Rapidly responding to customer demands, pivoting your strategy, and realising efficiencies are all necessary to survive in the disruptive environment organisations face. Having a clear understanding of consumer demand for products is fundamental to success – however in our view too often the digital enablers that support the agile enterprise are ignored, choking the opportunity to be successful.
Organisations increasingly look to emerging technologies to enhance their customer experience, enter new markets, increase their revenue, and reduce their cost to serve – often through large-scale and complex digital transformations. The reasons why such initiatives are undertaken are clear – whilst risky, organisations must respond to the market before a fast-moving competitor, or before they are displaced by a disruptive new entrant. In response they look to change and transform aggressively, else they risk falling by the wayside.
However, organisations often overlook the necessity and maturity of their underlying technology architecture to enable the rapid release of business value. The challenge is large, complex and costly and unfortunately too few have the digital enablers in place. This may be for many reasons, maybe the technical debt was misunderstood, the previous funding too limited, the technology governance too limiting, the processes broken or the organisation as a whole not yet ready to change.
Beware of your shadow
This isn’t to suggest that progress has not been made on the journey to become an agile enterprise. There are leaders of enterprise agility, such as: ING Group with their interpretation of the Spotify Model to respond to customer demands; ANZ Banking with a top-down agile transformation to enhance their speed to market; and Barclays and their agile ‘pods’ representing a diverse range of skills embedded with a DevOps approach to fight the FinTechs.
Many organisations have embraced agile practices in disparate pockets often for specific programmes as they tackle the need to deliver change at speed. Others have taken agile methodologies and frameworks as strict beliefs and attempted to implement these ways of working verbatim, without tailoring them to their environment.
Yet, few large enterprises have embraced an approach to agility that balances a change of business culture with a need to mature their technology – changing how a business behaves and operates takes time. Too often we see organisations struggling with siloed ways of working and disconnected technical solutions and establishing in effect a ‘shadow IT’ function to realise the business benefit they were seeking. We can take this further and consider the effect of Waterfall-Agile (or ‘Wagile’) hybrid approaches and the false sense of security that they provide – this creates a faux agile approach that doesn’t get to the root of the challenge.
To unleash the power of agility we believe organisations should turn to their CIOs and technology leaders, they must empower them to lay the digital tracks that will be called upon by other projects and programmes. During 2019, Forrester predict significant growth in back-office technology investment to turn this challenge around (Forrester, Predictions for 2019). Legacy technology must be refactored to sustain digital transformation expectations – to do this will require a measured approach to introducing innovation, new ways of thinking, and emergent technologies.
Build in emotion
Coupled with the methodical approach to introducing the right technologies, we believe it is critical that organisations look at developing talent. Technology leaders must champion the philosophy of agility throughout their organisations, embedding a culture of change and dissolving any IT/Business countercultures. The latest version of the Scaled Agile Framework (SAFe v4.6) recognises this as one of the five core competencies of a mature agile enterprise, ‘Lean-Agile Leadership’ is a prerequisite to drive and sustain change of the entire organisation, supporting the culture shift and rallying talent towards an agile mindset. To explore this further, the perspectives of Fin Goulding and Hayden Shaughnessy in their book Flow also provides ideas on how organisations can integrate processes to create value.
Reach virtuous transformation
Becoming an agile enterprise is an ongoing process of changing the way you do business. It requires a critical review of your strategy, capabilities, processes, projects, skills, and infrastructure and will require your talent and technology to work together harmoniously. Leadership must continuously observe progress and support decisions from the top, guiding the organisation on its journey to agility.
So, what are the key digital enablers that you must have in place to unleash your enterprise agility?
