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agility_flywheel.md

Spin The Business Agility Flywheel To Transform Your Company

Notes from the article Spin The Business Agility Flywheel To Transform Your Company

"Agile transformations aims to help businesses to generate the capability to adapt to changing market conditions."

Why companies are failing to adopt Agile?

98% of businesses fails to adapt to changing market conditions.

Possible reasons of this failure:

  • The adoption of agile methodologies has evolved to a nearly universal framework that can help organizations adapt faster than ever, at every level, to changing market conditions.
  • Sadly, most businesses consider agility is the exact opposite!
  • Most companies deploy rulebook methodology, copy-paste hip organizational structures (Spotify Model anyone?), and measure success as implementing all the practices in the playbook.
  • Basically, they're looking at, "Are we compliant?" and if so, they assume all is well.
  • Too often, people equate executing the methodologies with being agile.
  • It's an output-based approach that runs counter to the principles of agility that should inform which practices you apply to the context and circumstances you're in.

Where companies are getting stuck!

"They envision building great products and exceptional experiences by making evidence-based decisions about what to do and how to do it so they maximize positive impact on customers and the world."

  • Communication: Often companies have an organizational operating system that's broken into lots of different components that can't communicate.
  • Functional Siloes: Having a divide between their business and technology functions, which leads to communication breakdowns, unaligned expectations, and difficulty treating technology as the strategic capability it is, rather than a cost center to reduce.
  • Focus on Outputs: Measuring success by completing tasks on time and budget, often without knowing if that effort is solving a real problem or if the output is achieving the business outcomes they're aiming for.
  • Lack of Data: Companies are missing feedback mechanisms throughout their organizational operating system. Especially with customers to guide their actions based on the real results of their efforts.
  • Going Big: They THINK BIG, BET BIG, BUILD BIG, and become TOO BIG TO FAIL, leading to perverse behaviors and perception.

The Agility Flywheel

"a simple model for true business transformation."

This model can help to tackle all of the issues mentioned before.

The essence of the Business Agility Flywheel is:

  • Working in small batches
  • Adapting your approach based on customer usage
  • Tight feedback loops throughout the organizational operating system.

It has 3 main components:

  1. Product Discovery and Continuous Delivery
  2. Organizational Architecture
  3. Business Model and Innovation Portfolio Management

1. Product Discovery and Continuous Delivery

The smaller the changes, the faster and more quicker you can iterate.

When you decide to build a new product, what's the processes you use to build it?

Being Agile can help you building the capability to release software when you want to.

Unlearn practices that made you successful.

Adopt new practices, such as automation and shipping smaller batches of changes to get the breakthrough you need.

2. Organizational Architecture

If you don't manage your organizational design, it will end up constraining the company you wish to create. Good design evolves over time to meet the changing circumstances and challenges the business faces in pursuit of the company mission you've defined.

3. Business Model and Innovation Portfolio Management

  • Waiting for a once-a-year decision point, and investing in business cases packed with untested assumptions and wide predictions makes no sense. You don't want to wait once a year to place a few big bets – you want to make hundreds of small bets every month.
  • Working in smaller funding cycles, rather than annual or biannual, allows for safer-to-fail investments and a higher chance of success since you can then make more informed decisions at a higher frequency.
  • Having a balanced portfolio between products to Explore, Exploit, Sustain, and Retire also protects you from taking on too much water from any particular failure. (could be this related to the Kent Beck's Explore/Expand/Extract?)

My take away points

  • Communication
    • Involve the "all" the right people sooner
  • Tight Feedback Loop mechanism is crucial
  • Having team with a full Autonomy and Ownership of the product they are building is important
  • Thinking BIG, proceeding SMALL, inspect and adapt your APPROACH
  • Release changes frequently!
  • Avoid the once-a-year decisions, instead think about smaller funding cycles, safer to fail investments.
  • Balance your efforts between products to Explore, Exploit, Sustain and Retire.
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