The Agile Enterprise
Filed under: Business, Enterprise — Aldo Cauchi Savona @ 12:38 pm
I had written this article in February 2008 after listening to a talk by Boris Gloger called “Scrum - A way to change enterprises” at the Agile Malta conference in February 2008 and discussed the subject with a DSDM practitioner friend of mine. The article a time in my experience with Agile where people expressed they idea that “Agile” is something for developers and not for any other aspect area of a software project or the business itself.
It is most likely that at some point in time you would have heard the words “agile” or “scrum” mentioned within the company usually when people refer to the way the software developers work. However, agility is not just about the way we do software development it should be about the way the company does business.
The Agile frameworks are based on a very simple cycle of think-act-do and implement a basic inspect and adapt approach to the way we currently do our work. What this means is that at regular intervals a group of people who are working to achieve a goal, be it a piece of software or reduce the number of open issues, discuss the way they are currently working and see what they can do to improve their current situation. Thus, Agile is about making what we do better.
Why would a company decide to adopt an Agile framework? Is it because Agile is trendy within many software development companies at the moment? Well, if a company simply made the transition to Agile for the sake of being trendy they would most likely suffer a decrease in productivity rather than an increase. After all, the transition to Agile is not quick and certainly not cheap!
Why? A company has a business goal; a vision of where it would like to be. The vision can be compared to an explorer whose goal is to explore the mountain on the horizon. This goal is assessed to be achievable. Now, what the company needs is to implement a model based on business values to reach its goal(s). Agile offers a flexible framework within which a company can reach its goals. So, a company will make the expensive transition from a traditional framework to an Agile framework because it believes that the Agile framework will help it achieve its business goals faster and more efficiently. In such a case Agile becomes the business model with which the company will achieve its goals.
For example, Toyota felt that the only way to compete in their post war environment was to reach a state where they have a minimal inventory and produce cars on demand. After around 30 years they perfected this framework and it was coined ‘Lean’. Using Lean, the company suffered minimal losses during the 70s (or 80x) fuel scare and in recent years, Toyota has surpassed General Motors in vehicle sales. Also, the Toyota Prius is an exceptional business case on how they understood market demands and product a car, from concept to production in less than a year.
Toyota managed this because agility is ingrained in the way they do business. For Toyota, Agility starts from the way they deal with their suppliers to the way they care for the end-consumer.
About two years ago, I worked with a great company that decided to opt for an Agile framework called Scrum. The first department to start using Scrum was the development department and we started the transition about 1½ years ago. The main reason why development was 1st targeted is because Scrum’s initial focus when it was conceptualised back in the early 1990s was software development and it was mainly focused on improving the collective output of teams.
This does not mean that only the development department can benefit from the Scrum framework. Many companies have adopted Scrum to handle their customer support and IT services too. At the 1st Agile Development Conference held in Malta on 19th February 2008, I met a person from an insurance company (I think it was Atlas Insurance but can’t quite remember) where they implemented Scrum principles in the way they handle claims to improve the way they work. The net result was improved productivity and reduced stress on the employees. Many other examples of successful non-development oriented can be found on the internet.
However, even if Scrum is implemented within individual departments and they each manage to improve individual department output, each department will still be an independent silo. This will prove to be a limit to the team’s output and the only way to get more productivity is to apply the same principles of Scrum that applied to a team to departments. The end result is that the business model will change, where, rather than have vertical individual departments (i.e. a traditional organisation hierarchy), you implement horizontal inter-department teams that strive to improve productivity on a ‘product line’. These teams will involve members from all departments relevant to the product, for example, members from the Sales, Marketing, Support and Development departments.
By having a member of each department that will have an affect on the product in one team, important decisions that can impact the company’s direction can be taken quickly. Also, the wishes of each department will be represented within a product line from the start. With this approach, inter-department commitment to a product will be stronger and more united. One major corporation that has gone through this restructuring programme is BT who gave a keynote presentation about their process at the November 2008 Scrum Gathering Conference in London (Scrum@BT).
A founder of a billion dollar company expressed the power of unity as “If you could get all the people in the organization rowing in the same direction, you could dominate any industry, in any market, against any competition, at any time.”[1]
Aldo Cauchi Savona – Feb 2008
[1] The Five Dysfunctions of a Team: A Leadership Fable, Patrick M. Lencioni, 2002