Agile: Why Is Adoption Still So Slow In Large Corporations?

The use of Agile methodologies are transforming companies around the globe, regardless of their industry. But have we been encountering a ‘black swan?’

For thousands of years, people were convinced that all swans were white: a black swan was a contradiction in terms, and was a common expression in 16th century London as a statement of impossibility.

Early Dutch explorers became the first Europeans to come across black swans, in Western Australia. From that point, it still took a little time for the rest of humanity to accept this, as it had been so widely believed that they simply weren’t real.

The term black swan subsequently turned into the idea that, a perceived impossibility might later be disproven. The ‘Black Swan Theory’, according to Wikipedia, describes:

“an event that comes as a surprise, has a major effect, and is often inappropriately rationalized after the fact with the benefit of hindsight.”

I believe the Black Swan Theory comes into play when describing Agile adoption in large organisations.

Not Just Software

Agile methodologies are having a huge influence on the way companies everywhere are producing their products. There are now hundreds of thousands of Agile practitioners around the world, and tens of thousands of organisations implementing Agile. Yet many General Managers we come across know little about it.

One reason for that, is that the Agile movement took flight within software development in about 2011 — an unexpected place for management innovation. Some six years down the track, the neglect of Agile is now changing as the mindset is being embraced by all parts and all kinds of organisations, as noted in the Harvard Business Review article in April 2016, “Embracing Agile” which said:

“Now Agile methodologies — which involve new values, principles, practices, and benefits and are a radical alternative to command-and-control-style management — are spreading across a broad range of industries and functions and even into the C-suite.”

The Agile movement is driven both by the passion of those who love working this way, and by managers who recognise that survival in an unpredictable and rapidly shifting marketplace requires a capacity to adapt equally rapidly.

However what I love about this concept is the logical foundation from which it sits. That is, to build up from a series of small (and tested) iterative steps, not eventuating necessarily where we thought we would but, because we employ what we learn along the way, at a place that represents the most value for the business.

I believe the Black Swan Theory can be used to describe large companies who haven’t yet adopted Agile methodologies… They believe they cannot adopt this methodology (because it does not exist for large organisations). But actually their thoughts are misguided.

What are some examples in Action?

Ericsson

In 2011, the 140 year-old Swedish firm with around 100,000 employees embraced Agile in a small unit with around several thousand people. Among many other things, this unit manages networks for many of the world’s telecommunications companies, covering 40% of the world’s mobile phone traffic.

Before Agile infiltration, Ericsson would build its systems on a five-year cycle. When a system was finally built, it would be shipped to Telcos and there would be an extended period of adjustment as the system was adopted to fit their needs.

Now with Agile management, Ericsson has over 100 small teams working with its customers’ needs in three-week cycles.

Development is substantially faster and more relevant to the specific needs of the customers. Clients get value sooner. Ericsson has less work-in-progress, and what they do have they have better visibility of. The business is deploying one or two years earlier then it otherwise would, so its revenue also comes in one or two years earlier.

Spotify

The rapidly growing, 8-year-old music streaming company has more than 2,500 staff and more than 100 million active users globally.

In 2015, a small team in Spotify needed to solve a long-standing problem: how could users find the music they would really love, in a library of millions of songs?

What if they could completely remove the friction for you as a user by using an algorithm to match your tastes with the several billion playlists created by other users and deliver a fresh playlist to you weekly?

The team didn’t need a whole lot of ROI analyses or climb a steep hierarchical chain to get management approval to change the firms entire strategic plan. In an agile setting, it was quick and easy for the team to test a set of hypotheses.

When the innovation, now known as Discover Weekly, was deployed just a few months later, it was a wild success — becoming not just a new feature but a global brand, resulting in an influx of millions of new users.

The Discover Weekly team is just one of more than 100 small teams at Spotify which has deployed Agile approaches to all work since it’s inception in 2008.

Barclays Bank

Who would have thought that a 326-year-old transatlantic bank with around 130,000 employees would announce in 2015 that embracing Agile was a key strategic initiative, and encourage hundreds of teams to become champions of Agile transformation.

There are now more than 800 teams that are part of an organisation-wide Agile transformation that is aimed at enabling Barclays to deliver instant, frictionless, intimate value at scale.

Microsoft

Complaints from 41-year-old Microsoft’s own employees emerged in 2007 when Windows Vista was offered to the public. In 2007, Microsoft was releasing Windows in three-year cycles with little possibility of feedback from users. This spawned a deep seated discontent among many users, who viewed each anticipated release of a new Microsoft operating system as untested, forcing the “wait until they iron out the kinks” attitude. This hampered Microsofts ability to drive adoption of each new platform.

Today, the situation is very different. Since 2014, Microsoft Windows10 has gone through a remarkable transformation. It is now getting feedback from an active user group of more than 7 million users and is issuing updates weekly, a game-changing acceleration.

Quite apart from customers: when staff see their ideas implemented within days instead of years, it has a huge benefit for staff morale. Other parts of Microsoft such as the Developer Division and Skype are also implementing Agile.

The Four Main Themes of Agile

Although we see many variations in managerial practices, and different labels applied to what was being done, there is a striking convergence around four themes:

Delighting Customers:

An obsession with continuously adding value for customers and users. Firms now generate instant, intimate and frictionless value at scale, anywhere, anytime, on any device. This has more than an increased attention to customers: it is a shift in the goal of the organisation — a revolution in management.

Descaling work:

A presumption that in a volatile, complex, uncertain and ambiguous world, big difficult problems need to be broken down into small batches of work and performed by small cross-functional, autonomous teams.

These teams need to work interactively, in short cycles, in the state of flow, with fast feedback from customers and end-users.

Enterprise-wide Agility:

Possibly a significant challenge for most. Blending Agile parts of the business that are somehow dependant on non agile parts causes friction. There is a recognition that, to be entrepreneurial, the whole organisation needs to embrace the entrepreneurial mindset so the entire firm functions increasingly as an interactive network.

Agile is not just for IT; it is a change in the way the whole organisation thinks, is managed, and is led.

Nurturing Culture:

A never-ending commitment to actively nurture, and systematically strengthen, entrepreneurial mindsets and behaviour throughout the organisation. With big business having big budgets and bonuses to boot, it is a challenge to shrug that mindset and create a culture that accepts failure in the pursuit of the best ideas. Often referred to as “failing fast” indicating that the failures are small, less impactful and can, above all else, be learned from.

How Can More Managers And Organisations Get Their Head Around This Methodology?

Be clear on your Why

Don’t just “get Agile” because we’ve said so. Begin practicing the methodologies because you’re going to achieve something important. Do it because you (and your team/department/business unit) truely believe that it will deliver better value back to the business.

Engage with a coach

The saying with Agile goes, it’s like skiing, easy to learn, but hard to master. Enlist the help of specialist, highly regarded Agile coaches. I have come across many organisations that throw a few post-it notes on the wall, by some beanbags for the office and claim they have a start up mentality and are working agile. Strangely enough they cant seem to identify any benefits… no surprises there.

Start small

Engage a small, high-functioning team within the business and start there first. Agile is a lot easier to adopt incrementally. You don’t want to adopt using a ‘waterfall’ technique — this defeats the purpose entirely!

To Sum It All Up

The idea that many of the largest and most established businesses will not be around in the next 10–20 years is a fascinating thought. The adage of ‘adapt or die’, as supported by both Darwin and the great Sir David Attenborough applies to the business world also. Big business MUST learn to adapt, faster. Traditional methodologies will not serve them well in the years to come. The smart ones have an appetite to experiment and invest not only in the new ‘millennial’ wave of talent coming through but in the methodologies and environments that will leverage these millennials to deliver the most value to the business.

I feel like some businesses are getting it right, but many are failing miserably, their efforts stifled by the old school senior and middle management mindset of ego driven empire building and excuses like “but “We’ve always done it this way…..” If you’re hearing this, it’s coming from dead wood and if there is a time to get rid of dead wood and prepare your business for a newer faster more dynamic world, this is it.

The bigger your organisation the more daunting the task, however it is not impossible, as proven by the examples above. It must start with trimming dead wood, leading into a culture shift where experiments (and failure) in small steps is permitted, on the proviso we learn from each mistake.