A mere memory of Project Management
Can we really expect the product organization to be the full solution to delivering customer value?
Business agility remains a highly prioritized capability within many organizations in order to achieve cost efficiency, flexibility, and adaptability to the rapidly changing market conditions of today. However, there are some challenges in the journey toward business agility, which can be managed through a clearly communicated purpose behind the decision to change.Progress toward this purpose needs to be continuously evaluated and new goals need to be set – all in transparency with the rest of the organization. Furthermore, traditional governance and leadership need to be adapted to agile ways of working. This leads to an increased understanding of the importance of long-term, cross-functional collaboration within the organization, which is necessary in order to generate value and impact rather than results and output. It also leads to an understanding of how organizations reorganize to create value through product orientation as opposed to project management.
In a survey conducted by Deloitte, it is found that an important success factor in managing change and disruption is "Think big – start small" – an approach that challenges organizations in daring to experiment with small improvements to achieve a long-term goal. Additionally, we see that nearly 70 percent of respondents view agility as an optimization tool to achieve cost efficiency, which is expected given the tough market conditions. We also see that business agility contributes to cost efficiency by enabling companies to respond to changes and reorganize based on new and changing market demands in a flexible and smooth manner.
Although many organizations see the benefits of being agile, there are four challenges that stand out in their journey toward business agility. Firstly, our survey found that more than half (57 percent) of respondents do not see a clear purpose in changing their ways of working. Furthermore, we see that over 80 percent think that goals and success criteria in their organizations are measured in an unclear way, if they’re measured at all. They also think that there is a lack of transparency and continuity in the measurements. Additionally, we see that organizations face challenges when it comes to organizing their delivery teams based on value streams, with nearly 60 percent of respondents working in an organization that does not have teams organized to deliver value. Lastly, we see potential for improvement in organizations when it comes to applying a governance model that balances centralized and decentralized decisions to adapt to customer needs and market changes. The majority of organizations involved in our survey (51 percent) currently lack such governance. Overall, these areas constitute the challenges that organizations experience in their transformation towards an adaptable and efficient operation.
The survey results reflect the trends we observe with our clients. Four key trends supported by the survey are
- Agile ways of working are becoming relatively common, and the majority of companies have started to apply modern ways of working in their operations. This strengthens the need for simplification of agile methods and frameworks, which can often be quite complex.
- A transformation of ways of working and organization often lacks goals and success criteria that are aligned with the business strategy.
- It is increasingly common for our clients to transition into product organizations. The scope and duration of various development initiatives are becoming more flexible given a dynamic market, where modern ways of working are more suitable than traditional ones. Both digitalization and transformations of ways of working lead to significant cultural and organizational changes – one example is that of resources and competencies attracting work, rather than being placed in temporary contexts for work.
- We see that many organizations choose to set up dual operating models – one functional, competence-based hierarchy and one cross-functional, optimized to deliver customer value. This leads to greater challenges regarding the need for collaboration, communication, and clarity among all roles within the organization. The first noticeable challenge concerns middle managers, who often do not have a clear role in the delivery organization. For the organization to achieve optimal outcomes with the transformation, it is necessary for the competence and delivery organizations to collaborate with clear frameworks and guidelines.
In summary, several organizations have adopted SAFe and agile ways of working and seen positive results, primarily in cost optimization and adaptability. At the same time, connected to the challenges mentioned above, many organizations admit that there is a frustration that the expectations are higher than what is delivered by the new agile ways of working. Specifically, there is an expectation that the new ways of working will solve more challenges around collaboration and economies of scale than what is achieved in practice. We believe that the reason for this is the failure to move from 'doing agile' to fully 'thinking and being agile'.
It is about changing behaviors and mindset, and using the tools and methods available to support the organization and the people, rather than the other way around. Without this effort, it will be difficult for organizations to reach an optimal state within business agility.
The report aims to compile and convey insights about the pulse of business agility in Nordic organizations. The study reflects responses from companies in eight industries and four Nordic countries. The survey is focused on organizations striving to work product-oriented for development and operations both on a small and large scale. The data was processed from Q4 2023 until the publication of the report in Q2 2024.
