Agile Transformation Step-By-Step
“Change is not mandatory. Neither is survival”.
W. Edwards Deming
Agile Transformation is a means to an end. Agility is an enabler. Organizations expect that Agile Transformation will deliver improvements in delivery cycle times, reduce costs, improve product quality, enable faster strategy pivots and create more satisfied customers. However, many transformation initiatives become protracted, expensive, and ultimately stall with little of real value accomplished. Common reasons include lack of organizational alignment on goals and strategy, insufficient skilled change agents to support the initiative, and an ad hoc governance approach.
An Agile Transformation may be one component of a broader Digital Transformation (or technology modernization initiative) which includes things such as switching to a cloud infrastructure, AI-driven sales improvement, and automation of manual processes like customer service. No two transformations will be exactly the same, but their overall business objectives will be fairly common: accelerate financial growth, gain market share, and become a faster, more responsive organization.
Whatever the specific goals of any transformation, the application of agile principles to the transformation process itself is much more likely to lead to successful outcomes. This means employing an incremental, iterative approach to manage risk and optimize goal achievement.
Transformation is an expedition into the unknown. At the outset, we don’t know what we don’t know. A transformation strategy built on the empirical pillars of inspection, adaptation and transparency makes a lot of sense. That is:
- The transformation approach is adaptive in contrast to following a fixed plan.
- Progress is made in small increments followed by inspection with adaptation for the purpose of learning, risk-reduction and course-correction.
This makes an agile approach to any type of transformation more flexible and reduces the cost of failure. This enables an organization to learn fast and make real progress.
A Framework for Change.
The critical steps of any transformation boils down a number of basic elements:
- Align on a Vision and Strategy. A vision acts as the overarching goal for the organization. It provides direction and a focus on what is really important. Strategy, in the form of a transformation roadmap, lays out how to achieve the vision through a series of intermediate goals. Goals should be stated in terms of measurable business outcomes.
- Organize. Design a governance framework to steer the transformation. This includes defined roles/responsibilities, a cadence of events for planning, progress reviews, and making adjustments, with key artifacts/data for use in decision-making. Skilled change agents are needed to lead this process. Objectives have been stated in measurable terms and accountability within the organization for achieving these objectives is clear. A system is in place to collect data for measuring progress towards transformation objectives.
- Plan & Execute. Plan and execute incrementally. Quarterly increments are a reasonable time-box to see measurable progress. Each organizational unit pursuing transformation will create backlog items representing for the work needed to achieve their objectives. Transformation work should be added to existing product backlogs – don’t create separate backlogs – this brings visibility to all of a team’s work. Thus improvement work is part of a team’s normal responsibilities. The governance framework must include arrangements for transformation planning, and progress tracking. The process should be sufficiently well instrumented so that progress measured and quantified as the transformation proceeds.
- Learn and Adapt. Assess progress, challenges, lessons learned from each Transformation Increment. Make adaptations as necessary.
| Align | Organize | Plan & Execute | Learn & Adapt |
|---|---|---|---|
| Establish Transformation Vision Assess Current State Transformation Roadmap Measurable Objectives Leadership Alignment |
Transformation Steering Committee Governance Framework Transformation Metrics Train Leaders and Teams |
Plan Transformation Increment Execute Measure Progress |
Assess Progress, Improvement Opportunities Adapt Transformation Plan based on Learning Plan and Execute Next Increment |
Engaged leadership will be required to lead the organization through the inevitable ups and downs, successes and setbacks.
Step 1: Align
Establish Clear Transformation Goals & Priorities
The organization needs to be able to answer the why for change. What problems are being solved and what is the overarching outcome being sought? Leadership alignment on goals and priorities is an essential first step.
- What is the current state of the organization – major strengths and weaknesses.
- What problems do we need to solve?
- What outcomes do we want from the transformation? What is the “value” of the transformation? This typically includes things like:
- Improved Operational Performance: Speed/Lead Times, Predictability, Quality, Productivity, Customer Growth/Customer Retention Rates.
- Higher Customer Satisfaction: Superior customer experiences, improved customer growth & retention rates.
- Better Employee Engagement: Higher levels of autonomy and growth opportunities. Improved retention rates.
- Ability to pivot faster to avail of new opportunities.
- What changes or new capabilities are needed to enable these outcomes?
- How will we measure progress?
For each target outcome, identify the enabling capabilities and practices needed. Also identify KPIs that will be used to measure progress. For example:
| Business Objective | Enabling Practices | KPIs |
|---|---|---|
| Accelerate Delivery | Reduce Av. Size of Pull Requests Deploy Static Analysis Tools in Build Pipeline Continuous Integration Test Automation Deployment Automation |
Delivery Lead Time Deployment Frequency |
Layout a Transformation Roadmap for the Organization
Not everything can be worked on at the same time. A roadmap communicates a strategy for how the overall transformation vision will be pursued via a series of intermediate goals. Its a great way to visualize the strategy. Strategy can be captured on a Transformation Roadmap as a sequence of objectives. (Outcomes, not Solutions: ).