Our experience tells us that a pipeline of work that is dedicated to laying the foundation for agile enterprises must be in place to accelerate the pace change. Three key characteristics can help to realise this:
Explore through Continuous Innovation: To become a leader in this disruptive environment it is imperative that organisations explore emerging technology and apply it solve challenges that have hamstrung their enterprise agility. This is about assessing trends, completing proof of concepts to test hypotheses, and securing regular envelopes of funding through practices similar to venture capitalist seed funding for start-ups – known as ‘innovation accounting’. This innovation must be driven from all sources of an enterprise and a methodical approach applied: identify emergent technologies; ideate how they can solve challenges; innovate, develop and assess the implications; and incubate any adoption.
We suggest establishing a function that scans the horizon for emerging technologies and objectively assesses your ability to leverage them, building a pipeline of work that triggers future projects & programmes aligned to business needs. Within this function a dedicated Enterprise Architecture capability (headed by a Chief Architect) maintains the long-term strategy and roadmap of technology bets across the organisation, they hold the holistic view of services (and the systems that underpin them) and coordinate high-level architecture issues through innovation cycles. They are there as a guiding force only, not to police.
Embed Agile Leadership: Culture change is not easy, it involves letting go of the past, of biases, of doctrines – it is imperative that there is a shift in the mindset of leaders to unleash the potential of your agile enterprise. Agile leaders must embed and drive organisational change by empowering individuals and teams to reach their highest potential. They must have the courage to declare what they don’t know, and embody learning, teaching, and coaching in lean-agile, values, principles, and practices. A courageous, visible and emphatic leader generates happier and more engaged employees, and therefore raises the bar for productivity and innovation.
We suggest you work backwards from the mindset of the organisation, surface what must be learned (or unlearned) to achieve your enterprise agility. Then review the mission, values, and principles working with your talent throughout to embrace an agile mindset. Rally your talent behind the art of the possible and become visible on the ground, support the focus on experimentation, hypotheses and lessons – make a start by creating some statements that can inspire a shift in culture. The processes and toolsets can come later, start with the people.
Execute with Emergent Technology: To truly unleash your enterprise agility, technology must be seamlessly integrated into every aspect of how you operate. This may involve digitally-enabling existing products or evolving architecture, systems and tooling to support the introduction of digital-first products. A spectrum of technology development tools and practices must be leveraged to reduce cycle times, minimise handovers, and release to the market more often. These will include foundations like: continuous integration & deployment; DevOps; hackathons; microservices; crowd-sourcing; and infrastructure as code.
We suggest identifying where some of these practices are already happening within your enterprise, these normally start as grassroots endeavours to support specific projects or programmes. Often, they are not surfaced, recognised or embraced in a way that with the right support could be pulled up to share with the wider firm. Get the conversation going by helping IT employees think and talk about what they do through a business lens and better communicate how IT delivers value to the business, this can help generate ideas for future investment from business leaders.
Evolving to survive
Enterprises are increasingly exploring ways to become more ‘agile’ to rapidly realise business value. Programmes of change are run to re-design operating models, re-engineer processes, revise roles & responsibilities, and re-structure the organisation. However, all too often the underlying digital enablers are overlooked and assumed fit for purpose, with CIOs expected to deliver a digital service on a legacy foundation. Often the constraints are not fully understood until a business-led programme of change has commenced and begins placing additional pressure on the CIO and their department.
The CIO agenda has evolved. Some are losing control of the remit for forward looking digital solutions as this moves to business owners, and while from a business perspective this may seem preferable in the near-time it is not a sustainable strategy. The CIOs and technology leaders that are turning to their technology stack and lifting constraints, unblocking limitations and enabling change before it is triggered by the business are the ones that will help their organisation thrive through the next disruption and beyond.
We believe that the technology leaders of tomorrow must have courage to take the charge on the organisation’s agility agenda through three key characteristics: scanning the horizon for future innovations, inspiring a culture of agile-first, and growing a backlog of work that will support wider business initiatives.
We will be exploring these three key characteristics in later posts. In the meantime, if you would like to talk to us about the changes required to your IT function, and the challenges in delivering against these changes, please don’t hesitate to contact us.
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