In recent weeks we’ve explored key shifts in digital, most recently considering how to maintain digital transformation momentum as lockdown unwinds. This week we explore the shifts that enable organisations to be more adaptable in these uncertain times.
In order to deliver business and customer outcomes more frequently and at pace, organisations are increasingly adding agile capability beyond software development where it originated. The latest 14th State of Agile report indicates that Operations, Marketing, HR and Sales teams are increasingly adopting agile practices.
Move from functional silos to organise around Value Streams
To meet increasingly complex demands, organisations are adopting new digital business models and a focus on customer experience that enable them to quickly pivot their activity. Siloed, vertical organisations with layers of management that slow information flows and decision making are moving to flatter, horizontal ones. Here authority is delegated and communication flows readily between teams, unimpeded by layers of management.
Organising around value delivery gives agile teams end to end accountability for initiatives on a perpetual basis. No longer do we manage a project and step away when it’s complete – instead we look to teams to collectively own that product, journey or service, continually adapting and maintaining it to meet customer needs. By organising groups of teams, or individual teams around the flow of value, we align them around a common purpose and set of business and customer outcomes that are largely within their control.
For example, a Financial Services organisation we’re working with has orientated around member journey hubs that have end-to-end accountability to shape, build and operate to deliver value defined by its Objectives and Key Results.
Clear line of sight from teams to organisational goals
Setting quarterly Objectives and Key Results (OKRs) provides team members with clear line of sight from what they’re working on to the organisation’s goals. OKRs provide the rigour of measuring results, forming ‘the contract’ between teams and the business. As teams mature, their contribution to OKRs and the planning process can become increasingly influential in setting the context for those organisational goals, particularly as the entire organisation becomes more innovative.
Work in small multi-disciplinary teams that endure through time
Aligned to Value Streams, we bring together high-performing multi-disciplinary teams, each of 5-9 people with skillsets that enable them to accomplish their work with minimal dependence on others. Jointly responsible for the team’s achievements there is no ‘boss’ within the team; commitment, openness and shared decision making are essential. Quality of conversation, willingness to challenge one another and to try new approaches are the hallmarks of these high achieving teams. They are also the foundation of consistent performance which engenders trust and eventually empowers team autonomy. Product Owners keep teams honest to the customer, so that decisions are made as close to the customer as possible.
Given the increasingly complex nature of work, team productivity and effectiveness can be severely impacted by changes in team membership. It’s important that these small teams are able to endure – they develop deep understanding of the product, journey or service they’re responsible for, and are able to truly influence its quality.
T-Mobile redesigned its call centres by grouping into teams and encouraged to collaborate and innovate. These teams include all the requisite skill sets, including tech specialists. In the three years post-introduction, customer satisfaction improved – NPS increased by 56%, cost to serve and customer churn dropped to all-time lows and, with happier teams, annual representative attrition dropped by 48%, and absenteeism reduced significantly.
Quicken the organisational ‘pulse’
Established businesses typically run on annual budgeting cycles with change budgets allocated by project. Moving to quarterly planning cycles aligned to Value Streams makes it easier to promptly re-prioritise funding to respond to threats and opportunities. Data collected by agile teams informs prioritisation and faster decision cycles by understanding value created and the impact of delay.
To innovate like a start-up, Venture Capital style funding models are increasingly being applied in established organisations. Funding is more closely aligned to smaller, MVP-style incremental deliveries, that test a hypothesis and enable rapid determination of next steps.
The pulse of agile organisations quickens tangibly as they increasingly work to a new rhythm of quarterly planning, two-weekly sprints and time-boxed 15-minute daily stand-ups, designed to resolve blockers and facilitate progress. To achieve this quicker ‘pulse,’ discipline and planning are essential; careful planning and refining of work avoids waste and aligns dependencies so that teams are able to pull work and complete it without delay.
Create the environment to quickly pivot without changing organisational hierarchy
These fast-moving, highly skilled and empowered teams work within a series of guardrails that provide the organisational wrapper. The policies, architectural guardrails, security and compliance, branding and so on of the rest of the organisation continue to apply – the key is to set them at the right level so as not to become a straightjacket, and to be supportive of the Value Stream horizontals. The weighting is often skewed to the horizontal Value Streams rather than the verticals, to create an element of inherent flexibility. In an insurance business the burden of late-stage authorisation was minimised by involving compliance within the teams, and fast turnaround, small approval steps within the build.
Organising around Value Streams, with small multi-disciplinary teams, enables us to adapt work content and pivot quickly, without changing organisational hierarchies; ideally suited to today.
Source and retain digital talent for high performing teams
In the digital era, talent sourcing also requires a new approach. Digital leaders recognise that talent is now ‘open’ and extends beyond the statutory employees of an organisation (i.e. permanent employees and contractors). Many organisations now look to open source talent in new talent pools, such as online product / service communities and innovation contests. They’re also engaging freelancers and forming partnerships outside of their traditional value chains to access scarce digital talent. A great example is Vodafone who are partnering with the University of Birmingham to deliver a four year Digital Degree and help build their own pipeline of emerging digital talent.
Organisations also need to develop and foster employee value propositions that are more meaningful and purpose-led. Employees will likely still want security, predictability and status but now in a different context. Security becomes less about lifelong employment and more about lifelong employability, through continued renewal of skill sets. Employees are not giving up predictability, but their timelines are shortening and their willingness to experiment in different roles and functions is growing. Reward is less about pay, more about purpose as leading digital talent often seek more than extrinsic motivators such as salary and rewards. Team working is also key to their job satisfaction, with multi-disciplinary teams building out their wider business capability. A large part of why digital natives are winning the war for talent is their focus on intrinsic motivators that create a sense of purpose and belonging through flexibility in location and hours, fun, teaming, social purpose and a license to learn.
Leadership and organisational readiness to change and to learn continue to be a primary challenge. It is often the difference between organisations ‘doing’ digital not ‘being’ digital. Our next blog will explore the cultural change needed to support digital shifts.