- Outcome: Reduced Lead Times
- Solution: Test Automation
A transformation roadmap communicates:
- The transformation strategy as a sequence of prioritized objectives.
- Opportunities for learning and adaptation as the transformation proceeds.
The timeframe horizon should cover at least the next 12 months, with objectives defined for each quarter. Roadmap ‘dates’ are simply guidance on priorities. They could also labelled as Now-Next-Later. A roadmap is a communication tool for visualizing strategy and helps keep stakeholders and transformation teams focused and aligned.
Roadmap items can be captured as OKRs – a goal-setting framework for driving measurable results.
Each target outcome/objective on the roadmap can be captured as an OKR:
Objective: 10X Reduction in Delivery Lead Times
Key Result 1: Average Pull Request reduced from 500 lines to 250 lines by end Q1
Key Result 2: Static Analysis tools (Lint) deployed in build pipeline by end Q1
Key Result 3: Build Regression Test automation coverage increased from 50% to 90%, Q
Objectives in the roadmap define “what” needs to achieved to support the vision. Product Teams supply solutions to achieve those objectives and add them to their Product Backlogs. Each team may need different solutions for individual transformation objectives. (A product marketing team will need a different solution to “reduce lead times” vs. a software development team). Thus each team’s backlog items may be unique. Backlog items represent specific actions to be taken to realize an objective – for example, adoption of specific practices and tools.
Each backlog item should be aligned with an objective in the Transformation Roadmap. Backlog items should be tied to business KPIs, and should have a measurable impact on an objective. The OKR goal-setting framework is an excellent way to approach this.
An Objective, is a description of WHAT is to be achieved. Objectives are significant, concrete, action-oriented, and (ideally) inspirational.
Key Results – are the measurable outcomes sought. Used to set targets for any proposed Objective.
KPIs – are metrics used to measure progress toward the Key Result.
All Key Results should have owners.
Step 2: Organize
Transformation Governance
A transformation Governance framework is needed to steer the transformation to a successful outcome. Given the risks and uncertainties involved, especially in the early stages, an incremental and iterative approach is appropriate.
1. Roles and Responsibilities
Of course everyone in the organization must contribute to the transformation, however, leadership has a special responsibility.
— W. Edwards Deming
— W. Edwards Deming
Generally speaking, there are 3 types of roles: business leadership/sponsorship, transformation governance, and transformation delivery teams. We will keep the role names as generic as possible
- Business Leadership Team – key stakeholders who are ultimately responsible for the outcome of the transformation and who will operate the transformed system. If the scope of the transformation is enterprise-wide, then, at a minimum, it should comprise executive leadership from each major business function: IT, Marketing, Supply Chain Operations, HR, and so on. This team owns setting and owning the vision and goals for the transformation (the “what” and “why”), providing resources for its implementation, and for its overall success. Identify a specific
- A Sponsor (or, Leadership Representative, or Chief Transformation Officer) for the transformation who:
-
- is responsible for achieving the transformation objectives
- generates cross-functional support
- participates in planning
- empowers teams
- removes barriers and impediments
- reports progress to the CEO/Leadership Team, highlighting issues and decisions for resolution.
- Constant communication and encouragement to the broader organization on the vision, strategy and progress. (Shift “Have To” to “Want To”).
-
- Transformation Delivery Teams: Teams within each part of the organization pursuing transformation are empowered and committed to develop the changes (own the “how”). These are the people who do the work to adopt the practices/tools/processes needed to achieve the transformation objectives. Each organizational unit pursuing transformation will create backlog items representing the work needed to achieve their objectives. Transformation work should be added to existing product backlogs – don’t create separate backlogs – this brings visibility to all of a team’s work.
2. Governance Events and Cadences
Eating one’s own dog food in matters of governance signifies conviction in the basic pillars of agile delivery; small batches of work delivered in short, fixed time boxes, with feedback loops built in to support regular inspection and adaptation. All of which should operate at a sustainable pace to avoid overloading teams and creating excessive stress and fatigue.
Each event in the transformation governance framework is a formal opportunity to inspect and adapt transformation artifacts. These events are specifically designed to bring transparency to the state of transformation. Transparency enables inspection which in turns enables adaptation. Events operate on a regular cadence to reduce overhead and complexity.
Transformation governance is provided via a series of events designed to support the following activities:
- Planning. For example plan in 90-day increments. Each increment will have a set of objectives for what is to be accomplished. If you are already doing some kind of ‘Quarterly Planning’, or ‘PI Planning’, ART Backlogs should contain transformation activities as deliverables for the next PI.
- Weekly/Bi-Weekly/Monthly progress checkpoints. Check progress vs. the Transformation Plan. These events should be highly data driven – use Burn-Up/Burn-Down charts to help visualize the state of the backlog. Make adjustments to plans based on what is learned at each checkpoint.
