Wildly popular in software development, an agile mindset to conducting operations can be successfully applied to businesses across industries. However, what does enterprise agility mean? Furthermore, how can companies adopt the agile way of working and improve operations? Let’s find out.
What Is Enterprise Agility?
Enterprise agility describes a company’s ability to swiftly adapt to its business environment based on feedback from direct stakeholders (e.g., customers) and changes in market demands.
Agile organizations comprise cross-functional, self-sufficient teams that collaborate efficiently, being able to maximize productivity using fewer resources. Cross-functional teams have all the necessary skills to complete a task, project, or product.
Business processes in agile teams are based on iterations: cycles of work ending with a working version of a product. Teams improve the product based on feedback collected with every new iteration. The feedback is collected from users, which ensures that the product provides as much value to the customer as possible.
When companies adopt an agile approach, they can expect a boost in employee engagement, operational effectiveness, and output quality. At the same time, they can observe a reduction in costs and faster time-to-market.
Why Go Agile?
Companies should go agile to:
Improve Employee Engagement
At the core of agile principles lies the spirit of collaboration. Agile teams have a clear view as to how their work fits into the bigger picture—this lets team members collaborate more creatively and purposefully.
When all team actions have a defined purpose, it creates a sense of autonomy and ownership. Ownership and a broader project context enrich the job experience: employees are empowered to contribute and solve problems. A team’s tangible impact on all aspects of a project enhances productivity and promotes innovation.
When there’s purpose and meaning ingrained in every employee action, motivation and engagement soar.
Boost Customer Satisfaction
In the agile methodology, the customer and their needs are placed at the center of company operations.
This mindset builds a unified, company-wide mission statement that guides all decisions across departments toward the same goal—to provide value to the customer.
An agile mindset thus lets teams align on customer value propositions. This decreases the number of handovers and increases accountability and transparency that directly translate into customer satisfaction.
Cross-functional teams can target specific product offerings or outputs and deliver seamless experiences to different audiences. The self-sufficient, cross-functional team setup boosts efficiency and reduces time-to-market. Agile teams can decrease the response time to the competitors’ offering.
Speed Up Time-to-Market
The cross-functional character of agile teams lets them complete business objectives on their own, without multiple handovers to different departments. In an agile structure, where hierarchy is replaced with purpose-based teams, productivity improves significantly. Product owners in agile teams have autonomy as to the scope, timing, and budget of a project. This works to eliminate an otherwise lengthy approval period.
When departmental silos and handovers are removed, the time to turn concepts into products drops, speeding up product releases.
The agile approach calls for work to be completed iteratively—each iteration (sprint) is a fully working release of a product or service.
To deem a release working, the team needs to test it, which naturally results in better quality in the following iterations. On the other hand, the traditional method of project delivery might produce errors discovered in late phases. This is because testing happens near the end of project delivery, when the product is complete. With a near-complete product, the amount of testing necessary to check it often results in a delayed release or low-quality product.
Improve Operational Effectiveness
By constantly refining the process of product development based on feedback, organizations with agile principles at the core exhibit greater operational effectiveness.
To further streamline their work, agile teams can use OKRs (objectives and key results). OKRs are trackable deliverables of high-level initiatives. For example, the company’s objectives can be to achieve high revenues and increase profitability; the key results of these objectives can be expressed as specific goals (e.g., commence sales in another country or increase gross profit margin by a defined percentage). The graphically illustrated progress of OKRs helps ensure good project organization and streamlined output delivery.
Whenever glitches or bottlenecks occur, the agile setup lets teams make project adjustments swiftly and early on. When there’s a need to pivot (completely change the direction in which the work is going), agile teams can quickly redefine their approach, well before significant time is wasted on faulty or ineffective features.
Purpose-based teams decrease the necessity for handovers across different departments. The high focus of agile teams and trackable OKRs result in seamless business operation without departmental miscommunication. Agile organizations therefore adapt fast to changes in market demands.
Save Costs and Reduce Spending
The combined benefits of the agile approach offer numerous cost-saving and growth opportunities for businesses.
For example, by restructuring teams to be self-sufficient and cross-functional instead of working in the traditional hierarchical model, companies can delegate the employees left after the reduction of management layers to new and innovative tasks that facilitate company growth.
When teams become better at utilizing and managing resources, cost-saving opportunities will quickly emerge.
How to Create an Agile Organization?
The agile approach covers multiple aspects of an organization, from structure and business strategy to business processes and employees. Agile principles work because of their highly collaborative nature and direct project ownership of teams—the work doesn’t migrate from department to department.
Agile transformation therefore calls for a complete overhaul of the work mindset. Departmental silos have to be broken down to facilitate collaboration and productivity.
Here are the basic steps necessary to create an agile team, department, or company.
- Make a case for the transformation that will reverberate across the whole company. Remember the customer-centric approach.
- Recognize adoption challenges specific to your company’s culture, technology, and business model.
- Phase out the adoption. Start on a team or project level. Learn from the experience and optimize processes based on new insight.
- Build highly empowered cross-functional teams capable of consistent delivery of output.
- Create a supportive infrastructure (tools, employee training).
- Track the effectiveness of the adoption through OKRs.
- Expand the adoption of agile transformation to other departments or projects.
- Improve business processes based on experience and feedback.
Note: Initially, the benefits of agile transformation will take longer to appear. It takes some time for the newly agile teams to adjust to the new ways of working.
What Are the Considerations for Going Agile?
Because the switch to enterprise agility requires a complete overhaul of the known project management strategies determination to stick to agile principles is paramount.
Complete Adoption and Restructuring
There are no half measures in the agile approach. If the transformation is incomplete, the teams will underperform.
The company-wide understanding of agile principles and the importance of the transformation to operational effectiveness is critical to its successful implementation.
Highly Motivated Employees
Leaders are responsible for nurturing agile culture within teams and instilling agile principles among team members. However, highly motivated employees are key. There’s no place for mediocrity in engagement.
How to Measure Enterprise Agility?
The effects of agile transformation can be measured by analyzing the value delivered by newly agile teams or by comparing the results with the former setup.
There are two considerations here.
If you are just starting to deploy the agile approach, you can use the data from before the transformation to measure agility. However, this approach can be flawed as agile teams need time to adjust and start delivering the expected value. Moreover, measuring the results of agile transformation, using traditional metrics often fails because of the highly flexible nature of agile teams.
Instead, you can establish baselines as the newly agile teams begin to produce output and then measure the desired metric as per that team’s deliverable. In this measurement method, OKRs are highly useful, especially those developed for specific teams.
Enterprise Agility Gives Businesses an Operational Boost
Traditional ways of work have been showing shortcomings for some time now. To truly improve productivity, quality, and resource utilization in companies, businesses should adopt an agile mindset. Agile organizations are constantly improving their processes to deliver the desired result. By utilizing insight from each agile iteration, teams can polish their approach to increase productivity. When embraced company-wide, agile principles help businesses continue to improve operations and increase productivity years after the initial switch to the agile ways of work.
Technology supports the adoption of agile principles by opening opportunities for secure communication on the executive level as well as giving companies a competitive edge. Companies intending to go agile have to start with establishing a clear purpose behind the adoption of the agile ways of working.