Product Development & Management

Scaling Up Agile Teams: How Enterprise Companies Can Remain Competitive in a Startup Market

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One of the biggest challenges for companies at the enterprise level is remaining competitive in a climate full of innovative entrepreneurs and nimble startups. A company that has been around for decades, and has entrenched hierarchies and bureaucracies, risks falling behind up-and-comers who have the flexibility and culture to remain nimble.

But size doesn’t have to be an impediment to implementing Agile teams. Even global behemoths can use Agile principles to remain on a path of growth while still responding to customer needs like a startup.

In an article for Harvard Business Review, authors Darrell K. Rigby, Jeff Sutherland, and Andy Noble look at several different companies that have implemented Agile methods successfully and review what worked, what didn’t, and how companies can launch Agile teams that work — and position themselves for a more competitive market going forward.

Challenges and Benefits

Scaling up Agile offers enticing benefits to leaders who face a constant barrage of challenges from energetic, nimble startups. What leader wouldn’t want a more responsive, adaptive organization?

But turning Agile teams into a reality can be tough for companies with clearly established hierarchies and slow-moving bureaucracies. It’s one thing to know that organizing multidisciplinary Agile teams would be beneficial; it’s another thing entirely to clarify which functions are suited for Agile principles and how many Agile teams to launch.

Not All Functions Have to Be Agile

Leaders looking to scale up Agile need to recognize that not all functions have to be organized into Agile teams. Agile teams are best suited to functions related to innovation — and indeed, the methods first caught on in IT departments. Operations such as purchasing and accounting may not be the best place for Agile teams.

However, the authors of the Harvard Business Review article point out that once Agile teams are launched in some functions, they will, by necessity, interact with other parts of the business. These fledgling Agile teams risk creating friction with departments still operating under traditional top-down hierarchies and existing bureaucracies. In order to keep both parts of the business functioning and positioned for success, leadership itself needs to understand and adopt Agile approaches.

Bosch, the German multinational engineering and technology company and an early adopter of Agile methods, attempted to implement a “dual organization” — that is, the company deployed Agile teams across the newest, “hottest” initiatives while keeping traditional functions operating as usual. But this implementation didn’t have the transformative effect the company hoped for, so it tried again in 2015. This time, members of the management board were divided into Agile teams, and the project evolved from an annual project to a continuous process. Now, Bosch has a mix of Agile teams and traditionally structured units, but nearly all areas have adopted Agile values and are more collaborative and adaptive.

Read this blog to learn more about Agile software development practices for regulated industries

A Blueprint For Implementing Agile Methods

Implementing Agile methods across the organization requires a different perspective and outlook from the traditional top-down, project-focused approach used by leadership in the past. In fact, the very nature of those old systems runs counter to Agile principles.

The authors highlight several keys to successful Agile implementations:

  • Scaled, gradual launches: With rare exception, the companies that succeed with implementing Agile teams do so by proceeding gradually. They may start with an initial launch of teams best suited to the methods, evaluate the success of those teams, and then role out new teams across functions that make sense.
  • A taxonomy of teams: “Taxonomy” is just a way of classifying teams and functions. This system follows Agile’s modular approach by classifying different components of the business and then integrating them. For instance, a company could identify three functions — customer experience teams, business process teams, and technology systems teams. It would then create a cross-functional team from these functions — one designed to solve one specific problem.
  • A transition sequence: Leaders should identify those initiatives that offer the greatest value and the most learning and then position them for launch by making sure the team is ready to begin. The authors offer a checklist of attributes of a team that’s ready to begin, including focus on a high stakes major business opportunity, commitment to Agile values, principles, and practices, and support from senior executives.
  • Strong buy-in from top leadership: Whether the company completely reorganizes to start over with Agile teams or begins by implementing Agile in a few functions and letting it spread organically, none of the implementations would succeed without full support from top leadership. Leadership should be committed to addressing impediments and driving the adoption of the team’s work.

To learn more about common problems with Agile and how to solve them, check out our webinar, “How to Avoid Common Pitfalls of Agile for Embedded Systems.”

No Limits

In practice, there is no limit to how many Agile teams a company can implement across the organization. Agile teams can even work in “teams of teams,” where each smaller team is responsible for one small initiative that feeds into a larger initiative. And as Agile teams gain traction in the company, more traditional functions can adopt Agile methods and implement teams as well. Agile methods have been implemented in sales, marketing, and even HR functions.

Scaling up Agile is at once intimidating and enticing, but those companies that implement Agile teams successfully see major improvements to their businesses. Not only do they respond and adapt more quickly to market changes and competition, but they often see better financial results, greater customer loyalty, and higher employee engagement. For those enterprise level companies struggling to keep up with a rapidly changing market, scaling up Agile offers a way to stay competitive now — and far into the future.

Download our whitepaper, Agile for the Enterprise, to learn more about successfully implementing Agile in regulated and governed industries.

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