Enterprise Scrum Business Agility

(Excerpt from Ch3. Business Agility from the book “Enterprise Scrum: Business Agility for the 21st Century”, 2018, Mike Beedle)

Just about everyone you talk to, has a different understanding of what Business Agility is. This comes to no surprise, since the term has been used increasingly to the boiling point of sizzling buzzword in just a couple of years. To make things more complicated, agile and agility itself have been defined and re-defined now for different domains and industries — proof of that is all the emerging Agile Manifestos everywhere. So what is Business Agility?

We were blessed to create a working group of Enterprise Scrum practitioners in 2016, formed by executives, managers, consultants, coaches and trainers, that through months of painful debates and opinions, came to an agreement as to what Business Agility meant. This is our definition. It is a definition, not the only definition of Business Agility:

Many discussions took us to the different types of change that would be required; for example changes in customers, markets, technology, regulatory, etc.; but in the end we all agreed that regardless of the source of change, Business Agility was related to the ability to “adapt quickly and effectively” to “deliver maximum value and customer experience”.

Clearly, each and every company in the world would benefit with Business Agility. But how exactly can we accomplish Business Agility?

Enterprise Scrum, as a generic framework to implement Agile Management for just about anything, provides a way to implement Business Agility.

Again, it is a way, not the only way. Let’s quickly introduce Enterprise Scrum:.

You create 3 roles:

  • Business Owner — provides both vision and support
  • Coach — provides coaching to do the best Enterprise Scrum possible
  • Team — does the work

You follow this process:

  • Vision — what you want your company to be
  • Initial Value List — what you want to do “one customer segment” at a time
  • Cycles — get organizations to have Business Agility

Each Cycle has:

  • Planning — what we want to accomplish
  • Collaboration — get things DONE passing a DOD (definition of done)
  • Review — review what we got DONE, and where we are in all important things
  • Improve — find ways to improve in all important things

Act according to Agile Values and Agile Mindset to create an Agile Team with an Agile Culture.

When Enterprise Scrum is used for Business Agility, is both a way to transform into Business Agility and as the transformation takes place, it becomes a framework for company management. Enterprise Scrum is a true framework, and a such, it needs to be configured and complemented with other techniques to make it work. As the first CEO that managed an entire company in an Agile way using Enterprise Scrum starting 2001 (New Governance Inc., one of the divisions which later became who we are today, Enterprise Scrum Inc.), and as some of the first training, coaching and consulting companies that helped companies of all sizes transition into Business Agility since then; I hope you find this introduction to Enterprise Scrum Business Agility useful in your implementation of Business Agility.

Business Agility Stories

As time goes on, we have either seen or experienced with our clients very many Business Agility stories in vast different industries: banking, insurance, pharmaceuticals, manufacturers, services, etc.

All Business Agility stories are different; and therefore, all implementations of Business Agility are different. Beware of those that sell you “cookie cutter” solutions. Wouldn’t that be nice? Of course, some have more similarities than others, but most of them are very different, for a myriad of reasons that we will try to explain in the next few pages.

But what is not different are the Business Agility principles and patterns used. The practices vary more, but even when practices are different, the underlying principles and patterns that drive them are the same. For example, the Business Agility stories of two growing unicorns could be more similar, but they could also be very different from each other, and radically different from the Business Agility story of a 100-year old story undergoing a Business Agility Transformation.

But let’s start with an example story, so you can see how the different elements of Business Agility come into play.

Let’s assume that a well-established large multi-national bank starts thinking about doing a Business Agility Transformation. Let’s call our bank, Bank Global, to make it a little more real.

First, let’s ask, where can the idea to do Business Agility can come from? Who supports it? In reality, the idea can come from almost anywhere:

  • The Board — doubtful … but possible. Unfortunately for most companies, the boardroom has been the last to hear about the benefits of Business Agility, but if it happened there, you are very extremely lucky!
  • C-level suite — It is possible, and probably because a management consultant whispered “that idea” into their ears. But it is safe to say, that while most c-level executives have heard the term “Business Agility”, very likely they don’t truly understand what it really means.
  • Operations Management— This is actually the most likely scenario, that someone from operations within a department, business process, business unit, a customer segment, or even a product or service, including PMO or BMO threw the idea around, and now is seeking support from upper management for a pilot project.

As we will see, this is very important, because if there is not enough support or alignment — if you are going to be constantly fighting with “upstream colliding direction”; and it is going to be an up-hill battle, you need to try to fix this as soon as possible, or else reconsider. It is safe to say, that because a Business Agility transformation will, at the very least affect a customer segment, and at most the entire company, that you need to have strong alignment across the board, the c-level suite and operations.

This is why at Enterprise Scrum, we do board level, c-level suite, and operations 2–4 hours presentations: seeking common understanding, sense of urgency and alignment. One of the tools we use is a Business Agility Alignment Map, which basically has the company mapped into who is giving support to Business Agility and how.

Business Agility Transformation

Let’s start with a major insight: the Business Agility Transformation needs to be managed in an Agile way through Agile Management.

