With the rapid pace of change in today’s business world, organisations across the globe, and not least in Switzerland, have realised they need to change the way they manage and organise work to stay competitive. Benefits such as increased customer value, higher product quality and enhanced employee motivation often attract organisations to Agile methodologies. However, our experience shows that attempts to introduce Agile ways of working for their own sake often fail. They must be introduced with a clear sense of how they will generate business value. The challenge of making the change to Agile ways of working is also made more difficult by outdated structures, mindsets and technology. Organisations need comprehensive change, a holistic transformation that encompasses structure, governance and technology as well as leadership, culture and capabilities, in order to deliver business value.
“Out of intense complexities, intense simplicities emerge.” Winston S. Churchill
The acceleration of technological progress and the growing amount of data available today are creating unprecedented levels of volatility, uncertainty, complexity and ambiguity - VUCA. We have more knowledge at our fingertips than previous generations could have imagined, and the sheer volume and velocity of information can be overwhelming. With fast-changing priorities and the need for rapid innovation, traditional structures and ways of working do not suffice. Most leaders in traditional organisations are well aware of the need to transform but, in the face of digital disruption, many respond with what they know best: more hierarchies, processes and instructions, utilising outdated frameworks and models. As a result, they often suffer from worsening employee engagement, efficiency and effectiveness. Complex problems cannot be addressed by simply applying more of something – whether it be data, structure and/or expertise. Instead, businesses need to learn, think, behave, and operate differently.
Instead of adding more layers, metrics, and roles, Business Agility simplifies our work; it enables a fast-moving, adaptive network of individuals to respond to customers and opportunities. Adopting this fundamentally different way of operating allows organisations to compete and thrive in the digital age by quickly responding to changes and opportunities. However, to truly embrace Agility, a holistic transformation across the entire organisation is required, encompassing structure, governance and technology as well as leadership, culture and capabilities.
Structure: An Agile organisation recognises that the pyramidal structures of the past are often detrimental to adaptability and innovation. Instead, it favours flexible networks of autonomous, customer-focused teams. Silos are broken to give way to high-performing cross-functional teams built around distinct missions, placing the customer at the centre of every endeavour.
Governance: Planning has fundamentally changed. In a rapidly evolving world, plans are often outdated the moment they are created. Business Agility prioritises planning over plans, assuming that the latter are inherently iterative and incremental. Annual budgeting becomes short horizon lean-budgeting; tide controlling is replaced with distributed decision-making; and bureaucracy gives way to the art of simplicity.
Technology: Our experience shows that many Agile transformations fail due to technical debt, combined with outdated technology and infrastructure. Therefore, continuous value delivery is an imperative in a world with constantly shifting customer needs.
Leadership: In the past it served organisations well to promote top performers to management. Decisions were made by individuals based on their quality of work, experience and knowledge. However, in today’s world, fast, effective decision-making must be in the hands of those closest to the information. Trusting leaders at all levels and empowering them shifts decision-making closer to value creation and reduces the need for centralised control.
Culture: Organisations need to consider culture if they want transformational improvement. Culture refers to implicit norms that are commonly accepted among employees and leaders, as well as behaviours and ways of working. Agility truly comes to life when leaders and employees create a secure environment, providing psychological safety, that favours fast learning and risk-taking instead of punishing failure.
Capabilities: To realise their potential, organisations need to shift from commonly held assumptions to empirical management based on data and stakeholder interactions. Collecting continuous and direct feedback from a broad set of stakeholders is key to an Agile organisation that puts the customer at the centre. The definition of success moves from an individual “my” to a collective “our” as everyone contributes to value creation.
Transformation: a journey that takes different paths
Business Agility is the ability to quickly adapt to create value for customers, society and shareholders. To achieve this goal, organisations need to move away from legacy technological and organisational structures and adopt leaner structureswhile embracing a culture of trust and decentralised decision-making. But many efforts to implement Agile delivery methods and organisational structures fail because of a “one size fits all” approach, insufficient understanding of the context, and organisational debt.
While most agree on the theoretical principles, questions emerge. How do we set the new structure in place? How do we enable adoption of a new culture and ways of working? What does this mean for our governance and policies?
Successful transformations start at the core of an organisation. According to the latest Deloitte Human Capital Trends, purpose is one of the key drivers of organisational success. It provides teams and employees with a sense of belonging and intrinsic motivation. Linking every aspect of day-to-day work to a joint value enables teams to see how they contribute to the overarching mission of the organisation.
Once the core value and purpose have been defined, the means to achieve them can be explored. An Agile transformation is not the goal itself but the means to achieve business outcomes. In some cases value might best be created through Agile structures and ways of working. In others traditional approaches may serve the purpose as well or even better. A one-size approach does not fit all – a holistic transformation always needs to be seen in its unique organisational context.
Organisations experimenting, learning and navigating in complex environments often turn to experienced professionals to help them deal with the many complexities. At Deloitte, we support our clients by analysing and addressing their unique needs, desired outcomes and environment to ensure that Business Agility will make an impact. We use our Agile expertise to help clients in a wide range of industries achieve better outcomes. Our experience helps us identify patterns, challenges and success factors that cut across sectors and make or break the success of Agile transformations.
Our knowledge of common pitfalls means we can help our clients successfully navigate around them. One of the biggest pitfalls is the perception of Agile as a universal remedy, applicable to any challenge or project. Instead, we need to differentiate between complex problems and standardised, transactional tasks. The former require higher adaptability and therefore Agility, whereas the latter can be optimised by a mere increase in operational efficiency.
Another typical pitfall is underestimation of the role of Leadership, which is crucial to elevating Agile transformations from terminology and labels to truly transformed mindsets and behaviours. Where leaders are engaged and enabled through targeted change management interventions, they are empowered to “go first” and lead a holistic transformation at all levels of the organisation. Our way of working focuses on the outcome: we are people-centric (providing tailored training and coaching for your leaders and teams); collaborative (working with you to customise methodologies and frameworks to your needs); incremental (helping you generate quick wins which are key to any successful transformation); accelerated (using Agile methodologies as a starting point for faster results) and holistic (considering your context to help maximise value).
At Deloitte, we build on extensive experience in Agile transformations on a global scale. We are part of a global network of Agile practitioners and partners and have an established transformation approach to help organisations become Agile. Transforming from a traditional organisation to an Agile one requires significant change. Deloitte can help you navigate this change and persevere as you scale from an assessment of existing Agile practices to training, coaching and implementation.
