Talking Agile from a Business Strategy standpoint

The appeal of adopting agile is growing steadily in organizations these days, mainly at a product level. However, it is vital for an organization to apply this agile approach at a strategic level in order to achieve sustainable business objectives. This article will mainly focus on the areas at an organizational level where agile needs to be implemented and how will that help them translate into tangible business results.

 Every organization charts out its mission which has its strong purpose (Why) and the direction it intends to go. They carry out the strategic planning which outlines the broader approach to achieve its mission-aligned objectives. Strategic planning broadly covers the below activities:

• Defining objectives based on the organizational need and desired outcome
• Developing action plans to achieve those defined objectives
• Identifying the appropriate metrics to gauge the business success (like Business financials, Geographies penetrated, number of product launches, etc.)
• Task/work Execution
• Monitoring and tracking progress

 Now given the kind of ever-changing business landscape we live in, the business strategy keeps changing. The influence of these metrics (as mentioned above) over the larger business strategic objectives changes over time, which makes it all the more difficult to gauge how successful our business is based on the metrics defined earlier. With the changing metrics, even the action plan would change. This asks for a constant change in business strategy to ensure that an organization is aligned with the mission it had set out to achieve. It is also observed that the progress towards business agility bears a strong positive correlation with their financial rewards. Hence it is imperative to implement agile at a strategic level.

 

Agile can be implemented at 3 major levels in an organization: - Strategic, Tactical, and Operational.

• At a strategic level, it needs to verify its business model and its strategy would constantly emerge based on the feedback it would gather throughout. Strategic planning would remain dynamic.
• At a tactical level, the management ensures the proper implementation of the agile methodology by all the project teams involved.
• At an operational level, the real implementation of the scrum framework is carried out along with the scrum ceremonies.

In the traditional Hierarchical Organization, there are decisions, policies, budgets, and deadlines that are being imposed by the top management, based on which the products and services are delivered by the lower hierarchy of people to the customers. It is a top-down approach. The top layer intends to exercise complete control over the situation and the complex environment that their business operates in. And in order to do so they gather the data and information in the form of simplified and abstracted reports (as detailed data would be too time consuming) with many layers of managers in between, which doesn’t give them the holistic view and feel of the exact situation/problem statement. This creates even more distance between them and reality, which in turn results in taking decisions that are not anchored in reality. In contrast, the agile approach advocates having a bottom-up approach wherein the agile teams are formed who deliver products/services to the customers and the top layer provides a lot of guidance and support to the people at the bottom of the pyramid. They provide them the vision, their priorities, and complete empowerment so that they can decide “How to” in their own way. They don’t regard themselves as being on the top governing everyone beneath them, instead, they work to improve the health of the entire system. The middle managers make sure that there are no impediments coming their way and also provides them feedback when required. They also need to make sure that a communication channel is established with the external stakeholders (suppliers, partners, customers) for the agile teams to work effectively. Agile teams take end-to-end ownership of the product delivery and hence there are various feedback loops established to determine the quality or scope change if required. The feedback from the end-users also helps them to understand if any design modification or re-prioritization of functionalities is required.

 The departments are structured not based on the teams having the same competence but based on the teams having the same value stream or they are working on the same product family. Another strategy is to group those teams which are inter-dependent.

 Apart from these, there are various forums involved to discuss aspects like Delivery processes, Architecture strategy, communication channels, work environment, and any other team interdependencies that need to be addressed. And a member from each agile team participates in this forum to collectively discuss a long-term strategy.

 With this kind of organizational structure, there remains a common objective that ensues within every team adopting agile. There is a high level of congruence seen across all the levels of an organization along with an external environment which will not only help organizations achieve the desired business results but also move consistently towards their mission amidst the VUCA environment they operate in.