Let say for our example, that the idea started in Operations Management, and that they propose starting with a NEW small business unit with one of more customer segments, that is still a “question mark” in the BCG Matrix/Business Cycle (not making money or not making a lot of money). The first choice to transform could also be a single customer segment.

WARNING: Regardless of how you are organized, we don’t do Business Agility transformation of departments, processes, or single products or services. Yes, you can agilize those things, but Business Agility is about delivering better overall customer experience across the board — a much taller order.

Vision

Let’s also assume, as stated above, that there is good board level and c-level support for the Business Agility Transformation. This in fact, should be identical to the company’s Vision.

WARNING: Don’t make the Business Agility Transformation and the company management two different things, or a “project’, or a “program” — they should be the same thing.

Even, when you limit the Business Agility transformation to begin with to a business unit or customer segment; if you are “doing it right”, it really is about how you envision your company to operate in the future.

So, let’s assume there is an agreed upon Vision for the company that already includes the Business Agility transformation.

In my experience, the best way to get a good Business Agility started is through an internal group of passionate enthusiasts, believers, supporters of Business Agility. However, that doesn’t mean that they know what they are doing, or that what they propose is the better thing to do for the company.

The first concern, “are they capable?” has an easy cure: train them, coach them, support them with knowledgeable people. The second concern, “what is the best thing to do first in terms of Business Agility?”, is a little more involved. Let me explain.

Initial Value List

In Enterprise Scrum, we express what we want to do with an Initial Value List, in the case of Business Agility Transformation, a list of the organizations we want to transform. The list may have only ONE entry, and that is ok, as long as you are certain that is a good choice. This Initial Value List is a concept from Enterprise Scrum, that represents a list of what we want to do at any given time, and it is updated dynamically.

In my experience, it is useful for companies to entertain different options, even if they just end up with ONE choice. It is easy to do: hold a facilitated workshop among the appropriate players for the company. In the case of our fictitious Bank Global, get all the owners of the different customer segments together, and hold a facilitated workshop to try to determine options for “what to transform”. The goal is to come up with an Initial Value List.

Your Business Agility Initial Value List will be affected by:

  • what has a better payoff to be transformed
  • what is feasible
  • how energized and sold the people that are to be transformed are about Business Agility. You may want to teach them what it means through a Business Agility class, or so.
  • how you are currently organized: by customer segment (easier), by large powerful hierarchical departments (harder)
  • the knowledge of your own company — specially at the portfolio level
  • where there is better culture alignment
  • the size of the transformation proposed
  • your budget for the transformation and
  • the leadership support for it
  • etc.

WARNING: Avoid lengthy and costly “assessments”, “cost-benefit analysis”, “organizational maps“, “opportunity zones”, etc.; if it takes too much time to do the Business Agility transformation, you just killed all the agility by planning and analyzing too long.

Here is a unique opportunity that everyone doing a Business Agility transformation should take: even if you haven’t done a full transition into Business Agility, start looking at your company as a layered portfolio of business units with customer segments, and a queue of “upcoming business”. In fact, if you can re-org into customer segments, it would be very helpful. It is at this exact point, where you are transitioning to a Business Agility mindset.

You first want to choose something doable, that has good pay off, “green field” if possible, where there is both leadership support and cultural alignment, and most importantly where people really want to do it. This is compatible with the “Agile way”: prove something works then grow. This is the spirit of a TRUE Agile Transformation, transform one area all the way before you start with something else. This is the way we mitigate risk in Agile …by doing.

Why “green field” if possible? Because it is much easier to get started that way. When you start in “green field”, you start creating from scratch; translation: you don’t have to break cultural inertia, realign power structures, debug and restructure established processes, work with an engine that is “already running”, etc. But, it is not always possible to work in “green field”, unfortunately.

BCG Matrix
Business Cycle mapped to BCG Matrix

Ok, so you got to an Initial Value List, and is defined, prioritized, evaluated, has a coarse grain size (budget, people, etc.) In some cases, takes a few weeks to get there; in some other cases, up to a year. Again, if it takes too long, you just killed Business Agility.

Our goal is to convert one customer segment to operate with Business Agility .. before we do anything else.

WARNING: Don’t do phases across the whole company i.e. assessment, training, coaching, etc. Agile Management is all-at-once management, so we choose an organization as small as possible that has value, in this case a customer segment is the smallest possible choice, and we implement it to have Business Agility until we get it DONE to some degree of confidence.

What do we mean by DONE? Whatever we agree upon. This is a necessary and critical step in agility and your Business Agility Transformation — to define what criteria makes it possible to call a slice of the Business Agility Transformation a success. Nothing is ever perfect, so what we are looking for, is something that works with minimal problems. It is not a DOD (definition of done), binary like in software; it’s a fuzzier thing i.e is it operational? Can it live on its own?

