I recently talked to the CEO of a large multinational financial services company — agile information technology was not something he knew. However, he fully understood the challenges of the 21st century: the need for agility, the danger of business being disrupted, the need to reinvent one’s business model for digital, and the need for innovation and continuous change.
During our conversation, he realized that in order to deal with 21st-century challenges, a 21st-century organization is needed — and fast.
That’s where agile comes in, and not just in IT.
Agile is more than just some buzzword. The overarching objective is to decrease time to market, which keeps your business ahead of the pack and enables it to rapidly respond to market changes.
Once IT streamlines, the business and the rest of the organization also must adapt. In many organizations, the business still sits far away from IT, which can be detrimental to a team.
However, with many companies transitioning to digital, business is becoming IT. The most effective companies are those able to continuously deliver value to their customers with the shortest lead times possible, from “concept to cash.” To achieve this, the whole organization must become agile.
Agile started as an alternative way to do software development. The most well-known agile method — scrum — was conceived in the early ’90s, while the Manifesto for Agile Software Development was created in 2001.
Many people still think agile is only IT-based, simply because that’s the space in which it’s most often applied. The misconception about its definition persists because IT vendors and consultants continue to use it as a buzzword without grasping the essence.
Agile needs to be redefined as an organizational operating system that equips companies for the 21st century — and it’s a long overdue change.
The responsibility of expanding agile beyond the IT department ultimately falls on C-suite executives. They’re the only ones in the company who can take the holistic view of the organization necessary to enact these high-level changes.
The sad truth is that in many large organizations, only a small percentage of the workforce is actually doing something that creates value for the customer. A C-suite executive’s prime objective should be to make sure the people involved in creating value for the customer are able to do their jobs as effectively as possible.
Removing bureaucracy and unnecessary approval processes gives employees more power to make decisions. This shift is applicable to all departments, not just IT. Here are four ways agile enriches other disciplines:
1. It instills a companywide mindset and innovation culture. Agile isn’t so much about changing processes and systems; it’s more about changing people’s mindsets to focus on business value (and to get rid of everything else that’s not necessary). There’s a big difference between “doing agile” and “being agile.”
A behavioral change in management is also needed. If employees get fired when they try something new and it fails, innovation wanes. C-suite executives should foster an environment that promotes learning from failure — any other approach will leave them in the dust.
2. It forces the company to be customer-centric. In today’s climate, brands that continually satisfy customers with engaging and innovative digital presences inspire loyalty. Adopting a holistic agile approach can help companies accomplish that. Several big companies are currently shifting their marketing departments toward agile.
The art is to maximize the work not done. For example, test a hypothesis quickly when thinking of new products. Bring a prototype to a customer as soon as possible to collect feedback, and pivot the product in the right direction. Putting this kind of emphasis on customer opinion makes your audience feel valued and ensures you’re building the right thing.
I’ve studied the operating models of young startups in Silicon Valley. This way of developing and marketing products is firmly rooted in the agile DNA of those companies and is well described by Eric Ries in “The Lean Startup.”
3. It helps employee retention. Agile enables autonomy, mastery, and purpose for the people involved. In 2020, millennials will represent nearly half of the workforce, and the last thing they want to do is work in hierarchical organizations where they make no impact. Google’s human resources department uses the people-focused dimensions of agile in everything they do, which allows them to attract and retain top-tier talent.
4. It minimizes risk. Agile reduces risk through shorter iterations and transparent progress. Agile teams have fixed monthly costs, so spending is easy to forecast. If teams use data to measure and continuously improve their businesses’ value impact, ROI is easily calculated.
You don’t want your company to be on the wrong side of history. Stop marching forward, and start sprinting to a brighter future: Implement agile into every facet of your business.