- Review/Demo transformation objectives achieved at end of each increment.
- Retrospective on transformation progress at end of each increment.
Putting this together in a single picture gives us a view of the framework:
4. Measurement
It is critical to have a measurement system in place as early as possible. Build in metrics for success. Flying blind is not the situation we want to be in. At least not for long. Don’t be one of the many failed transformations simply because you are unable to demonstrate progress, or worse, are unable to see that you are heading in the wrong direction.
Having clear, outcome-based KPIs is essential. There must be solid integration with the transformation plan.
Ideally, we will have a transformation dashboard that will provide a transparent picture of the state of the transformation, and can be used to communicate progress to the organization, and also as a basis for making adaptations throughout the journey.
Getting a good measurement system in place is not a trivial task, and may require significant effort. It is advised to get this underway as early as possible.
Data Collection Plan – How will the data be collected. Identify data sources.
Metrics Development Plan – Roadmap and owners for metrics development
Metrics Rollout Plan – At which transformation cadences will metrics be reviewed.
Step 3: Plan & Execute
Each organizational unit undergoing transformation will likely operate as follows:
Planning. Identify objectives for the next 90-day increment and build the associated transformation activities into the Increment Backlog. Use a single backlog for improvement activities and normal operational deliverables, this way any effort or capacity needed for transformation work can be accounted for in the overall plan.
Execute: Teams, or teams-of-teams implement transformation initiatives, for example experimenting with various CI/CD practices and tools. The impact of these actions on transformation KPIs can be measured and tactics adapted as necessary.
Inspect and Adapt. At the conclusion of each increment assess the impact of transformation actions. If any initiative results in no measurable improvement, make sure you understand why, and make any necessary adjustments or adaptations to strategy. This may translate into new items for the backlog for the next increment.
Understanding Your Starting Point
Once you have decided the target outcomes for the transformation, you will next need to define how to measure progress. To do this, progress towards must be measurable. But first, an organization must understand the baseline state of anything it wants to improve. The table below provides an example of baseline values and targets for an organization that wants to improve its software delivery performance. (You might recognize these as the DORA Metrics from the book Accelerate, by Forsgren, Humble and Kim).
Other corporate functions such as marketing, supply chain, finance and HR must design similar plans specific to their operations. In large enterprises it is very likely that different parts of the organization will have differing baseline starting positions. Some teams may have grabbed the initiative much earlier and pushed ahead with implementation of practices like Scrum or Test Automation. Others may be operating with legacy methodologies and may have much more work to do in their transformation quest. Transformation plans will need to take these factors into account. Progress measurement will also need to account for starting baselines. Hence a first step is to understand the starting point for each unit of the transformation. This can be based on a simple assessment of current capabilities, practices and tools.
The results of these assessments can help set priorities for next steps, and can provide input to an Agile Maturity Model that can be used as the basis for measuring progress.
Step 4: Learn and Adapt
Don’t wait until you think you know everything about transformation before you start. Also, don’t copy and paste what has been done elsewhere, even if successfully – it it is unlikely to work in your own context. Agile transformation is a journey of experimenting and learning, and solving your own problems. Your organization, people, culture, challenges and opportunities are unique. Above all, learning should not be an ad hoc process. Learning must be built into the transformation framework at all levels via a built-in set of formal learning events.
Transformation means evolving an organization where people want to constantly improve. To do this we need to provide people with the skills and tools of improvement, and incentivizing them to apply these skills every day. Everyone in the organization must contribute to improvement. Everyone must be trained in improvement, and empowered to improve. This requires new patterns of thinking – a complete mindset change. An agile transformation must not be only about the tactical gains of adopting a set of tools and methods, but must primarily be about re-engineering the culture to where continuous improvement is a way of life. Tools and methods come and go. The goal must be to install a continuous improvement machine within the organization in which everyone plays a part.
Knowledge of agile values, principles and methods is a necessary but insufficient skillset to participate in any successful agile transformation. Leadership and relationship skills are also necessary at all levels of the organization. The ability to make sound decisions, solve problems, resolve conflict, get buy-in and build consensus is going to be instrumental in getting to a successful outcome.
Fundamental organizational transformation can be perceived as an existential threat to members of leadership teams, and middle management. All change is accompanied by conflict. Expect it. When we say “conflict” we simply mean different points of view about strategy, tactics, or how to solve various problems that emerge along your journey . Even when the organization is broadly aligned behind an overarching vision, conflict is still likely in areas of strategy and implementation tactics. However if we expect everyone to be a Change Agent, we also need to equip them with some basic skills for leading change, which means working continuously on alignment, solving problems, resolving conflict, and influencing others.
Conclusions
Agile Transformation need not be a risky adventure through uncharted waters. This article provides a basic framework based on an incremental, iterative approach designed to minimize risks and ensure steady, measurable progress.