For example, assuming that for our Global Bank, we have chosen as the first item on the Initial Value List the Retail Investor customer segment, what criteria will make the transformation call it a success:

  • Higher customer satisfaction
  • Better customer experience
  • Better employee engagement
  • Higher profits
  • There is Agile Leadership — both vision and support
  • Managed with Agile Management — Cycles with Customer-driven feedback loops
  • There is an Agile Organizational Design — the organizational design is optimal to support agility
  • There is an Agile Mindset and Agile Culture — there is cooperation, collaboration, sharing knowledge, etc. and espoused agile values.
  • There is Agile Innovation — we can quickly deploy more and better solutions to enhance customer experience

WARNING: These terms above are not thrown in at random or irresponsibly. They have very precise meanings that we will explain in a future publication. In our experience, to conduct a successful Business Agility of any size, you must know, understand, and be able to practice these disciplines; or otherwise you will very likely fail.

First Cycle

So, we start getting some work by means of Cycles. If you have never done Scrum or Enterprise Scrum, very likely this first Cycle will be not be very pretty. That’s ok .. in Scrum or Enterprise Scrum we cycle and improve!

WARNING: It is imperative to appoint the correct roles: Business Owner, Coach, Team, in this case for the operation of at least a customer segment.

Typically we have 2 nested Cycles: a) one for short-term accomplishments (2 weeks), and b) one for longer-term accomplishments (2–3 months).

Remember, since we are agilizing “one customer segment” at a time; the Business Owner is the owner of the delivery of value for that Customer Segment; the Coach is the coach to deliver the most Business Agility for that Customer Segment; and the team, is the team delivering the business value by getting things DONE.

What kind of work you do in the Cycles of Business Agility? Most of this will be in the Value Proposition, Channels, Relations, Marketing and Sales, Customer Service, Business Model, see the ES — BMC below, but also into existing customer segment operations, any re-org, analysis, restructuring, reassignment, re-purposing, process re-engineering, leanification, training, adoption of techniques, improvement of technical solutions, etc.

Each Cycle we have the following activities:

  • Planning — what we want to accomplish
  • Collaboration — do the work to get things DONE
  • Review — review what we got DONE, and where we are in all important things
  • Improve — find ways to improve in all important things
Enterprise Scrum — Business Model Canvas

More Cycles

What happens next? We do more Cycles!

We continue transforming our first organization until we reach a reasonable DOD (definition of done). Remember, in transformation work, this is a little fuzzier than other domains, so just be reasonable. But contrary than other domains, the organization transformed into Business Agility, continues their own journey into higher levels of agility.

As we reach DOD for our first organization — business unit, customer segment, and get some confidence to a stable Business Agility state, we can take another organization(s). As more organizations reach DOD, the portfolio of organizations managed by Customer Segment described above, will start migrating from none, to less to higher Business Agility until there is nothing else to convert, and you can only start NEW “green field” business units or customer segments in an agile way.

So the Agile Transformation leads directly into the management of an Agile Portfolio, which becomes naturally and organically company management in the bigger picture; that way you can both grow and manage your organization as you transition into Business Agility.

WARNING: Don’t force a schedule. You may get even more excited once you achieve some success, but the worst thing you can do is force people to move at an unrealistic schedule. Each organization can move at the pace they can. You even have to leave behind the concept of velocity espoused by Agile Management — no two customer segments or business units will even have the same velocity, to begin with, because they are composed of different people. In Business Agility the concept of velocity does not apply.

In conclusion, in my experience of doing Business Agility for the last 17 years, it has a much better chance to work when ALL of these things are present:

Leadership Support and Alignment. If you don’t have adequate leadership support and alignment across the board, c-level suite, and operations; you are not ready to start. Period. This unfortunately is the kind of thing that may need board approval, and yes, it may get very hard to get. As we will see in the following section this may require changing the attitudes and values of the leadership team, and removing many organizational impediments. This is why we do 2–4 hours, leadership presentations and workshops.

Proper Customer Segment Definition — Be very careful how you define your customer segments. Time and time again, people and companies get confused as to who exactly are their true customers. This may seem strange to say, but many companies do not understand very well, or lost focus and attention to their customers. In some cases, it is a miracle these companies are still somewhat successful despite themselves.

Green Field then Established — if you can choose “green field” customer segments or business units, start there — it is so much easier. In other words, start with Rising Stars, or Question Marks, then go to the Cash Cows. Don’t worry too much about the Dogs. Build your confidence, then come back with the experience and transform the rest. Of course, that’s not always an option.

Deep Knowledge on Agile and Business Agility across the board. Business Agility requires proper knowledge and skills. This means everyone understands the Business Agility model from their point of view and can act accordingly to a high degree of confidence. This is why we teach courses for:

  • executives: Agile Executive
  • executives and operations: Business Agility, Agile Portfolio, Agile Transformation
  • operations and supporting functions: Software Scaling, Software, Marketing and Sales, etc. (Soon to be added HW and Compliance)

TRUE Agile Transformation. — Start with a limited area such as a small business unit, a customer segment, and make it work there; then do another customer segment. Please don’t do a global phased-based transformation — it will be long, tedious, risky and may not yield any benefit! You need to prove that Business Agility can be done at your company.

High Purpose. Invite people to do something great, not only to participate, agree, or get their consent.

Co-creation. Invite people to co-create their future. It really doesn’t work any other way.

I hope this is useful for your Business Agility Transformation; if we can provide any help, contact me directly. We have the best Business Agility people on the planet working with Enterprise Scrum.

Mike Beedle

CEO, Enterprise Scrum Inc.