Agile Transformation and Its Challenges

Jeff Sutherland, the co-creator of Scrum, has stated that 47% of Agile transformations fail, and 67% of these failures are terminal.

That’s a mind-boggling number; considering that more than half of all organizations are now using Agile to drive their transformations.

What causes an enterprise-wide transformation to fail? Why is it so difficult to replicate something that has worked well at the team level to the whole enterprise?

Change and transformations drive success. As the old adage goes “The only thing constant is change”— and just like people change, organizations and cultures must change too. This became very apparent during the COVID-19 pandemic, when the entire paradigm of work underwent a sea change.

To stay relevant under these chaotic circumstances, organizations have to work fast and deliver more. And this can be done only by overhauling the old legacy systems and bringing in processes that allow:

• increased efficiency,
• shorter time-to-market,
• improved quality,
• happier customers,
• faster ROI, and
• satisfied employees.

Agile transformations, when done right, can help bring in all these benefits. Business agility weaves in responsiveness and adaptability into the very core of an organization, and its trickle effect is seen at every level of the business.

But, as the statistics show, more often than not, organizations set out on an ambitious full-scale transformation only to realise mid-way that it is not working out.

Reasons for a large-scale agile transformation failure

There are several reasons for a large-scale agile transformation failure:

• Lack of leadership support
• Lack of commitment at every level of the organization
• Incorrect application of popular agile methodologies
• A lack of understanding of which methodology will suit your organization
• Rushing the transformation process.

The key to undergoing an Agile transformation is to first understand the agility business model, which comprises of 4 domains. These 4 domains define how and what to change, so that agility can be adopted.

The 4 domains

1. Business domain: 
   Encompasses how an organization works, what it prioritizes, how it budgets, products it focuses on and more.
2. Organizational domain:
   Relates to how the organization is structured. Too many departments and too many teams can make agile transformation a nightmare if done incorrectly.
3. Cultural domain:
   Every organization has a culture, a mind-set which may or may not be difficult to change. But helping the organization and the staff make this mind-set change is the most crucial step towards bringing in a transformation. Whether autonomy is allowed in teams or if there is a strict top-down approach; these are aspects that need to be carefully examined.
4. Technical domain:
   This relates to the technical expertise of individual teams, their work ethics and their degree of self-independence. Self-organized teams work better, and are more responsive and successful.

Challenges of an Agile transformation

• Your organizational culture blocks change: A company’s core culture impacts not just how it does business but also how it treats its employees. Better engagement, more appreciation, transparent communication, empowering employees and teams, open processes are all hallmarks of an agile culture.
  An organization that is rigid, has tightly controlled processes, does not value human resources and has not yet fully embraced the idea of change is a sitting duck for transformation failure.
• Transformation at scale: It’s okay to start small, maybe at the team level or a department level, but change has to be brought about in the entire organization. Just having one or two teams that are agile is not going to help you in your transformation.
  Agile practices have to adopted by the entire organization to ensure business agility. The impact of the agile methodology will be restricted if it’s not taken beyond the trial stage.
• Leaders are not convinced: For any change or transformation to be successful, the leaders must be convinced of the change. A transformation across the organization is impossible without the support of the management.
  Agile leaders lead the transformation from the front, bring in the necessary investments, aid in creating a culture that fosters innovation and create a platform for open communication among all employees.
• Rushing the transformation: Rome was not built in a day! An organization that rushes its transformation process does so without proper planning, knowledge of processes or the support it requires to carry out this gargantuan task.
  A successful transformation takes several years and focuses on everything from culture change to process change to mind-set change. A rushed effort will reveal gaping holes in the transformation foundation and will surely lead to the effort coming tumbling down.
• Not helping employees’ transition: Your workforce is your company! A successful transition means helping the workforce understand:
  • the agile process
  • the skills that would be required in the new process
  • how they will be supported in new roles
  • how their career paths may change due to agile transition

The workforce must be open-minded about going agile and the management must be transparent with the employees about the whole process. A lack of clarity can cause employee attrition and loss of skill.

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What to do for a successful transformation?

1. Get leadership buy-in: Successful agile leaders support culture change. According to Scrum.org, Agile leaders focus on 3 things:
 (1) they create and nurture a culture in which experimentation and learning are embraced;  
(2) they collaborate with employees (at all levels in the organization) to find common values to create a greater goal for the company and the teams; and
(3) they create an organizational structure that reinforces and rewards the other two dimensions.

2. Strategize: There has to be a strategy on how, what and why to implement. Large, complex organizations cannot go agile overnight. They have to create an agile roadmap, bring together people, processes and technologies and implement agile at the right places to test its efficacy before scaling. 

3. Hand-hold employees of all levels: So how do you keep your employees informed and empowered through the transformation? Since agile means a change in processes it also requires a change in the way people are managed.

Employees need to be guided through the transformation through agile trainings, presentations and learnings. The concepts should be reiterated to allow teams to understand them and feel confident in working in a new environment.

Agile trainings and coaching, especially, are a great tool towards getting employees to adapt to the Agile mind-set.

4. Understand that agile is mostly about an organizational culture transformation: A successful agile transformation requires an agile-friendly culture. Large organizations who have followed the traditional approach may find it difficult to accept new ways of working. But it is not impossible. A culture change can happen only if everyone is on board.

Along with leadership alignment, there also has to be a culture shift at the organizational level. So, in essence it is as important to have a bottom-approach as it is to have a top-down approach, to bring this shift, and this can be done by being transparent and truly communicative about the changes that leaders are planning to make.

You have a culture ready for agile if you:

• Listen to your customer
• Make real-time decisions instead of relying on reports
• Take risks and learn from failures
• Rely on cross-functional and self-organized teams
• Have transparent and approachable leadership
• Have top-down, bottom-up and cross-communication across the organization

To conclude

For a successful Agile transformation, organizations must learn from their mistakes and be open to change.

Organizations will face unprecedented challenges on their way to an agile transformation. The key is to learn from mistakes and accept change with open arms. Transitioning to agile also requires an experienced agile partner who can guide employees and the organization with coaching, training and working with leaders to bring about change.