November 4, 2014

Some Thoughts on Agile Transformation in Big

Companies
WRITTEN BY Mike Cottmeyer

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As usual Ive gotten a little sidetracked on my Agile 101, 102 series of posts. Ive got the 201
post half finished, but havent been able to spend the time getting over the hump. That said, I want to
divert just a little and talk about agile in general, explore some of what it is, and a little about where
its going. I think we have created a bunch of confusion in the marketplace. I am under no illusions
that this post will be the definitive explanation, but I spend a TON of time talking to people and level
setting before I can have any kind of intelligent conversation on agile, so I want to explore some of
the points that I think resonate.

Can We Define Agile?

First of all back in my early, early days of community involvement at V1 I was really wresting
with this untangling language around agile. I used to break the conversation into a few key areas:
project management, product management, leadership thinking, and technical practices. Today, I find
myself taking a slightly different angle. I tend to see agile discussed as a cultural phenomenon,
sometimes as a set of practices, and sometimes as a way of structuring and governing how your
company works. More often than not, agile is setup as a counterpoint to some of the most ridiculous
examples of bad management we can come up with in an industry.

From my point of view, agile is all of these things collectively and none of these things individually.
Agile is about having a rational system of work in place where people are engaged and can thrive,
but one that produces the business outcomes that our stakeholders are counting on. When we get too
myopically focused on one aspect over others, it is easy to start talking in platitudes and one-size-fits-
all adoption approaches. Every organization Ive ever worked with has been vastly different and,
while certain patterns apply, solutions are always unique to the people that are impacted by the
change.

The first line of the Agile Manifesto says that we are uncovering better ways of developing software
by doing it and helping others do it. How we implement agile is supposed to change over time, and
how it changes should be guided by the values and principles in the Manifesto. The challenge is that
the values and principles are supposed to guide the practices and structures we choose to implement.
The values and principles dont live by themselves or in a vacuum. To successfully implement agile,
we have to have a system of delivery and supporting practices which enable the values and principles
to be lived out.

The Problem With Big Companies

Ive been focused on what I call the Big Company Problem since I left CheckFree more than 7
years ago. Back in the day, we were building complex systems of systems for the financial services
industry. Products of products. Multiple overlapping and intersecting value chains. Heavy traditional
governance and pockets of agile scattered throughout the organization. This was an environment with
specialized business domain expertise, multiple diverse technology stacks, an organization that
demanded 5 9s reliability where downtime immediately impacted revenue and incurred penalties.
How does one begin the process of agile adoption in any meaningful way in an environment like
this?

Many of us suggest that big and complicated is the problem and that we need to be small and
simple. I agree but, these companies ARE big and complicated so the question becomes HOW to
help them become small and simple. Just saying BIG is bad and you should be SMALL doesnt help.
How do we get there? What is the path from A to B? Is adopting an agile value system enough? In
the presence of the right value system, will the right delivery systems and practices emerge? In the
presence of the right practices, can I impact the end-to-end system of delivery and make the cultural
changes I need to make?

Culture First?

The problem with the culture first mindset is that there is practically no way to change enough hearts
and minds to get everyone on board fast enough to produce results in the timeframes we are working
against. Even if I could get everyone to adopt an agile mindset, we have real governance issues and
audit requirements that often cannot be changed overnight. We have tightly coupled technology
stacks, tightly coupled product requirements, imbalances in capacity and demand, and bottlenecks all
over the place. Solving the problem is a matter of redesigning the system of delivery. Not everyone is
an expert in designing systems, and even those that are dont agree on the best path forward.

There are clearly some places where a culture first transformation can work. There are definitely
some where it wont. As an industry, we have to have an answer for when the scale and complexity
are such that self-organization around the problem isnt a viable approach. Again, the right company,
the right business problem, the right underlying technology, and the right group of really smart
people can get a ton of stuff done given the right degrees of freedom. There are some environments,
though, where this is recipe for chaos. I personally think it is irresponsible to suggest that cultural
transformation is going to fix this. We cannot always assume that if enough people get it agile will
begin to take hold.

Practices First?

Here is another one that I believe is driven by our long history of thinking of agile as a set of
processes. Most top down organizations are accustomed to using process to pull together disparate
working groups and coordinating activities across them to create larger deliverables or achieve
broader organizational objectives. In many of these cases, the underlying organization, and maybe
even the underlying organizational culture, doesnt matter all that much. All we need to do is
document a process that people can follow and, provided they actually follow it, well get the
outcomes that we desire. People assume that agile as a process will behave similarly.

Agile is different. You cant take a set of functionally siloed teams, operating under heavy
management control, traditional phase gate governance, fixed time, cost, and scope constraints, and
tell them to do whatever process they want. You cant tell them that agile is okay, but then hold them
accountable to live in the same organization, under the same rules, and under the same constraints as
a waterfall organization. The agile process in and of itself doesnt make any rational sense outside the
context of a team based organizational model, an agile governance framework, and a mindset that
allows for some adaptation to the unknown. It doesnt work.

Practices alone will never solve this problem. All we end up with is a bastardized form of agile where
people go through the motions, but where agile doesnt live up to the value that was promised. In
order to do agile well, you have to have teams, you have to have backlog, and you have to have the
ability to produce a working tested increment of product at the end of each iteration. This involves
rethinking how you go about forming teams, how teams work together, and how value is
coordinated. In the presence of teams and practices, I believe that the right thinking can emerge.
Structure First?

Im a big believer that agile culture and agile practices are essential for long term sustainable
organizational agility. That said, I dont think you can train your way into it and I dont think you can
believe your way into it. I think you have to start with a team based organizational design where the
flow of value is governed across teams using an adaptive governance model, based on lean/kanban
principles, where WIP is limited, capacity and demand are balanced, bottlenecks are identified and
dealt with, and management is invested in improving the overall system of delivery. Only within this
kind of organization can an agile culture emerge and agile practices thrive.

I also dont think that people intuitively understand these kinds of systems and I dont think that most
organizations will self-organize their way into them. Most people tend to think about optimizing
what they can control and getting better only at what they are responsible for delivering. People are
often self-interested and will consciously or sub-consciously advocate for system designs that are in
their best interests. In the long run forming teams, decoupling dependencies, reducing complexity,
and creating an ecosystem where small, independent teams can self organize within their boundaries
is the only model I believe will work.

So, I agree that we need to be small and simple, but getting to small and simple much of the
time is a process of forming teams around business problems and technology, progressively
decoupling them from each other, reducing dependencies, and dealing with bottlenecks. There are
real issues facing large enterprises, there is a ton of momentum around the old way of doing things,
real organizational and technological constraints, and just telling people to self-organize around a
new system of delivery one that they may or may not collectively understand is often a recipe
for disaster.

Structure then Practices then Culture

We do though have a bit of a chicken and the egg problem here. How do I get permission to start an
agile transformation if I dont have a leader with the right mindset to give it a try? Id suggest that
you at least have to have a leader that recognizes there is a problem and is open to alternative ways of
solving it. Id suggest you begin by focusing on your business goals, articulating a strategy to create a
team based organizational model, and model based on iterative and incremental delivery principles,
one that uses agile and lean methodologies for delivery and governance, but that operates within the
operational and cultural constraints of the existing organization and its policies.
You teach this organization agile technical practices and management practices at the team level and
adaptive lean governance practices at the program and portfolio level. You teach the organization
how to deliver with reliability and predictability within that framework as you build trust in the new
way of working. As we learn the capability of the new model and build trust with the organization,
we create the opportunity to influence hearts and minds and create the environment where people feel
safe to take chances and absorb risk with new ways of thinking that challenge their old ways of
thinking.

The Role of Leadership

These kinds of changes have to be led with top down intent, but with a bottom up implementation.
People have to be engaged and do ultimately have to be bought in. That said, buy-in will only come
when people realize that the new system is working and the new system rewards the new behaviors.
Once we have the rational team based system of delivery, new practices that support operating the
new model, and a new mindset that enables us to unleash the power of the new system of work we
can start really improving as an organization and start tapping into the promise weve been reading
about with agile all these years.

IMO its not so important to talk about agile as structure, practices, or culture it really is all
three. It doesnt matter if we are talking about agile as a set of management practices, an approach to
product development, a leadership framework, or an approach to software craftsmanship. It is all of
those things as well. But when its all those things living in an integrated system of delivery, where
all the parts work together, when they are no longer in competition, where we really start to see the
value. Things have to work as an integrated whole. Its the working together as an integrated whole
that is going to make this take off. Not just some team level agile practices or pockets of agile
mindset in a vacuum.

Maybe this is all obvious, but there is a lot of debate about where to start with your agile
transformation and whats important to focus on first. If not debate, then different messages and
approach in the marketplace around what works. I think that many folks work in broken
organizations and cant see a path forward because without the support and direction of your
senior leaders, nothing Im talking about is even possible. As an industry though, once we get the
messaging right, you are going to see more and more agile adoptions led from the C-suite, not in silly
Dilbertesque caricatures, with informed intent around how to build organizations with a systems
based perspective.
In most large organizations, bottom up is not an option without leadership acting from the top.

WRITTEN BY Mike Cottmeyer

- See more at: http://www.leadingagile.com/2014/11/thoughts-agile-transformation-big-
companies/#sthash.LkHlkBJG.dpuf