agile business transformation case study

ING’s agile transformation

Established businesses around the world and across a range of sectors are striving to emulate the speed, dynamism, and customer centricity of digital players. In the summer of 2015, the Dutch banking group ING embarked on such a journey, shifting its traditional organization to an “agile” model inspired by companies such as Google, Netflix, and Spotify. Comprising about 350 nine-person “squads” in 13 so-called tribes, the new approach at ING has already improved time to market, boosted employee engagement, and increased productivity. In this interview with McKinsey’s Deepak Mahadevan, ING Netherlands chief information officer Peter Jacobs and Bart Schlatmann, who, until recently, was the chief operating officer of ING Netherlands, explain why the bank needed to change, how it manages without the old reporting lines, and how it measures the impact of its efforts.

The Quarterly : What prompted ING to introduce this new way of working?

Bart Schlatmann biography

Born October 18, 1969, in Bloemendaal, Netherlands

Holds a master’s degree in economic science from Erasmus University Rotterdam

(1995–2017)

ING Netherlands

Chief operating officer

Board member of Bruna, Dutch Payments Association, and WestlandUtrecht Bank

Member of the supervisory board of Interhyp Germany

Bart Schlatmann: We have been on a transformation journey for around ten years now, but there can be no let up. Transformation is not just moving an organization from A to B, because once you hit B, you need to move to C, and when you arrive at C, you probably have to start thinking about D.

In our case, when we introduced an agile way of working in June 2015, there was no particular financial imperative, since the company was performing well, and interest rates were still at a decent level. Customer behavior, however, was rapidly changing in response to new digital distribution channels, and customer expectations were being shaped by digital leaders in other industries, not just banking. We needed to stop thinking traditionally about product marketing and start understanding customer journeys in this new omnichannel environment . It’s imperative for us to provide a seamless and consistently high-quality service so that customers can start their journey through one channel and continue it through another—for example, going to a branch in person for investment advice and then calling or going online to make an actual investment. An agile way of working was the necessary means to deliver that strategy.

The Quarterly : How do you define agility?

Bart Schlatmann: Agility is about flexibility and the ability of an organization to rapidly adapt and steer itself in a new direction. It’s about minimizing handovers and bureaucracy, and empowering people. The aim is to build stronger, more rounded professionals out of all our people. Being agile is not just about changing the IT department or any other function on its own. The key has been adhering to the “end-to-end principle” and working in multidisciplinary teams, or squads, that comprise a mix of marketing specialists, product and commercial specialists, user-experience designers, data analysts, and IT engineers—all focused on solving the client’s needs and united by a common definition of success. This model [see exhibit] was inspired by what we saw at various technology companies, which we then adapted to our own business.

The Quarterly : What were the most important elements of the transformation?

Peter Jacobs biography

Born May 8, 1975, in Heerlen, Netherlands

Holds a PhD in systems engineering from Delft University of Technology

(2013–present)

Chief information officer

Director application management

McKinsey & Company

Associate partner and consultant

(2015–present)

Member of the supervisory board of Equens, a European payment processor

(2015, 2014)

Appeared in the Goudhaantjes top 100, a list of Dutch management talent under 45

Peter Jacobs: Looking back, I think there were four big pillars. Number one was the agile way of working itself. Today, our IT and commercial colleagues sit together in the same buildings, divided into squads, constantly testing what they might offer our customers, in an environment where there are no managers controlling the handovers and slowing down collaboration.

Number two is having the appropriate organizational structure and clarity around the new roles and governance. As long as you continue to have different departments, steering committees, project managers, and project directors, you will continue to have silos—and that hinders agility.

The third big component is our approach to DevOps 1 1. The integration of product development with IT operations. and continuous delivery in IT. Our aspiration is to go live with new software releases on a much more frequent basis—every two weeks rather than having five to six “big launches” a year as we did in the past. The integration of product development and IT operations has enabled us to develop innovative new product features and position ourselves as the number-one mobile bank in the Netherlands.

Finally, there is our new people model. In the old organization, a manager’s status and salary were based on the size of the projects he or she was responsible for and on the number of employees on his or her team. In an agile performance-management model , there are no projects as such; what matters is how people deal with knowledge. A big part of the transformation has been about ensuring there is a good mix between different layers of knowledge and expertise.

The Quarterly : What was the scope of this transformation? Where did you start, and how long did it take?

Bart Schlatmann: Our initial focus was on the 3,500 staff members at group headquarters. We started with these teams—comprising previous departments such as marketing, product management, channel management, and IT development—because we believed we had to start at the core and that this would set a good example for the rest of the organization.

We originally left out the support functions—such as HR, finance, and risk—the branches, the call centers, operations, and IT infrastructure when shifting to tribes and squads. But it doesn’t mean they are not agile; they adopt agility in a different way. For example, we introduced self-steering teams in operations and call centers based on what we saw working at the shoe-retailer Zappos. These teams take more responsibility than they used to and have less oversight from management than previously. Meanwhile, we have been encouraging the sales force and branch network to embrace agility through daily team stand-ups and other tactics. Functions such as legal, finance, and operational risk are not part of a squad per se, as they need to be independent, but a squad can call on them to help out and give objective advice.

It took about eight or nine months from the moment we had written the strategy and vision, in late 2014, to the point where the new organization and way of working had been implemented across the entire headquarters. It started with painting the vision and getting inspiration from different tech leaders. We spent two months and five board off-sites developing the target organization with its new “nervous system.” In parallel, we set up five or six pilot squads and used the lessons to adapt the setup, working environment, and overall design. After that, we were able to concentrate on implementation—selecting and getting the right people on board and revamping the offices, for example.

The Quarterly : Was agility within IT a prerequisite for broader organizational change?

Peter Jacobs: Agility within IT is not a prerequisite for a broader transformation, but it certainly helps. At ING, we introduced a more agile way of working within IT a few years ago, but it was not organization-wide agility as we understand it today, because it did not involve the business. You can certainly start in IT and gradually move to the business side, the advantage of this being that the IT teams can test and develop the concept before the company rolls it out more widely. But I think you could equally start with one value stream, let’s say mortgages, and roll it out simultaneously in the business and in IT. Either model can work.

What you can’t do—and that is what I see many people do in other companies—is start to cherry pick from the different building blocks. For example, some people formally embrace the agile way of working but do not let go of their existing organizational structure and governance. That defeats the whole purpose and only creates more frustration.

The Quarterly : How important was it to try to change the ING culture as part of this transformation?

Bart Schlatmann: Culture is perhaps the most important element of this sort of change effort. It is not something, though, that can be addressed in a program on its own. We have spent an enormous amount of energy and leadership time trying to role model the sort of behavior—ownership, empowerment, customer centricity—that is appropriate in an agile culture. Culture needs to be reflected and rooted in anything and everything that we undertake as an organization and as individuals.

For instance, one important initiative has been a new three-week onboarding program, also inspired by Zappos, that involves every employee spending at least one full week at the new Customer Loyalty Team operations call center taking customer calls. As they move around the key areas of the bank, new employees quickly establish their own informal networks and gain a deeper understanding of the business.

We have also adopted the peer-to-peer hiring approach used by Google. For example, my colleagues on the board selected the 14 people who report to me. All I have is a right of veto if they choose someone I really can’t cope with. After thousands of hires made by teams using this approach at every level in the organization, I have never heard of a single veto being exercised—a sure sign that the system is working well. It’s interesting to note, too, that teams are now better diversified by gender, character, and skill set than they were previously. We definitely have a more balanced organization.

A lot is also down to the new way we communicate and to the new office configuration: we invested in tearing down walls in buildings to create more open spaces and to allow more informal interaction between employees. We have a very small number of formal meetings; most are informal. The whole atmosphere of the organization is much more that of a tech campus than an old-style traditional bank where people were locked away behind closed doors.

The Quarterly : Was a traditional IT culture an impediment to the transformation?

Peter Jacobs: In IT, one of the big changes was to bring back an engineering culture, so there’s now the sense that it’s good to be an engineer and to make code. Somehow over the years, success in IT had become a question of being a good manager and orchestrating others to write code. When we visited a Google IO conference in California, we were utterly amazed by what we saw and heard: young people talking animatedly about technology and excitedly discussing the possibilities of Android, Google Maps, and the like. They were proud of their engineering skills and achievements. We asked ourselves, “Why don’t we have this kind of engineering culture at ING? Why is it that large enterprises in Holland and Western Europe typically just coordinate IT rather than being truly inspired by it?” We consciously encouraged people to go back to writing code—I did it myself—and have made it clear that engineering skills and IT craftsmanship are what drive a successful career at ING.

The Quarterly : Can you say more about the companies that inspired you?

Peter Jacobs: We came to the realization that, ultimately, we are a technology company operating in the financial-services business. So we asked ourselves where we could learn about being a best-in-class technology company. The answer was not other banks, but real tech firms.

If you ask talented young people to name their dream company from an employment perspective, they’ll almost always cite the likes of Facebook, Google, Netflix, Spotify, and Uber. The interesting thing is that none of these companies operate in the same industry or share a common purpose. One is a media company, another is search-engine based, and another one is in the transport business. What they all have in common is a particular way of working and a distinctive people culture. They work in small teams that are united in a common purpose, follow an agile “manifesto,” interact closely with customers, and are constantly able to reshape what they are working on.

Spotify, for example, was an inspiration on how to get people to collaborate and work across silos—silos still being a huge obstacle in most traditional companies. We went to visit them in Sweden a few times so as to better understand their model, and what started as a one-way exchange has now become a two-way exchange. They now come to us to discuss their growth challenges and, with it, topics like recruitment and remuneration.

The Quarterly : Without traditional reporting lines, what’s the glue that holds the organization together?

Bart Schlatmann: Our new way of working starts with the squad. One of the first things each squad has to do is write down the purpose of what it is working on. The second thing is to agree on a way of measuring the impact it has on clients. It also decides on how to manage its daily activities.

Squads are part of tribes, which have additional mechanisms such as scrums, portfolio wall planning, and daily stand-ups to ensure that product owners are aligned and that there is a real sense of belonging. Another important feature is the QBR [quarterly business review], an idea we borrowed from Google and Netflix. During this exercise, each tribe writes down what it achieved over the last quarter and its biggest learning, celebrating both successes and failures and articulating what it aims to achieve over the next quarter—and, in that context, which other tribe or squad it will need to link up with. The QBR documents are available openly for all tribes: we stimulate them to offer input and feedback, and this is shared transparently across the bank. So far, we have done four QBRs and, while we are improving, we still have to make them work better.

