Reasons why large companies are becoming agile

Not so long ago, if you wanted to find a business, you didn’t use Google or Facebook, you turned to the White and Yellow Pages, produced by Telstra’s advertising and search arm Sensis.

At the time, Sensis was a massive online directory that saw itself as a legitimate local competitor to Google. In 2005, at a time when Sensis’s rapid growth was outpacing other search engines, then-CEO of Telstra Sol Trujillo even went so far as to say “Google Schmoogle.”

Sensis was considered to have one of the best performing agile software teams in Australia, delivering progressive features such as restaurant bookings, maps, reviews and live auctions through search tools like as The Trading Post, Whereis and Citysearch.

Investing in innovation isn’t enough

But the Sensis story demonstrates that even the most innovative companies cannot be insulated from rapid shifts in consumer behaviour, or advances in technology. Fast forward to today and Sensis had been overtaken by competitor search engines, and revenues have taken a serious hit. What happened?

According to current CEO John Allen, the problem didn’t lie with product innovation. “We have terrific products, but our ability to meet the speed of the market has been sometimes hampered by internal technologies and complexity.”

While Sensis was innovating its product offering, the company was hampered by its roots as a 120-year old print company. There was no differentiated market strategy or positioning between digital and print and the Sales team, used to promoting print directories, simply didn’t have the tools to sell a new range of digital products.

The key learning is not that Sensis failed to innovate, but that this innovation was not reflected in the wider business. As a company, Sensis failed to understand why its customers would want of a digital offering.

“[We need to] move through the market a lot faster than we have to date. This is a ‘must win’ for the Sensis business.”

The a link between organisational agility and innovation

In an attempt to remain competitive, many companies are looking at ways to create and deliver customer value faster.  This has seen an uplift in the implementation of Agile planning methodologies.  But for most, this has started – and remained – in software development teams.

Yet remember Sensis didn’t fail to innovate. Its management failed to recalibrate the wider business around the shift towards the internet as a powerful tool for marketing.

While Sensis was protecting its revenue from traditional services like classified ads and business listings, Google was introducing a world where online advertising was easy, quick and cheap to access.  It offered businesses total control over how their marketing budget could be spent.

Companies that recognise customer demand for innovation will come in the form of a desire to do things differently, rather than simply the expectation of a better or newer product will be best placed to win.

So what is agile?

Agile principles have been used to develop software for many years.  With an emphasis on collaborative cross-functional teams that iteratively deliver ‘products’ and product improvement, agile differs from traditional project management where the team develops a rigid plan to deliver ‘projects’ .

With speed to market and the ability to respond quickly to disruption becoming critical competitive factors; there are opportunities to extend an Agile culture across the entire business, from marketing to sales to business intelligence reporting.

Agile in a silo is still a silo…

Problems arise when only one area of your organisation is innovative and agile.  For example, development teams can’t fully be Agile if supporting functions are still operating in a slow, traditional way. 

Seasonal reporting, inventory forecasts based on the previous year’s sales, marketing plans set a year in advance that don’t provide the flexibility to respond to a new competitor, product launch or a shift in customer usage or expectation.

The benefits of Agile for development teams are well understood; better decision-making, improved productivity and greater staff engagement. And it’s exciting to note that these benefits also appear when Agile frameworks are introduced into areas that support the wider business.

Examples of those who have integrated Agile across the business successfully this are numerous: consider Dyson, Spotify, Uber. But these disruptive businesses were built from the ground up as Agile. What about an existing business, with processes and people that are required to support BAU activity?

There is now a growing body of evidence that an appropriate agile methodology can work for any business, or any team.

Does agile work outside of software?

The actuarial reporting team of a major Australian insurance company recently adopted agile into their ways of working. Responsible for a vast and detailed amount of sales, claims and performance, their work is a world away from software development.

Creating an agile working environment resulted in a significant increase in team productivity and a focus on pairing and cross-skilling led to dramatic increases in individual team members capabilities.

With business priorities understood and agreed upfront, ad-hoc requests and distractions have reduced.  This has enabled the team to focus on the most critical areas of delivery, which in turn has resulted in positive knock on effects for other teams across the company.

Is it possible for an existing business, particularly one already operating at scale, to introduce a new company-wide way of working that allows for systemic innovation?

Consider a centuries-old bank – Barclays; long standing, conservative, and certainly not software driven. 

“Barclays is over 325 years old with a long history of innovation. The agile transformation at Barclays is… not just a technology thing. It’s taking the islands of agile and joining them up, removing the impedance mismatch. It’s everyone involved in the value stream, from concept to cash. It’s focused on delighting customers first and foremost (from which shareholder value will follow).” Jonathan Smart, Agility Capability Lead.

Agile to organisational agility

Large organisations are complex and there are no simple solutions but there are some key characteristics to consider.

Ensure you’ve got experienced people on the team.  Organisational change is hard and agile is still relatively new, so important that you can collaborate with people who have a deep understanding of the frameworks and the experience to be pragmatic in their approach.

Create an organisational structure that supports agile ways of working.  It’s hard for businesses to be Agile if decision-making is centralized or hierarchical.  Turn the organisation on its side and design cross functional teams that are focused on the customer eg technology, finance, marketing, sales, human resources, legal and customer service.

Embed a culture of test and learn.  This includes the courage to federate decision making and redefining ‘failure’.  Ensure you’ve got the right metrics in place and celebrate learning.