assume to be on the right track.

The real challenge remains

With the described procedure, the 12+1 observable characteristics in combination with the surveys, all needs of those who want a clear framework of milestones, KPIs and possibilities to measure progress at the beginning of a transformation should be satisfied. Furthermore, the goal of the transformation in terms of the development of beneficial, organisational characteristics has been clarified.

What remains open, however, is how these organisational characteristics are produced. And that is the real challenge.

Sources

[1] "Happiness Index: where to find Germany's happiest workers", 11.7.2019, https://news.kununu.com/presseinformation/happiness-index-wo-die-gluecklichsten-arbeitnehmer-deutschlands-zu-finden-sind/, retrieved 21.7.2023, 10:52 CET

[2] "Net Promoter Score", https://de.wikipedia.org/wiki/Net_Promoter_Score, retrieved on 21.7.2023, 10:52 CET