In the beginning, I think the regulators were at times worried that agile meant freedom and chaos; that’s absolutely not the case. Everything we do is managed on a daily basis and transparent on walls around our offices.

The Quarterly : Can traditional companies with legacy IT systems really embrace the sort of agile transformation ING has been through?

Peter Jacobs: I believe that any way of working is independent of what technology you apply. I see no reason why an agile way of working would be affected by the age of your technology or the size of your organization. Google and ING show that this has nothing to do with size, or even the state of your technology. Leadership and determination are the keys to making it happen.

The Quarterly : Are some people better suited to agile operating approaches than others?

Bart Schlatmann: Selecting the right people is crucial. I still remember January of 2015 when we announced that all employees at headquarters were put on “mobility,” effectively meaning they were without a job. We requested everyone to reapply for a position in the new organization. This selection process was intense, with a higher weighting for culture and mind-sets than knowledge or experience. We chose each of the 2,500 employees in our organization as it is today—and nearly 40 percent are in a different position to the job they were in previously. Of course, we lost a lot of people who had good knowledge but lacked the right mind-set; but knowledge can be easily regained if people have the intrinsic capability.

Peter Jacobs: We noticed that age was not such an important differentiator. In fact, many whom you may have expected to be the “old guards” adapted even more quickly and more readily than the younger generation. It’s important to keep an open mind.

The Quarterly : How would you quantify the impact of what has been done in the past 15 months?

Bart Schlatmann: Our objectives were to be quicker to market, increase employee engagement, reduce impediments and handovers, and, most important, improve client experience. We are progressing well on each of these. In addition, we are doing software releases on a two- to three-week basis rather than five to six times a year, and our customer-satisfaction and employee-engagement scores are up multiple points. We are also working with INSEAD, the international business school, to measure some of these metrics as a neutral outsider.

The Quarterly : Do you see any risks in this agile model?

Peter Jacobs: I see two main risks. First, agility in our case has been extremely focused on getting software to production and on making sure that people respond to the new version of what they get. If you are not careful, all innovations end up being incremental. You therefore have to organize yourself for a more disruptive type of innovation—and you can’t always expect it to come out of an individual team.

Second, our agile way of working gives product owners a lot of autonomy to collect feedback from end users and improve the product with each new release. There is a risk that people will go in different directions if you don’t align squads, say, every quarter or six months. You have to organize in such a way that teams are aligned and mindful of the company’s strategic priorities.

The Quarterly : What advice would you give leaders of other companies contemplating a similar approach?

Bart Schlatmann: Any organization can become agile, but agility is not a purpose in itself; it’s the means to a broader purpose . The first question you have to ask yourself is, “Why agile? What’s the broader purpose?” Make sure there is a clear and compelling reason that everyone recognizes, because you have to go all in—backed up by the entire leadership team—to make such a transformation a success. The second question is, “What are you willing to give up?” It requires sacrifices and a willingness to give up fundamental parts of your current way of working—starting with the leaders. We gave up traditional hierarchy, formal meetings, overengineering, detailed planning, and excessive “input steering” in exchange for empowered teams, informal networks, and “output steering.” You need to look beyond your own industry and allow yourself to make mistakes and learn. The prize will be an organization ready to face any challenge.

Peter Jacobs is the chief information officer of ING Netherlands; Bart Schlatmann , who left ING in January 2017 after 22 years with the group, is the former chief operating officer of ING Netherlands. This interview was conducted in October 2016 by Deepak Mahadevan, a partner in McKinsey’s Brussels office .

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Guide To Agile Transformation: Plans, Challenges And Case Studies

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  Table of Contents

What Is Agile?

Why is agile transformation worth it, why not agile, the agile transformation plan.

• A Template For An Agile Roadmap?
• Agile philosophy is built on four principles/themes: people over process, product over process, customer input and embracing constant changeThe reason why many tech and non-tech companies go for transform to agile, is that it helps to build better products and better culture
• There is an argument that agile does not suit every situation. However, it is always useful to think whether philosophy still applies, though not all tools of agile.
• We have looked at how agile was introduced and developed in three contexts: digital businesses, large companies needing to drive tech innovation and a consumer goods company driving change through an agency relationship
• The key to a successful agile transformation is to test that all elements of the influence model are addressed: role modelling by executive team, compelling story of why do it, supporting staff through training and structural changes to process and incentives

Now when you hear agile, you think of the way of working more generally, though the origins of agile go to redefining a software development process. In 2001, seventeen leading US developers got together and verbalised for the first time what Agile meant in the Agile Manifesto .

An easy way to get your head around Agile is to start with its four values.    

• Individuals and interactions over processes and tools : this is not to be confused with no process at all. While there is definitely an agile process, it is very fluid and is driven by individuals who form the team delivering a product.
• Working software over documentation : getting to the working product first at the expense of documenting and explaining how you got there, or getting everyone on board with how the best way to get there. The idea of MVP (minimal viable product) or prototype is a similar concept in the product world: get a working version to a customer as soon as possible to learn and refine.
• Customer collaboration over contract : the concept of putting the customer first is not new. It has existed in marketing and traditional product development for decades. Agile, however, was the first theory to explicitly put the customer in the middle of the software development process. A combination of these two values - working product and continuous customer input means that a much better version of a product is created via multiple iterations.
• Responding to change over following a plan : in agile where you start with your product idea is not where you will finish. Given that customer feedback and continuous learning guides the process, the outcome is bound to change. The change is not only internal or customer driven. Sometimes market situations change or projects have more or less time or money available.

In the tech world of Silicon Valley, agile has graduated to dual track development process. It guides both software development and product development. In dual track an effective digital product team has two processes running alongside:  

• Discovery : finding the best way to solve a customer problem through constant MVP validation
• Delivery: building and iterating on the validated MVP

The main goal of discovery is to validate as many feasible ideas as possible before they get to delivery. Delivery is a very expensive resource: good software development teams are expensive and good products do take time to build. Dual track embraces the four values of agile. It also helps to clarify roles between product leaders and engineers while maintaining co-creation and collaboration. Four values are one component of agile philosophy. Another big part of agile is its process and tools. Agile tools, such as Kanban boards, stand up meetings, retrospectives, are well documented and explained elsewhere. We will focus on why and when to go for agile, and go through a few cases  

  The best argument for using Agile is that it has a fairly proven track record. The largest global agile survey reports that 98% of companies said that their organisation has realised success from agile development practice. It is also no wonder that the largest and fastest growing companies in the world - Google, Apple, Uber, AirBnB - epitomise agile values at scale.  

While agile was born in tech, non-tech companies are widely embracing these concepts and seeing measurable results as well. For instance, NPR used Agile to reduce programming costs by up to 66% . REI is using agile principles in its marketing to drive higher ROI on their marketing spend. The value of using Agile can be narrowed down to two things: better product and a better culture. Adobe had an interesting experiment in 2012 of splitting its 26 teams into agile/ scrum and non-agile driven. They measured results by asking teams how they felt in relation to building better products and culture. They found significant improvements for agile teams.

Case study: Adobe moving to Scrum

While the value of agile is widely accepted, there are still arguments that agile should in some cases be considered with caution. HBR and Bain have defined five conditions where agile is not going to be set up for success. Personally, I struggle to find many examples of valid situations where at least the four values of agile do not hold true. Are challenges that require no innovation, no customer input and are not worth the learning gained from mistakes really worth overcoming? However, there may be cases where elements ofthe agile process and its tools may not be the most effective way of managing the process. For instance, large projects with hundreds of people involved in them may need a bit more than just a scrum board to communicate the team's progress towards the goal for stakeholders funding the process.  

  To understand the recipe for a successful agile transformation and implementation, we will look into three different contexts:  

• Agile values or process have been put in place early on: it is very often the case with digital business. We will look into Redbubble & Seek for insight
• Agile had to be introduced as a disruption to more traditional project management and culture. Both Telstra, and AusPost had to do it, though used quite different ways of getting there
• Agile was introduced through agent relationship and adopted gradually, in the example of Cadbury in Australia

We also need to note that the concept of agile is used loosely here to expand from purely a software development process to agile transformation strategy and product development, and leading innovation more generally.  

1. Early adopters - Seek and Redbubble

It is always much easier if some of the agile values have been a part of the company philosophy to begin with. Seek, one of the leading jobs marketplace in the world, has always been a customer centric company. Therefore, agile philosophy was easy to adopt. In the early days of the company’s life, not all practices were agile. Kanbans, daily stand ups and retros really became an everyday life for Seek in the last 5-7 years. Redbubble, the world's largest marketplace of independent art printed on demand, was also started with agile values at its heart. Martin Hoskin, the founder, by that time, had already started two successful digital businesses. The other co-founders were also living and breathing human centric design and lean start-up values. As the company grew these values translated into more formalised and universally accepted agile processes. Now every tech team and most of the non-tech teams in Redbubble run Trello boards, do daily stand-ups and bi-weekly retrospectives. A few practices make both of these companies successful in running agile driven businesses.  

Agile Values Are Company Values

For both Seek and Redbubble, customer first mentality is reflected in their values. Seek simply expresses it as Customer comes first. For Redbubble, the notion of a customer is slightly more complex. All three of its agents - artists, consumers and suppliers can be interpreted as customers. Redbubbles expresses the customer first mentality as only doing things that benefit the marketplace ecosystem - so all customers of the marketplaces are gaining value. Another agile value - individuals over processes - is also explicitly expressed in both companies. One of the three Seek principles guiding performance reviews is collaboration and quality of solving the problem, not just getting to a solution in an individual fashion. Lastly, both companies embrace change and making mistakes mentality. Andrew Bassett, Seek’s founder, lamented the gutlessness of modern CEOs: “It seems if CEOs make a mistake now, for the most part, they lose their job. It seems to be easier for them just to do nothing,"  

Rolemodeling by Leadership

It is not enough to put agile values on a piece of paper and hope that people in the company will adopt them at some point. One of the most effective ways of encouraging and embedding agile values is for the top leaders in the company to be living and breathing these. For instance, Redbubble COO Barry Newstead would often be seen wearing variations of different shirts with “Always make mistakes”. Michael Ilczynski, Head of ANZ for Seek, is almost guaranteed to ask a question of “What customer problem are we solving here?”, if the proposed project does not clearly articulate it.  

Best Practice Sharing & Coaching

One last thing to note is that both companies invest in spreading the learnings of how to use agile tools best. Seek does it in a more formal way by making sure that every team goes through Agile induction. Seek also has an agile coach that helps teams to set up those practices and facilitates best practice sharing. Redbubble has a more organic way of sharing what works best. Teams often invite ‘outsider’ team leaders to run their retrospectives. This helps team members see a new way of running the process but also get insight into how to solve specific challenges differently.  

2. Self-disrupting giants - Telstra and AusPost

  Not everyone has been set up with an agile philosophy at its core. In fact, the majority of Australian large companies acknowledge that their cultures have been formed by a very different set of values. However, the strategic importance of agile to innovation and market leadership makes the case for change. Telstra, one of the top 10 most valuable companies in Australia by market cap, has been on the journey to innovation for a while. Its ex-CEO David Thodey has been an active role model of the value of customer centricity and taking risks. In the last 5 years, Telstra has actively experimented with running its product innovation through a number of options - venture fund, JVs, incubators or self-disrupting start-ups. AusPost is one of the oldest companies in Australia, an employer of over 40,000 people and is owned by the government. You could not imagine a more challenging context for agile transformation. However, under the leadership of its ex-CEO Ahmed Fahour and the team he hired, AusPost has made an impressive leap and is currently leading a number of cutting edge innovations, including a competitor product to Amazon Prime. Not dissimilar to Telstra, AusPost is doing that structurally by introducing customer innovation focused business units. Telstra and AusPost set up their innovation units in quite different ways. Telstra has had more success with a start-up/venture funded model with a range of forms:  

• Telstra Ventures was set up in 2011 and since then invested in 40 tech companies, a lot of which became closely integrated into Telstra. Telstra Ventrues is also a top 20 global corporate VC fund.
• Telstra JVs with other companies to create disruption. Proquo, a JV with NAB, is a marketplace for small businesses to trade services with each other.
• They have set up an accelerator programme - Muru-D, to which all Telstra employees have frequent access to observe how small businesses innovate.
• Telstra more directly instils the agile practices by forming a JV with a software development company Pivotal to bring up Telstra to start-up speeds of product development.

AusPost has driven innovation and the move to agile philosophy in a more integrated way. They have set up a Digital Identity and Delivery Center in 2012 to explicitly drive agile and innovation. It has taken four years but early results are starting to show. Most of us are now able to experience daily updates on parcel delivery vs none at all in the past. Three key success factors stand out despite the difference in the form: support from executives, instilling a start-up environment and bringing in new leadership.  

Executive Support

The drive for agile and customer centric innovation comes from the very top. Both Telstra and Auspost CEOs have been personally behind each of the projects - whether it was Telstra Ventures or AusPost Digital Delivery Center. They have dedicated time, financial resources and focus of their leadership to have this topic as a priority on their top team agenda. In words of Amelia Crook, an experienced product leader with Seek, Martha Stewart, Redbubble and Flippa experiences behind her, “a successful agile transformation has to have executive support, it’s a whole business transformation, not just a delivery team. Trust becomes super important when old systems of reporting (which gave the illusion of certainty) are replaced with agile teams working around challenges rather than solutions”.

Run it as a Startup

All of the divisions have initiatives aiming to drive agile culture and innovation had to be established and run like start-ups. It is not enough to isolate them structurally. While they needed to have executive support to make them happen, they also needed to succeed or fail in their own right. In the case of AusPost, it was more a clear expectation that the Digital Delivery Center achieves measurable results - specifically speed of development. In the case of Telstra, the companies were literally shut down if they did not perform. Writing off a $330 million investment in a video platform Ooyala is just one of the examples.  

Bring New Leadership

Even though the change was led by the existing CEOs and executives, the actual team to run these initiatives was very often brought in externally. AusPost has been a hiring powerhouse for ex-strategy consultants, digital leaders and start-up founders for the last 3-4 years. Telstra often acqui-hired start-up talent like in the case of Pivotal. In the case of Telstra, the relationship was set up with this new breed of leaders to give them an opportunity to be successful. While like a start-up founder they were left to succeed or fail, they were also given considerable protection from corporate politics or bureaucracy.

3. Agent of change - Cadbury

  Sometimes the best introduction of agile is more gentle than setting up a new ‘agile’ division or JV. In the case of Cadbury in Australia, it was a relationship with its digital agencies that let its technology teams get a flavour of what agile practices were like and their benefits. Alick Hyde, currently heading Digital for Total Tools, a $350m franchise of tool stores across Australia, used to be a project lead for Cadbury. His first project with them was something not very core to the business - their fundraiser site. The agency team worked with Cadbury tech teams for 9 months. Icon Inc, the agency that Alick was part of, ran all of its client projects as agile and already had experience educating the clients on what to expect. At the end of the project, Cadbury has referred to the experience as extremely positive and rewarding.

“They loved the fact that we were able to change things around and adjust requirements that would benefit the end customer. They saw so much value in running things slightly differently”, Alick reflected.  

The Template For A Successful Agile Transformation

 Amazingly a lot of people still approach a move to agile in a ‘waterfall way’.  Agile transformation roadmap is the most searched term on google on agile transformation. Despite the idea of a fixed roadmap in its classic sense is anti-agile.  To get started on an agile transformation journey, it is important to understand what are the necessary elements to drive is. The influence model introduced by McKinsey in 2003 stands the test of time as a leading framework to manage any change. 

McKinsey Influence model:

• Role modelling - through all the case examples discussed in this article, CEO and executive support were key to driving agile transformations. Support behind the scenes is not enough. Leaders have to be seen living and breathing the values daily. Any inconsistency or contradiction undermines the credibility of the entire effort.
• Fostering understanding - telling a compelling story of why that makes sense to everyone is important. For companies like Redbubble and Seek, it was about embedding agile values into their company values from the get go. For, Telstra and AusPost it was about the urgency of the case for change and showing what good could look like through acquisitions, JVs or new people brought in. Understanding of why agile works can come from external sources in a less intrusive way like it did in case of Cadbury.
• Developing skills and talent - making sure that the teams are set up for success is key. The solution could be more organic and light touch like in Redbubble, where teams were encouraged to share what already worked. It can be more guided with agile workshops and coaches like in Seek. It can be immersive: Telstra's Muru-D incubator was set up to help those completely new to agile see the way it works for small businesses.
• Reinforcing formal mechanisms - helping to institutionalise and encourage desired behaviours through either formal structures or incentives:

Such structures can be quite explicit - new entities set up as in case of Telstra Ventures and AusPost’s Digital Delivery.

• Agile values can be ingrained in performance reviews - Seek’s collaborative value as one of the key three.
• The way the company runs its core processes can also be supportive of agile transformation - for Redbubble replacing a classic top-down annual planning process with more collaborative bottom-up vision & key results-driven planning.

Whether the company is living and breathing agile values or is just starting the journey, the principles are the same. It is about finding which of the four elements and in what form will be most effective.  

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In-Depth: The Evidence-Based Business Case For Agile

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What is the business case for Agile teams? Is it  really that  important that they are autonomous, able to release frequently, interact closely with stakeholders and spend all that time on continuous improvement? Or is all that just hype? Or maybe even counterproductive?

Yes, we believe all these things are important. And so does probably everyone else in our community. But what is the evidence we have for this? What proof do we have that we aren’t just selling a modern equivalent of snake oil? We think we do well to  base our beliefs about Agile more on evidence . This allows us to test our beliefs and also makes our case stronger in case they are supported.

This post is our attempt to bring an evidence-based perspective to the business case of Agile teams. We will share results from scientific studies that we located through  Google Scholar . And we share results from our own analyses based on actual data from stakeholders and Scrum teams that we collected through the  Scrum Team Survey .

This post is part of our  “in-depth” series . Each post discusses scientific research that is relevant to our work with Scrum and Agile teams. We hope to contribute to  more evidence-based conversations  in our community and a stronger reliance on robust research over personal opinions.

A working definition of Agile and Stakeholders

Before we begin, we need to define some of the terms we will use throughout this post. The first term is  Stakeholder . Throughout this post, we define them as “all users, customers, and other people or groups who have a clear stake in the outcomes of what this team produces, and invest money, time or both in making sure that happens”. So this excludes people who have an opinion about the product but don’t stand to lose  anything  when the team fails.

The second term I’d like to define is  Agile  or  agility . What do we actually mean when we talk about an “Agile team”? In its broadest sense, we mean that these teams practice the principles of the  Agile Manifesto . But this is still rather vague. We could say that these teams practice Agile methodologies, like Scrum or XP, and are therefore Agile. But adherence to a framework or prescribed process does  not  guarantee agility. In fact, we’ve written the  Zombie Scrum Survival Guide  specifically to shine a light onto all those teams who think they have checked all the boxes of the Scrum framework, and are still not moving.

“Adherence to a framework or prescribed process does  not  guarantee agility.”

I prefer a process-based definition of agility. This definition answers the question: “What kind of processes typically happen in Agile teams that distinguish them from non-Agile teams?”. We worked with Prof. Daniel Russo of the University of Aalborg to answer this question with data from almost 2.000 Scrum teams.  In a scientific study , we identified five  core processes  — or factors— that happen in and around Agile teams at varying levels of quality:

• Teams work to be as  responsive  as possible through automation, refinement, and a high(er) release frequency.
• Teams show concern for the  needs of their stakeholders  by collaborating with them closely and making sure that what is valuable to them is represented in their work and goals.
• Teams engage in  continuous improvement  to improve where they can through frequent reflection, shared learning, and creating a psychologically safe environment.
• Teams expand and use their  autonomy  to manage their work and bring their skills together in the most effective ways.
• In the immediate environment of Scrum teams,  management supports  what teams do and helps them where possible.

Although we used Scrum teams for our investigation, these processes are generic enough to apply to Agile teams in general. We collected the data through our  Scrum Team Survey . This tool uses  a validated and scale-based questionnaire  to allow teams to diagnose and improve their process in an evidence-based way. You can use the free version for individual teams.

For this post, we used a sample of 1.963 Scrum teams and 5.273 team members. The sample was cleaned of fake and careless responses and corrected for social desirability where relevant. Our sample includes teams from all sectors, sizes, and regions.

Finding #1: Teams Vary Widely In Their Actual Agility

In our sample of 1.963 Scrum teams, we observed a wide range of scores on the five core processes of agility. We calculated an overall agility score for teams and categorized them into three buckets — low, moderate, and high — for easier interpretation. The histogram below shows the differences visually:

There are two caveats to this histogram. First, the cutoffs for low, moderate, and high agility are fairly arbitrary. In reality, agility is obviously a continuum that teams traverse. Second, there is some circularity because we calculate the overall agility of a team as an aggregate of the five core processes. So it is not surprising that the scores improve as teams become more Agile.

However, the histogram illustrates nicely the  size  of this increase, which is both significant for all differences (p<.001)  and  highly substantial. It also illustrates well how all processes improve, and not just one or two. They seem to be connected. The results also affirm that calling yourself a Scrum team — as the teams in this sample mostly did — is no guarantee of actual agility. At the same time, we can clearly see that many Scrum teams  are  Agile.

“It is clear from these results that identifying yourself as an Agile or Scrum team is no guarantee of actual agility.”

So we know now have a better sense of the differences between the quality of the core processes at different “levels” of agility. However, the key question is whether this actually makes a difference in important business outcomes. Are more Agile teams indeed better at producing important business outcomes than less Agile teams?

“Are more Agile teams indeed better at producing important business outcomes than fewer Agile teams?”

Finding #2: Agile Teams Have More Satisfied Stakeholders

Ultimately, we believe that a strong business case lies with how effectively Agile teams can serve the needs of stakeholders, like users, customers, and other people with a clear stake. There is clearly a strong economic incentive for organizations to keep stakeholders happy, as they are the people who pay for, or use, their products.

But do Agile teams have more satisfied stakeholders than less Agile teams? Fortunately, the  Scrum Team Survey  allows teams to ask their stakeholders to evaluate their outcomes. We ask stakeholders to evaluate this on four dimensions: quality, responsiveness, release frequency, and team value. For this analysis, we use the evaluations of 857 stakeholders for 241 teams. 49% of these represented users, 28% customers, and 22% internal stakeholders.

We can statistically test the hypothesis that teams are increasingly able to satisfy their stakeholders as their Agility increases. For this, we used a simple statistical technique called multiple regression analysis. We entered the overall stakeholder satisfaction as the predicted value, and the five core processes as predictors. The regression model was significant (p <.001) and explained 29.2% of the observed variance in stakeholder satisfaction. This may not seem  that  high, but values above 20% are considered “very strong” in the social sciences. The scatterplot shown below shows the distribution of teams based on stakeholder satisfaction (vertical) and Agility (horizontal). Each dot represents a team:

A scatterplot and the results from a regression analysis may not be intuitive for many readers, especially those not familiar with statistics. So we also created a histogram by plotting the least Agile teams against the most Agile teams. It is a bit simplistic, but it illustrates the differences more dramatically.

There is one caveat to these results. The scatterplot suggests that teams are more likely to invite stakeholders when they are already quite Agile. This makes sense; non-Agile teams may interact less with their stakeholders and thus see fewer opportunities to invite them to evaluate the outcomes. But this means we lack data from teams that score very low on agility. However, it is likely that the difference would be even  stronger  if such stakeholders were included.

The bottom line is clear though. Agile teams have more satisfied stakeholders than less Agile teams. This effect is also very strong. So high autonomy, high responsiveness, high continuous improvement, high stakeholder concern,  and  high management support  clearly  go hand-in-hand with higher stakeholder satisfaction. Simply put; if organizations want more satisfied stakeholders, investing in the five processes of agility is a very clear evidence-based recommendation.

“The bottom line of the results is clear though. Agile teams have more satisfied stakeholders than non-Agile teams.”

Finding #3: Agile Teams Have Higher Morale

The second part of our business case can be made by looking at how agility affects team members. Employees are the “human capital” of modern-day organizations. Happy employees allow companies to save money on absenteeism, sick leave, and the hiring and onboarding of new employees to replace others who leave the company.

So it is helpful to look at the morale of teams. Team morale, or ‘esprit de corps’, reflects how motivating and purposeful the work feels to a team ( Manning, 1991 ). Many meta-analyses — statistical aggregations of datasets from many other empirical studies — have shown strong benefits of high morale and its corollaries, like job satisfaction. It reduces turnover and absenteeism among employees ( Hacket & Guion, 1989 ). It also increases performance ( Judge et. al., 2001 ) and proactive behavior ( LePine, Erez & Johnson, 2002 ).

“So there is a clear economic incentive for companies to encourage high morale in teams.”

But is morale higher in Agile teams than in less-Agile teams? To answer this question, we analyzed data from 1.976 teams and 5.273 team members from the  Scrum Team Survey .

So with this data, we ran another linear multiple regression analysis with team morale as the predicted value, and the five core factors as predictors. The resulting model was significant (p <.001) and explained 44.6% of the observed variance in team morale. This is a strong result when we consider that values above 20% are already considered “very strong” in the social sciences. The scatterplot is shown below. Each dot represents a team. The line reflects the optimal regression line. It is clearly visible that as the agility of a team increases (vertical), team morale also increases (horizontal).

We also created a histogram to plot the morale of the most Agile teams against that of the least Agile teams in our database, which is more visually clear:

So what do these numbers mean in practice? Generally speaking, morale will be  much  higher in Agile teams compared to less Agile teams. The morale in the highest-scoring teams (on agility) is almost twice as high as in the lowest-scoring teams. So high autonomy, high responsiveness, high continuous improvement, high stakeholder concern,  and  high management support  clearly  go hand-in-hand with high team morale.

“Generally speaking, morale will be much higher in Agile teams compared to non-Agile teams.”

Intermission: A Note On Causality

Careful readers may have wondered: “But wait! Correlation doesn’t imply causation”. The observable fact that team morale and stakeholder satisfaction are higher in Agile teams does not necessarily mean that agility is the cause. And this is true. It is possible that the effect is actually the reverse; high morale or high stakeholder satisfaction drives teams to become more Agile. Or both bias teams to evaluate their processes in a more positive light than when morale or stakeholder satisfaction is lower. It is also possible that other variables explain both results. For example, an organization with a very flat hierarchical structure  may  both enable high agility as well as high morale or high stakeholder satisfaction.

Unfortunately, causality is very hard to establish with certainty. This requires highly controlled experiments where only the level of agility is manipulated in a team. But how can one feasibly do that? Another approach is to track many organizations over time as they adopt Agile methodologies, while also measuring anything else that could influence their results other than agility itself. It would be wonderful to have such data! However, the sheer effort involved is so gargantuan that this is close to impossible. Fortunately, we don’t need to put the bar  that  high. While correlation doesn’t imply causation, it can certainly make a case for it. Especially when we have strong corroborating evidence from other sources. Our data clearly shows that agility  is  associated with team morale and stakeholder satisfaction. So if you measure that one is going up, the others will probably go up too. Thus, it is probably easier for organizations to create environments for teams that encourage their Agility (e.g. high autonomy, responsiveness, etc) than it is to directly change the morale of team members or even the satisfaction of stakeholders.

But let's take a look at potential corroborating evidence. What do scientific studies have to say?

Finding #4: Scientific Studies Corroborate That Agility Generates Better Business Outcomes

We defined agility in terms of five processes. Agile teams are  responsive , know who their  stakeholders  are and what they need, have  high autonomy , and  improve continuously . They are also  supported by management . What do scientific studies have to say about the business outcomes of Agile methodologies, as well as the factors we just mentioned? So we went to Google Scholar and  searched for review articles .

Cardozo et. al. (2010)  reviewed 28 scientific studies that investigated how Scrum is associated with overall business outcomes. A strength of such a review is that it allows for the identification of patterns across many studies. The authors identified five core outcomes of Scrum: 1) higher productivity in teams, 2) higher customer satisfaction, 3) higher quality, 4) increased motivation in teams and 5) a general reduction in costs. While this study covers even more business outcomes, the second and fourth points match our findings.

A critical part of Agile methods is that new iterations of a product are released more frequently than in more traditional approaches. Several empirical studies have indeed found that teams with a frequent delivery strategy are more likely to deliver successful project outcomes and satisfy stakeholders than teams that do not ( Chow & Cao, 2008 ,  Jørgensen, 2016 ). This also matches our findings for stakeholder satisfaction.

But a high delivery strategy is of little value if what goes out to stakeholders doesn’t match their needs, or doesn’t reach the right people. So teams need to develop a good understanding of who their stakeholders are and what they need.  Van Kelle et. al. (2015)  collected data from 141 team members, Scrum Masters, and Product Owners from 40 projects. They found that the ability of teams to develop a shared sense of value contributed significantly and strongly to project success. They also found that the overall agility of teams increased the chance of project success.  Hoda, Stuart & Marshall  (2011) interviewed 30 Agile practitioners over a period of 3 years. They found that teams that collaborate closely with customers are more successful. However, they also observed that customers are rarely as involved as would be expected from Agile methodologies. This supports our finding that stakeholder satisfaction goes up as teams become more involved with their stakeholders (stakeholder concern).

“The ability of teams to develop a shared sense of value contributed significantly and strongly to project success.”

While high responsiveness and high concern for the needs of stakeholders are arguably the two pillars that distinguish Agile teams from non-Agile teams, these pillars need a good foundation. This is where team autonomy and continuous improvement come into play. Both are important characteristics of Agile teams because it allows them to remain effective in the face of complex, unpredictable work. Many studies have identified high autonomy as an important prerequisite for Agile teams ( Moe, Dingsøyr & Dybå, 2010 ;  Donmez & Gudela, 2013 ;  Tripp & Armstrong, 2018 ;  Melo et. al. 2013 ).  Lee & Xia (2010)  surveyed 505 Agile projects and found that high autonomy allowed teams to respond more quickly to challenges. They also note that this is particularly relevant to complex challenges, which is typically the case for the product innovation that happens in Agile teams. As for continuous improvement, this is generally more a climate in teams than a process. It is marked by high safety, shared learning, high-quality Sprint Retrospectives, and ambitious quality standards.  Hoda & Noble (2017)  identified learning processes as essential for teams to become Agile. So while autonomy and continuous improvement may not  directly  result in business outcomes, they need to be present in order for Agile teams to generate outcomes that satisfy stakeholders, and through a process that is also satisfying to team members.

“While autonomy and continuous improvement may not  directly  result in business outcomes, they need to be present in order for Agile teams to generate outcomes that satisfy stakeholders, and through a process that is also satisfying to team members.”

Finally, this brings us to the role that management plays. Because their support is consistently identified by scientists as the most critical success factor to make all the above possible ( Van Waardenburg & Van Vliet, 2013 ;  de Souza Bemerjo et. al., 2014 ;  Young & Jordan, 2008 ;  Russo, 2021 ). The shift that management has to go through is described by  Manz et. al. (1987)  as “leading others to lead (themselves)”. The authority to make work-related decisions shifts from external managers to the teams themselves. So rather than taking the lead, managers have to take a more supporting role and ask teams where they need their help. Second, management has to understand the point of Agile methodologies like Scrum and support teams by removing any obstacles they experience.

Click to enlarge

There are many other factors that can be considered. But the five processes we identified as characteristics of Agile teams provide a good, evidence-based starting point to make Agile teams more effective, and generate better business outcomes. Together with Prof. Daniel Russo We investigated a sample of 4.940 team members, aggregated into 1.978 Scrum teams, and found that these processes — or factors — together explain a very large amount of how effective Scrum teams (75.6%) are, and 34.9% of team morale and 57.9% of stakeholder satisfaction ( Verwijs & Russo, 2022 ).

What About Other Business Outcomes?

Obviously, team morale and stakeholder satisfaction are just two business outcomes for which economic arguments can be made. But more outcomes can be considered, like business longevity, the ability to deliver value within budget, and so on. We may cover these in future posts, as this one has already become way too long. And if happier team members and happier stakeholders aren’t already convincing enough, good results on those other outcomes aren’t probably going to change minds either :).

Implications For Practitioners

So what does all this mean in practice?

• An important lesson we’ve had to learn is that you can’t sell Agile or Scrum based on frameworks or ideals. Ultimately, the role of (top) management is to keep their business healthy and economically sustainable. Thus, the best way to convince them is to show how Scrum or Agile helps in that regard. This business case should provide some good talking points.
• Generally speaking, it is a good idea to track important business outcomes as metrics. For example; the number of sales, the number of unhappy customers, absenteeism, etc. This provides you with an opportunity to take an evidence-based approach to improvements. You can also measure such metrics alongside an ongoing Agile adoption, and see how Agile is improving certain metrics (or not).
• You can use the  Scrum Team Survey  to diagnose your Scrum or Agile team for free. We also give you tons of evidence-based feedback. The  DIY Workshop: Diagnose Your Scrum Teams With The Scrum Team Survey  is a great starting point.
• Our Do-It-Yourself Workshops are a great way to start improving without the need for external facilitators. The  DIY Workshop: Discover The Needs Of Your Stakeholders With UX Fishbowl  or  Experiment: Deepen Your Understanding Of Scrum With Real-Life Cases  are great starting points. The  DIY Workshop: Build Understanding Between Scrum Teams And Management  is also very useful if management support is the biggest issue. Find many more  here .
• We offer a number of physical kits that are designed to start conversations with and between teams and the larger organization. We have the  Scrum Team Starter Kit , the  Unleash Scrum In Your Organization Kit , and the  Zombie Scrum First Aid Kit . Each comes with creative exercises that we developed in our work with Scrum and Agile teams.

Our goal with this post was to make a stronger, evidence-based business case for Agile and Scrum. Taken together, we have strong evidence to support the belief that Agile teams deliver more value to their stakeholders than less Agile teams. They also have much higher team morale. Any company worth its salt would see the economic value in both of these outcomes. Happy stakeholders generate more revenue, spread positive word-of-mouth, and are more likely to stay. Similarly, happy team members are more productive and more likely to stay for the long term. If companies seriously invest in Agile, and in particular in the five factors we covered in this post, they are  very  likely to see better results.

Is this an indisputable fact? No. But the evidence to support it is very strong indeed, and growing every day.

This post took over 46 hours to research and write . Find more  evidence-based posts here .  We thank all the authors of the referenced papers and studies for their work.

Cardozo, E. S., Araújo Neto, J. B. F., Barza, A., França, A. C. C., & da Silva, F. Q. (2010, April). SCRUM and productivity in software projects: a systematic literature review. In  14th International Conference on Evaluation and Assessment in Software Engineering (EASE)  (pp. 1–4).

Chow, T., & Cao, D. B. (2008). A survey study of critical success factors in agile software projects.  Journal of systems and software ,  81 (6), 961–971.

Dönmez, D., & Grote, G. (2013, June). The practice of not knowing for sure: How agile teams manage uncertainties. In  International Conference on Agile Software Development  (pp. 61–75). Springer, Berlin, Heidelberg.

Jørgensen, M. (2016). A survey on the characteristics of projects with success in delivering client benefits.  Information and Software Technology ,  78 , 83–94.

LePine, J. A., Erez, A., & Johnson, D. E. (2002). The nature and dimensionality of organizational citizenship behavior: a critical review and meta-analysis.  Journal of applied psychology ,  87 (1), 52.

Lee, G., & Xia, W. (2010). Toward agile: an integrated analysis of quantitative and qualitative field data on software development agility.  MIS quarterly ,  34 (1), 87–114.

Melo, C. D. O., Cruzes, D. S., Kon, F., & Conradi, R. (2013). Interpretative case studies on agile team productivity and management.  Information and Software Technology ,  55 (2), 412–427.

Moe, N. B., Dingsøyr, T., & Dybå, T. (2010). A teamwork model for understanding an agile team: A case study of a Scrum project.  Information and software technology ,  52 (5), 480–491.

Hacket, R. D. (1989). Work attitudes and employee absenteeism: A synthesis of the literature.  Journal of occupational psychology ,  62 (3), 235–248.

Hoda, R., & Noble, J. (2017, May). Becoming agile: a grounded theory of agile transitions in practice. In  2017 IEEE/ACM 39th International Conference on Software Engineering (ICSE)  (pp. 141–151). IEEE.

Hoda, R., Noble, J., & Marshall, S. (2011). The impact of inadequate customer collaboration on self-organizing Agile teams.  Information and software technology ,  53 (5), 521–534.

Judge, T. A., Thoresen, C. J., Bono, J. E., & Patton, G. K. (2001). The job satisfaction–job performance relationship: A qualitative and quantitative review.  Psychological bulletin ,  127 (3), 376.

Tripp, J., & Armstrong, D. J. (2018). Agile methodologies: organizational adoption motives, tailoring, and performance.  Journal of Computer Information Systems ,  58 (2), 170–179.

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Agile Unleashed at Scale

How john deere’s global it group implemented a holistic transformation powered by scrum@scale, scrum, devops, and a modernized technology stack, agile unleashed at scale: results at a glance, executive summary.

In 2019 John Deere’s Global IT group launched an Agile transformation with the simple but ambitious goal of improving speed to outcomes.

As with most Fortune 100 companies, Agile methodologies and practices were not new to John Deere’s Global IT group, but senior leadership wasn’t seeing the results they desired. “We had used other scaled frameworks in the past—which are perfectly strong Agile processes,” explains Josh Edgin,  Transformation Lead at John Deere, “But with PSI planning and two-month release cycles, I think you can get comfortable transforming into a mini-waterfall.” Edgin adds, “We needed to evolve.”

Senior leadership decided to launch a holistic transformation that would touch every aspect of the group’s work – from application development to core infrastructure; from customer and dealer-facing products to operations-oriented design, manufacturing and supply chain, and internal/back-end finance and human resource products.

Picking the right Agile framework is one of the most important decisions an organization can make. This is especially true when effective scaling is a core component of the overall strategy. “Leadership found the Scrum@Scale methodology to be the right fit to scale across IT and the rest of the business,” states Ganesh Jayaram, John Deere’s Vice President of Global IT. Therefore, the Scrum and Scrum@Scale frameworks, entwined with DevOps and technical upskilling became the core components of the group’s new Agile Operating Model (AOM).

Picking the right Agile consulting, training, and coaching support can be just as important as the choice of framework. Scrum Inc. is known for its expertise, deep experience, and long track record of success in both training and large and complex transformations. Additionally, Scrum Inc. offered industry-leading on-demand courses to accelerate the implementation, and a proven path to create self-sustaining Agile organizations able to successfully run their own Agile journey.

“I remember standing in front of our CEO and the Board of Directors to make this pitch,” says Jayaram, “because it was the single largest investment Global IT has made in terms of capital and expense.” But the payoff, he adds, would be significant. “We bet the farm so to speak. We promised we would do more, do it faster, and do it cheaper.”

John Deere’s CEO gave the transformation a green light.

Just two years into the effort it is a bet that has paid off.

Metrics and Results

Enterprise-level results include:

• Return on Investment: John Deere estimates its ROI from the Global IT group’s transformation to be greater than 100 percent .
• Output: Has increased by 165 percent , exceeding the initial goal of 125 percent.
• Time to Market: Has been reduced by 63 percent — leadership initially sought a 40 percent reduction.
• Engineering Ratio: When looking at the complete organizational structure of Scrum Masters, Product Owners, Agile Coaches, Engineering Managers, UX Professionals, and team members, leadership set a target of 75% with “fingers on keyboards” delivering value through engineering. This ratio now stands at 77.7 percent .
• Cost Efficiency: Leadership wanted to reduce the labor costs of the group by 20 percent . They have achieved this goal through insourcing and strategic hiring–even with the addition of Scrum and Agile roles.
• Employee NPS (eNPS): Employee Net Promoter Score, or eNPS, is a reflection of team health. The Global IT group began with a 42-point baseline. A score above 50 is considered excellent. The group now has a score of 65 , greater than the 20-point improvement targeted by leadership.

John Deere’s Global IT group has seen function/team level improvements that far exceed these results. Order Management, the pilot project for this implementation has seen team results which include:

• The number of Functions/Features Delivered per Sprint has increased by more than 10X
• The number of Deploys has improved by more than 15X

As Jayaram notes, “When you look at some of the metrics and you see a 1,000 percent improvement you can’t help but think they got the baseline wrong.”

But the baselines are right. The improvement is real.

John Deere’s Global IT group has also seen exponential results thanks to the implementation of the AOM. “We’ve delivered an order of magnitude more value and bottom-line impact to John Deere in the ERP space than in any previous year,” states Edgin. These results include:

• Time to Market: Reduced by 87 percent
• Deploys: Increased by 400 percent
• Features/Functions Delivered per Sprint: Has nearly tripled

Edgin adds that “every quality measure has improved measurably. We’re delivering things at speeds previously not thought possible. And we’re doing it with fewer people.”

Training at Scale and Creating a Self-Sufficient Agile Organization

The Wave/Phase approach has ensured both effective and efficient training across John Deere’s Global IT group. As of December 2021, roughly 24-months after its inception:

• 295 teams have successfully completed a full wave of training
• Approximately 2,500 individuals have successfully completed their training
• 50 teams were actively in wave training
• Approximately 150 teams were actively preparing to enter a wave

John Deere’s Global IT group is well on its way to becoming a self-sustaining Agile organization thanks to its work with Scrum Inc.

• Internal training capacity increased by 64 percent over a two-year span
• The number of classes led by internal trainers doubled (from 25 to 50) between 2020 and 2021

Click on the Section Titles Below to Read this I n-Depth  Case Study

1. introduction: the complex challenge to overcome.

This need can be unlocking innovation, overcoming a complex challenge, more efficient and effective prioritization, removing roadblocks, or the desire to delight customers through innovation and value delivery.

Ganesh Jayaram is John Deere’s Vice President of Global IT. He summarizes the overarching need behind this Agile transformation down to a simple but powerful four-word vision; improve speed to outcomes.

Note this is not going fast just for the sake of going fast – that can be a recipe for unhappy customers and decreased quality. Very much the opposite of Agile.

Dissect Jayaram’s vision, and you’ll find elements at the heart of Agile itself; rapid iteration, innovation, quality, value delivery, and most importantly, delighted customers. Had John Deere lost sight of these elements? Absolutely not.

As Jayaram explains, “we intended to significantly improve on delivering these outcomes.” To do this, Jayaram and his leadership team decomposed their vision of ‘improve speed to outcomes’ into three enterprise-level goals:

• Speed to Understanding: How would they know they are truly sensitive to what their customers – both internal and external – care about, want, and need?
• Speed to Decision Making: Decrease decision latency to improve the ability to capitalize on opportunities, respond to market changes, or pivot based on rapid feedback.
• Speed to Execution: Decrease time to market while maintaining or improving quality and value delivery.

Deere’s Global IT leadership knew achieving their vision and these goals would take more than incremental adjustments. Beneficial change at this level requires a holistic transformation that spans the IT group as well as the business partners.

They needed the right Agile transformation support, the ability to efficiently and effectively scale both training and operations and to build the in-house expertise to make the group’s Agile journey a self-sustaining one. As Josh Edgin, Global IT Transformation Lead at John Deere states, “We needed to evolve.”

2. Background: The Transformation's Ambitious Goals

Before this transformation, John Deere’s Global IT function operated like that of many large organizations. In broad terms, this meant that:

• The department had isolated pockets of Agile teams that implemented several different Agile frameworks in an ad hoc way
• Teams were often assigned to projects which were funded for a fixed period of time
• The exact work to be done on projects was dictated by extensive business analysis and similar plans
• Outsourcing of projects or components to third-party suppliers was commonplace
• The manager role was largely comprised of primarily directing and prioritizing work for their teams

At John Deere, process maturity was very high. Practices such as these were created in the Second Industrial Revolution and they can deliver value, especially if you have a defined, repeatable process. However, if you have a product or service that needs to evolve to meet changing market demands, these legacy leadership practices can quickly become liabilities.

• Pockets of Agile can deliver better results. But isolated Agile teams will inherently be dependent on non-Agile teams to deliver value. This limits the effectiveness and productivity gains of Agile teams specifically and the organization as a whole. The ad hoc use of different Agile frameworks, as Vice President Jayaram explains, compounds this problem by “not being something we could replicate and scale across the organization.”
• Project-oriented teams are often incentivized to deliver only what the project plan calls for – this inhibits a customer-centric mindset and the incorporation of feedback.
• Expecting teams to always stick to a predetermined plan limits their ability to innovate, creatively problem solve, or pivot to respond to changing requirements or market conditions.
• Outsourcing can create flexibility for organizations, but an over-reliance on outsourcing can slow speed to market and value delivery.
• Too many handoffs deliver little if any value. These can also significantly slow progress on any project or product which increases time to market.
• IT managers that are primarily delegators can become a form of overhead since they’re not actively producing value for customers. Their other skills can atrophy leaving them ill-equipped to help develop their team members, and overall team member engagement and talent retention can suffer.

2.1 The Transformation Goal

Improving speed to outcomes required greater employee engagement, decreased time to market, higher productivity, better prioritization, and alignment, and increase the engineering  ratio – the percentage of the organization with what Jayaram and Edgin call “fingers on keyboards” who create the products customers used.

Additionally, leadership wanted to increase the group’s in-house technical expertise, modernize its technology stack, unify around a single Agile framework that easily and efficiently scaled both across IT and the rest of the business, and reorganize its products and portfolios around Agile value streams. All while meeting or exceeding current quality standards.

Leadership wanted to go big. They wanted nothing less than a holistic Agile transformation that would improve every aspect of their business and all of the group’s 500 teams.

Next, senior leadership created the group-wide metrics they would use to measure success. These included:

• Output: Increase by 125 percent
• Time to Market: Reduce by 40 percent
• Engineering Ratio: Improve to 75 percent with “fingers on keyboards”
• Employee NPS (eNPS): 20-point improvement
• Cost Efficiency: They would reduce labor costs by 20 percent

At the time, these goals seemed ambitious to say the least. “I remember standing in front of our CEO and the Board of Directors to make this pitch,” says Jayaram, “because it was the single largest investment Global IT has made in terms of capital and expense.” But the payoff, he adds, would be significant. “We bet the farm so to speak. We promised we would do more, do it faster, and do it cheaper.”

John Deere’s CEO gave the transformation, called the Agile Operating Model (AOM), a green light.

3. Agile Operating Model: Why John Deere Chose Scrum And Scrum@Scale

Picking the right Agile framework is one of the most important decisions an organization can make. This is especially true when effective scaling is a core component of the overall strategy.

As Edgin explains, Agile was not new to John Deere’s Global IT group. “We had Agile practices. We had Agile teams. We were delivering value.”

But says Edgin, they weren’t satisfied with the results. So, a team began evaluating several different Agile methodologies. They examined what had been done at John Deere in the past and anticipated what the group’s future needs would be.

In the past, Edgin states, “We had used other scaled frameworks—which are perfectly strong Agile processes. But with PSI planning and two-month release cycles, I think you can get comfortable transforming into a mini-waterfall,” he says, “So we aligned on Scrum being the best fit for our culture and what we wanted to accomplish.”

Early on, leadership decided to implement a tight partnership where the IT delivery team(s) are closely coupled with the product organization that is the voice of the customer. When connecting multiple products together, “leadership found the Scrum@Scale methodology to be the best fit to scale across IT and the rest of the business,” says Jayaram.

The Scrum and Scrum@Scale frameworks, entwined with DevOps and technical upskilling, became integral Agile components of the group’s new AOM.

4. The Foundry: More Than A Training Facility

When it came time to name the final and arguably most important component of the AOM, the Foundry was a clear choice. It recognizes the company’s proud heritage while also symbolizing the change that would drive the Global IT group into the future.

Many organizations incorporate a “learning dojo model” when implementing an Agile transformation. These dojos and their teams are often home to Agile practices, conduct training sessions, and provide immersive coaching for newly launched Agile teams.

Training is, of course, a critical piece of any transformation. As is coaching. After all, switching from a traditional command and control approach to an Agile servant leader approach is a significant, sometimes disorienting change.

However, some corporate dojos work on what could be considered a “catch and release” strategy. They provide one or two weeks of baseline Agile training to individuals and teams, then say “get to it”. Coaching is limited and provided primarily by outside consultants.

The first problem with “catch and release” dojos is the cookie-cutter-like approach. A mass “baseline only” training strategy focus on volume — not understanding and usability.

The second problem is the over-reliance on outside consultants for team and organizational coaching. The cost-prohibited nature of outside consultants can limit the levels of coaching each team receives. This approach also equates to an organization outsourcing its Agile knowledge base and thought leadership — a critical competency in modern business.

The John Deere Foundry and Deere’s approach to embedding Agile Coaches and Scrum Masters across the organization represents the evolution of the dojo model by addressing these problems head-on.

4.1 A Relationship Built on Creating a Self-Sustaining Agile Organization

From the beginning, John Deere’s relationship with Scrum Inc. was built around creating a self-sustaining Agile organization. One where the Foundry’s own internal trainers and coaches would build all the capabilities they needed to ensure the Global IT group’s Agile transformation was a self-sustaining one.

This included not just materials needed to train new Agile teams. This relationship included sharing all the knowledge, skills, expertise, content, and tactics critical to training the coaches and trainers themselves.

The Foundry was launched by a dedicated team comprised of both John Deere’s internal trainers and coaches and their Scrum Inc. counterparts. They worked from a single backlog which prioritized knowledge sharing along with the “hands-on” work of training John Deere’s Global IT teams in Scrum.

Scrum Inc.’s consultants took leading roles during the first wave of training, while their John Deere counterparts observed and learned the content and techniques. By the third wave, John Deere’s internal trainers and coaches were taking the lead, with Scrum Inc.’s consultants there to advise and refine the program.

As time passed, a significant number of trainers and coaches inside the Foundry and across the organization showed the level of mastery needed to successfully pass Scrum Inc.’s intensive Registered Scrum Trainer and Registered Agile Coach courses. They could now credential their own students. More importantly, they demonstrated the ability to drive the Global IT group’s Agile transformation forward on their own.

This approach removes any reliance on outside contractors for key competencies.

4.2 Unified, Context-Specific Training

Implementing an Agile transformation is a complex challenge. Research continues to show that ineffective or insufficient levels of training and coaching are leading causes of failed implementations. So too are misalignment, misunderstandings, or outright misuse of the concepts and terminology important to any Agile framework.

In short, everyone needs to share a unified understanding of the new way of working for it to have any chance of working at all.

The best way to overcome the problem of a cookie-cutter approach is to ensure all training content is as context-specific as possible.

Here too the connection between the Foundry and Scrum Inc. was important.

The joint team of John Deere and Scrum Inc. staff swarmed to create Agile courses packed with customized, context-specific material that would resonate with the company’s Global IT group.

This content removed any feeling of a cookie-cutter approach and increased the usability of each lesson.

4.3 Results 

• Internal training capacity increased  by 64 percent over a two-year span
• John Deere trainers are now leading customized, context-specific courses including Scrum Master , Product Owner , Engineering Manager , Agile for Leaders , Scrum@Scale Practitioner , and Scrum@Scale Foundations

Perhaps the best measure of success is the waiting list of teams wanting to go through Agile training and coaching. Initially, hesitancy over implementing the Agile Operating Model and undergoing training was high. Initially, there wasn’t a high demand for the training, however as early adopters experienced success, demand for the training grew. Soon teams were actively seeking admission to the next planned cohort. Now, even with greatly expanded capacity, there is a waiting list.

The Foundry model has been so successful that John Deere’s Global IT group has expanded its footprint to include coaching in Mexico, Germany, and Brazil and launched a full-scale Foundry program at the company’s facility in India. In addition to the Foundry, embedded Agile coaches continuing to drive transformation locally are a key component to the model’s success.

5. How To Achieve Efficient and Effective Training at Scale

Enter the Wave/Phase training approach implemented by the Foundry with Scrum Inc.

In this model, each team includes IT engineers along with their Scrum Masters and business-focused Product Owners. A training cohort, usually comprised of 40 to 50 teams, constitutes a wave.

The waves themselves are comprised of three distinct phases:

• The Pre-Phase: Where teams and locally embedded agile coaches prepare for an immersive wave coaching experience
• The Preparation Phase: Focuses on product organization and customer journeys
• The Immersion Phase: Team launch, coaching, and full immersion into the AOM

All three phases are designed to run concurrently, which keeps the pipeline full, flowing, and ensures efficient training at scale. The transformation doesn’t end with the wave experience. Continuous improvement and ongoing transformation continue well beyond the Immersion Phase, led by embedded agile leaders in partnership with The Foundry.

The quality and context-specific nature of the training itself, along with the “left-seat-right-seat” nature of the coaching, ensures the learning is effective.

5.1 The Pre-Phase

Embedded Agile coaches are continuously transforming teams in their organizations even before they enter a wave. One goal of the Pre-Phase is to ensure readiness of teams looking to enter a wave. Acceptance criteria include:

• Proper organization design review to ensure teams are set up to succeed with the correct roles
• A draft plan for their product structure (explained in more detail in section 6 of this case study)
• The Scrum Roles of Product Owner, Engineering Manager, and Scrum Master are filled

Ryan Trotter is a principal Agile coach with more than 25 years of experience in various capacities at John Deere. Trotter says experience shows that not meeting one or more criteria “causes deeper conversations and could result in some mitigations or delaying until they’re ready.”

5.2 The Preparation Phase

The benefits of an Agile mindset and processes can be significantly limited by legacy structures.

Therefore, product organization is the primary focus of the preparation phase.

“We want to create a much stronger connection between the customer, and the Product Owner and team” explains Heidi Bernhardt who has been a senior leader of the Agile Operating Model since its inception. Bernhardt has been with John Deere for more than two decades now. She says individuals in the product and portfolio side of the house learn to “think in a different way.”

Participants in the preparation phase learn how to create customer journey maps and conduct real-world customer interviews to ensure their feedback loops are both informative and rapid — key drivers of success for any Scrum team and organization explains Bernhardt, “They’re talking with the customer every Sprint, asking what their needs are and what they anticipate in the future.”

They also learn how to manage and prioritize backlogs and how to do long-term planning in an Agile way.

Scrum Role training is a critical component of the preparation phase. Product Owners and Scrum Masters attend both Registered Scrum Master and Registered Product Owner courses.

Team members and others who interact regularly with the team take Scrum Startup for Teams , a digital, on-demand learning course offered by Scrum Inc. “Scrum Startup for Teams provides a really good base level of understanding,” says Ryan Trotter, “People can take it at their own pace and they can go back and review it whenever they want. It really hit a sweet spot for our software engineers.”

By the end of 2021 Scrum Startup for Teams had helped train roughly 2,500 people in the Global IT group and nearly the same number of individuals throughout the rest of John Deere — including those who aren’t on Scrum Teams but who work closely with them.

5.3 The Immersion Phase

The 10-week long immersion phase is where the Agile mindset and the AOM take flight. Where the Scrum and Scrum@Scale frameworks are fully implemented and the teams turn the concepts they’ve learned in the prior phases into their new way of working.

For John Deere’s Global IT group, immersion is not a theoretical exercise. It is not downtime. It is on-the-job training in a new way of working that meets each team at their current maturity level.

The first week of immersion is the only time teams aren’t dedicated to their usual duties.

During this time, says Trotter, coaches and trainers are reinforcing concepts, answering questions, and the teams are working through a team canvas. “This is where the team members identify their purpose, their product, and agree on how they’ll work together.”

Teams are fully focused on delivering value and their real-world product over the next nine weeks.

The Product Owner sets the team’s priorities, refines the backlog, and shares the customer feedback they’ve gathered. The Scrum Master helps the team continuously improve and remove or make impediments visible. Scrum Masters collaborates with an embedded Agile Coach that continues to champion transformation. Team members are delivering value. John Deere’s technical coach for the team is the Engineering Manager, a role that has transformed from the original team leader.

Those in the immersion phase receive intensive coaching, but they are also empowered to innovate or creatively problem solve on their own. The goal is for the coaches to help make agility and learning through experimentation a part of each team’s DNA.

The transition from students to practitioners becomes more apparent towards the end of immersion. Coaches take more of a back seat in the process explains Trotter. “We don’t want to create a false dependency. We want the teams to take ownership of their own Agile journey, to know the Foundry is here when needed but to be confident that they’ve got this and can run with it so they can continuously improve on their own.”

5.4 Measuring Wave Training Effectiveness

Measuring the effectiveness of any large-scale Agile training program requires more than just counting the number of completed courses or credentials received. The instructors and coaches must be able to see the Agile mindset has also taken hold and the implementation is making a positive impact on the organization. They also need the ability to see where problems are arising so they can provide additional coaching, training, and other resources where needed.

John Deere’s internal coaches created their Ten Immersion Principles (TIPS) as a way of measuring team health once they leave the immersion phase. Foundry coaches and trainers can then focus their efforts to create a continuous learning backlog that the team owns.

The TIPS are:

• Value Flows Through the System Super Fast: The team can deliver new products or features to customers very quickly. Any impediments or dependencies hindering delivery are quickly identified and addressed
• Amplify Feedback Loops: Rapid feedback from customers is a reality
• Continuous Learning Organization: The team is taking ownership of their learning paths and Agile journey
• Deliver Value in Small Increments: The team delivers value to customers in small pieces in order to gather feedback, test hypotheses, and pivot if needed
• Customer Centricity: The team is focused on those actually using the product and not just the stakeholders interested in the value the product should deliver
• Continuous Improvement: The team is always looking for ways to improve product and process
• Big and Visible: The team make progress, impediments, and all needed information transparent and easy to find
• Team is Predictable: The team tracks productivity metrics and estimates backlog items so that the anticipated date of delivery for products or features can be known
• Data-Driven Decisions: Feedback and real data, not the loudest voice or squeaky wheel — is used to make decisions
• Culture of Experimentation: The team is willing to take calculated risks and are able to learn from failure

5.5 Results

The positive business impact this training has had is outlined in section 8. Metrics and Results of this case study.

6. Agile Product and Portfolio Management: Why It's Important And How To Do It

Erin Wyffels keeps an old whiteboard in her office as a reminder of the moment she and her team solved a particularly complex problem.

Wyffels leads the product excellence area of the Foundry, supporting John Deere’s product leaders in product ownership and the dynamic portfolio process. She has a long history with traditional project management, inside and outside of IT. Over the past two years, she has grown her expertise in Agile product and portfolio management.

John Deere’s Global IT group manages a catalog of more than 400 digital products across 500 teams. These support every business capability in the broader company — from finance and marketing to manufacturing and infrastructure and operations.

Most large organizations are built on legacy systems. Left unchanged, these systems can limit the effectiveness of an Agile transformation. Wyffels says the prior structure of projects and portfolios within John Deere’s Global IT group was just such a system. “Our old taxonomy would in no way work with Agile.” So, she was picked to help change it for the better.

6.1 Why the Product and Portfolio Structure Needed to Change 

Before implementing the AOM, portfolio management was an annual affair. One that Wyffels says, “left everyone unhappy.”

Stakeholders and senior leadership would come with a list of desired projects. Financial analysts, IT department managers, and portfolio managers would then hash out funding for these projects. Teams would then be assigned to the resourced projects. All pretty standard stuff in the corporate world.

There are, however, several problems with this approach.

Take the focus on projects. Traditional project management is a very effective approach for defined processes. By definition, a project has a start date and an end date. A set amount of work is to be done at a predetermined cost.

The weakness in traditional project management becomes apparent when you have a product or service that will evolve and emerge over time. There are just too many unknowns for the traditional approach to work effectively.

Then there’s the time it takes to make decisions based on customer feedback. As Wyffels points out, the annual nature of the pre-AOM process meant, “The best information and data you could get would be a quarter old.” Agility requires far more rapid feedback loops.

Throw in a taxonomy built more around project type than the value delivered and employees who were moved to projects instead of allowed to own a product end-to-end, and John Deere’s Global IT group had a system that was optimized based on constraints but didn’t support where the company was headed next. They were ready for a system that promoted total product ownership including value, investment, and quality and move to the next level of product maturity.

6.2 Customer Perspective and Value Streams

The need to adopt Agile product and portfolio management processes became apparent early in the AOM’s implementation.

Amy Willard is a Group Engineering Manager currently leading the AOM Foundry. She says this also becomes apparent for individual teams taking part in the immersion phase of wave training. “We see changes in their product structure evolving. They have that aha moment and realize the structure we had before wasn’t quite right.”

The new, Agile structure focuses on three critical components — customer perspective, value streams, and a product mindset.

• Customer Perspective: Willard says the value delivered to customer personas is now used to more logically group products and product families. This Agile taxonomy helps to reduce time to market and boost innovation by fostering greater coordination and collaboration between teams.
• Value Streams: Dependencies, handoffs, and removing bottlenecks are also considered when creating product groups and portfolios. Willard notes, “We’ve had a lot of success with developing value stream maps across products,” also from a customer journey perspective.
• Product Mindset: Projects are defined by their scope, cost, and duration. Products are different, they evolve based on market feedback to continually deliver value to customers.  The difference may sound small, but Willard says it represents a “major shift” in mindset for the Global IT group.

The group has developed a curriculum for people in product roles in each transformation wave, with coaching support available to each person. The same content has been made available for all roles through a self-learning option, which is great for non-product roles or people that take a new position after their group’s wave is complete. Additionally, the communities being established for product roles and collaboration across people in the roles are the final building blocks to continued maturity after the transformation waves are done.

6.3 Highlighted Result: Better Value-Based Investments

The implementation of Agile product and portfolio management has yielded numerous positive results for John Deere’s Global IT group. These structural changes were critical drivers of the success noted in the Metrics and Results section of this case study.

This shift has also increased the ability of the group’s senior leadership to act like venture capitalists and invest resources into areas and products with the most potential value to both the organization and customers.

All products are now segmented into one of three categories based on actual value delivery and market feedback. These categories are:

• Grow: High-value products or opportunities worth a higher level of investment
• Sustain: Products we want to continue investing in, but not to differentiate
• Monitor: The capability is required to run a successful business, but the investment level may be reduced

There are some products that may have problems that need to be addressed immediately, or the investment levels are decreasing in certain areas of the product due to rationalization efforts.  Those products are flagged with Fix or Exit so the MetaScrum can have prioritization conversations more easily.

The heightened levels of business intelligence and customer feedback the AOM has fostered allow leadership to make better decisions about investments faster. It also reduces the cost of pivoting when market conditions change.

Strong products, as well as prioritization and alignment at every level of the organization are what will make the portfolio process most effective at John Deere.

7. Agile Culture Unleashed

In-depth:  .

John Deere has a long history of finding innovative solutions to common problems. Today, they’re still focused on driving customer efficiency, productivity, and value in sustainable ways.

As the company states , “We run so life can leap forward.”

That alone is enough to make the company iconic. For John Deere, that’s just the start.

People matter at John Deere. So too do concepts like purpose, autonomy, and mastery made famous by author Daniel Pink in his book Drive . “It’s no secret that there is a war for talent right now,” acknowledges Global IT Transformation Lead Josh Edgin, “and the market is only getting more competitive.” John Deere’s Global IT group is not immune to that competition. However, it has an advantage over other organizations — a thriving Agile culture.

Psychological safety, empowerment, risk-taking, are the foundations of the AOM.  At John Deere’s Global IT group,being Agile isn’t defined by holding Scrum events, it’s about implementing Scrum the way it was intended by Scrum co-creator Jeff Sutherland.

Work-life balance is important. The environment is one of collaboration and respect. The group also has a common sense based remote work policy and a number of hubs for when collocation is imperative.

All this doesn’t mean everything is perfect at John Deere’s Global IT group. Leadership is the first to tell you they can and will do even better. This itself is a powerful statement — this is a place where continuous improvement is everyone’s goal, not something management demands of delivery teams.

“We’re a company that is walking the talk,” says Global IT Vice President Ganesh Jayaram, “We’re making investments both in terms of our team members and technology.” Here are just three of the important ways John Deere’s Global IT group is indeed “walking the talk.”

7.1 Transformation Portal 

Big and visible. That is the goal of the group’s transformation portal. Everything relating to the AOM implementation can be found here.

Resources, wave schedules, thought leadership, and shared learnings are all available in this in-depth dashboard. Far more than you often see in other organizations. So too are metrics for individual teams and the group as a whole.

“People want purpose,” says Edgin, “they want to solve hard problems. They want to know the work they do matters.”  This portal allows individuals to better understand their roles and they work together.

7.2 Agile Career Paths

Log into John Deere’s AOM transformation portal and you’ll find a section with dedicated self-learning and career advancement paths. As Amy Willard explains, “We have a path for every persona and community led CoPs, supported by the Foundry.” This includes everything from User Experience Practitioner to Scrum Master and Product Owner.

Having clearly defined career paths and self-learning opportunities is an important step. It not only empowers continuous improvement, but it also shows professional agilists that they’re valued, their skills are important, and they have a bright future at the organization which does not dictate they must choose between agility and career advancement.

7.3 Prioritizing Team and Organizational eNPS Scores

Through the AOM John Deere was focused on creating a great place to work. Leadership believed that healthy teams would drive creativity, productivity, and sustainability.

John Deere’s Global IT group regularly measures this through both team and organizational Employee Net Promoter Scores, or eNPS. By asking employees if they would recommend their team to others, leaders can gain a better understanding of the health and engagement of the team.

Edgin explains the importance of these metrics this way, “When you create a culture where you have awesome employees with the right mindset and great technical skills you want them to stay here because this is where they want to be.”

The Global IT group began with a 42-point baseline. A score above 50 is considered excellent. The group now has a score of 65, greater than the 20-point improvement targeted by leadership.

Individual teams show similar results across the board.

8. Metrics and Results

Truly successful Agile transformations don’t have a finish line. That’s why they call it a journey of continuous improvement.

Still, just two years into this implementation, John Deere’s Global IT group is clearly well down that path. The results are as indisputable as they are impressive.

“When you look at a product area and you see a 1,000 percent improvement can’t help but think they got the baseline wrong,” says Global IT Vice President Ganesh Jayaram.

But, digging deeper, the improvement is real.

Take the productivity gains seen from the teams with Order Management. Jayaram says these teams were chosen for the AOM’s pilot project because it was “the most complicated, had the most dependencies, and had tentacles throughout the organization.” He believed that if Scrum, Scrum@Scale, and the AOM worked for Order Management, other teams couldn’t question if it would work for them.

Metrics show just how successful the pilot was.

Both results are exponentially greater than the 125 percent increase target set for the transformation. While the Order Management results are leading the way, results from other business capability areas inside the Global IT group are closely following.

Take the ERP-heavy environment of Manufacturing Operations. Here, Edgin notes, thanks to the Agile transformation and the modernization of the technology stack, “this year we’ve delivered an order of magnitude more value and bottom-line impact to John Deere in the ERP space than in any previous year.”

He adds that “Every quality measure has improved. We’re delivering things at speeds previously not thought possible. And we’re doing it with fewer people.” Other Manufacturing Operations results include:

• Deploys: increased by 400 percent
• Features/Functions Delivered per Sprint:  Has nearly tripled

8.1 Global IT Group Overall Results

Across the board, Deere’s Global IT Agile transformation has met or exceeded every initial goal set by senior leadership. Even when you combine results from both more mature teams and those that have just left the Foundry.

The targets that leadership set were to be reached within six months after completing immersion, but John Deere is seeing continued progress led by the business capability areas to achieve even higher results with the ongoing guidance of embedded change leaders such as Scrum Masters and business capability Agile coaches.

• Time to Market: Has been reduced by 63 percent — leadership initially sought a 40 percent reduction.
• Cost Efficiency: Leadership wanted to reduce the labor costs of the group by 20 percent . They have achieved this goal through insourcing and strategic hiring–even with the addition of Scrum and Agile roles.

8.2 Return on Investment and Impact on the Bottom Line

Agile transformations are an investment, in people, culture, productivity, innovation, and value delivery. Like any investment, transformations must deliver a positive return to be judged a success.

Deere’s ROI on the Global IT group’s transformation is estimated to be greater than 100 percent.

Successful Agile transformations also make a material impact on their company’s bottom line. Financially, 2021 was a banner year for John Deere. The company generated nearly $6 billion in annual net income — far more than its previous record.  So, it takes a lot to materially impact the company’s bottom line.

Both Global IT Transformation Lead Josh Edgin and Global IT Vice President Ganesh Jayaram believe the AOM has indeed helped move the financial needle at Deere.

“The metrics we track show very clearly the answer is yes,” says Jayaram.

Edgin states, “We’re helping the company achieve our smart industrial aspirations by improving how we serve our customers and boosting productivity.” He adds that the AOM allows the group to “innovate and deliver high quality, secure solutions at a much faster pace to meet and exceed our customer needs.”

9. Agile in Action: Supply Chain Solutions Amid Disruptions

A global leader with more than 25 brands,  John Deere  relies on a complex supply chain and efficient logistics to ensure production and delivery go as planned.

More than 10,000 parts are needed to assemble just one of John Deere’s  award-winning X9 combines  — twice the number of components needed to build a new car.

Modern combines, just like modern farming, also require far more technology than you likely think.

Sensors, antennas, and motherboards are now just as critical as tires, treads, and tines. Of course, John Deere makes far more than combines. Its iconic logo appears on everything from tillers and tractors to marine engines, motor graders, and the John Deere Gator utility vehicle. In all, the company manufactures more than 100 distinct lines of equipment.

Each product relies on efficient and effective supply chain management — from procurement and sourcing to cost control, shipping, customs, and final delivery.

Overall, John Deere depends on a complex network of thousands of suppliers from around the globe to build industry-leading John Deere products.

Coordinating and collaborating with that network through digital solutions largely falls to the company’s Supply Chain Solutions teams and Karen Powers, the Digital Product Manager for Supply Chain Management and Worldwide Logistics at John Deere.

“We have responsibility for every shipment around the world,” she explains, “ from any supplier to any factory, to any component operation in between, and for the end shipment of the completed good to the dealer.” To accomplish all of this, Powers’ team also works with aspects of the company’s global trade including imports, exports, customs, documentation, and duties.

It’s a mammoth undertaking even in the best of times. And 2020 and 2021 were hardly the best of times.

But John Deere’s Supply Chain Solutions teams were more than up to the task. They successfully used Scrum as a team framework to increase throughput and Scrum@Scale as an organizational framework to optimize alignment and value delivery. Together they helped Supply Chain Solutions navigate the challenges caused by a global pandemic and major supply chain disruptions.

John Deere didn’t just survive these complex times, the company thrived. At the end of November 2021, the company announced record profits.

Jay Strief, the Group Engineering Manager of Supply Chain Solutions, connects this success in part to managing through supply chain issues and puts it in personal terms. “The awesome story here is the change in the culture; innovation, risk-taking, and many clear examples of teams stepping out of their comfort zone to deliver new value.” All of this, he adds, “was made possible through our digital transformation.“

9.1 Why Supply Chain Solutions Went Agile

Powers has been a leader in the information technology space at John Deere for most of her two-decade career.

She helmed the company’s Business Process Integration organization and an ERP implementation for the company’s Construction & Forestry Division. Powers has also led John Deere’s global analytics organization and a variety of technical teams within finance and manufacturing. She is a master of the “classic” ways of working.

When asked if there’s anything Powers misses about those pre-Agile days she quickly answers “no,” before adding, “looking back at the challenges we had to overcome in the last 18 months, I can’t fathom trying to do that without being this Agile.”

Traditional supply chain management tactics had long served John Deere well. After all, it’s impossible to grow into a Fortune 100 company with a large global footprint without efficiently coordinating your network of suppliers and deliveries.

But, as a company, John Deere understands that good enough today may not work tomorrow. