How the digital sausage gets made — what if agile does not lead to agility
This is the 4th article in a series about how to get digital right (part one, part two, part three).
Digital transformation in the enterprise
In the real world, the principles we proposed in the previous articles are not easy to put into practice, especially in the context of older, larger corporations. Many companies need months to ship relatively simple updates, teams have a hard time coordinating and technical debt is everywhere. There are still multi-million IT projects out there that never get shipped. The best practices are already here, they’re just not evenly distributed.
What is keeping the industry from learning faster? By default, enterprises change at a geological pace. When client-server architecture started to replace mainframe computers, it took enterprises a few decades to adapt as well. Changes of this nature have far-reaching consequences; the enterprise needs to adapt its strategy, identify and hire the right people and leadership for this new reality, update processes and workflows throughout all departments, migrate data to new systems, find ways for legacy applications to coexist with newer systems, etc…
The problem is not really that it’s a lot of work — most organizations can handle that. The problem is that digital transformation requires people to change how they work. Changing habits is hard and many people will oppose change, even if it is for the better. Some will oppose it openly, others will sabotage change initiatives while seemingly collaborating. In autoimmune diseases, the body’s immune system mistakenly attacks its own body. Digital transformation can be similar.
Enterprises today have a lot more to learn than agile principles. They’re also moving to the cloud and learning to deal with SaaS, mobile, machine learning,… In terms of complexity and change management, all these shifts are on par with the change from mainframes to client-server architectures. In the time it takes an enterprise to adapt to one new reality, 3 new paradigms have cropped up.
Things like agile, cloud, and SaaS may be yesterday’s news for the digital hipster working in a start-up. But enterprises cannot generally afford to operate on the cutting edge — some are still running mainframes from the seventies (and some even have good reasons for doing so).
Nevertheless, enterprises don’t operate in a vacuum, they have to compete with younger organizations as well. More important than learning the next paradigm is internalizing the ability to learn any new paradigm. In other words: agility is upstream of cloud, SaaS, web3, AI,…
Agile development does not automatically translate to business agility
Earlier we described the ability to reinvent an organization as business agility. The process of acquiring this capability we’ll call digital transformation. It is not easy to update culture and mental models at the scale of thousands of people. As a result, digital transformations have become a multi-million dollar industry.
A lot of failed transformations can be traced back to misunderstanding “agile”. Are we talking about an operational methodology for IT teams or about the capability of the organization to reinvent itself? Although agile software development is a crucial aspect of any digital transformation, it is not sufficient in and of itself.
Many traditional enterprise execs assume that applying the methodology will automatically unlock the benefits. They tend to overestimate the power of the methodology and underestimate the importance of the company-wide process.
Company-wide coordination makes or breaks business agility. This covers soft concepts like culture and values but also tangible methods like domain driven design, strategic portfolio management, capability mapping and value stream mapping.
In earlier sections, we skimmed the methodology surface: practices that teams can employ in the creation of successful digital products. These are local optimizations. In order to achieve our end goals of business agility, the system needs to be optimized on a global level.
To use a sports metaphor; you cannot coach a football team only by focusing on the individuals. Individual capabilities are an important aspect of the game but you are bound to lose out to teams who also globally optimize the interactions between players. The following articles in this essay take a more global perspective.
Back in the world of IT, it makes zero sense to attempt agile development within an organization that is otherwise inclined. A team is a subset of an organization for good reason. In hiring people a team is constrained by an HR department, in selecting tools they are constrained by a procurement department, in deploying software they are constrained by the enterprise’s architecture,… These constraints exist for a reason and they are only problematic when there is misalignment. If the entire organization is optimized for agility, the coordination overhead is much lower.
Another classic transformation pitfall is called cargo cult agile. It describes a robotic culture where the organization imitates behavior without understanding why; people confuse the method with the goal. Cargo cults cherry-pick certain symbols like sprints or stand-up meetings that they can easily integrate with existing processes and workflows. This will obviously not bring about significant change.
Recognizing these problems is only the start. The next hurdle is to convince the senior leadership that their goal should be business agility instead of agile development and that it takes more than IT processes to achieve it. Very few companies get transformations right from the first try and consecutive attempts get harder because of disillusionment about the change that was promised. It should be no surprise that digital transformation can take a long time. There are no silver bullets but by now it should be apparent that agility requires a holistic, concerted effort from the entire organization.
Crossing the chasm between business and IT
Earlier we described the feature factory pitfall, where people in the “business silo” request features from people in the “IT silo”. Note that in companies like Shopify and AirBnb — organizations that were forged in the information age — there is no Chinese wall between IT and business. The two are joined at the hip because the software is the business.
The fact that the IT and business dichotomy still exists in many traditional organizations is proof that they have a hard time acknowledging the impact that software has on their business. Banks for example have only recently discovered that they are actually technology organizations — much like in the book sector, their core product can easily be expressed in ones and zeroes.
Luckily for them, they have enjoyed a regulatory moat. Financial disruption was slower to arrive, but with fintech and DeFi that is starting to change, too. If incumbents in any sector want to avoid the fate of Borders Group, Blockbuster, and Kodak, they will have to learn that business agility can only be achieved if the entire organization aligns with that goal.
This concludes the first part of this essay. We now know what agility means and what a team can do to achieve it. We’ve also seen that teams can only go so far on their own. In the following articles, we take a broader view and explore the global level: how can organizations thrive in an increasingly competitive and digital environment?
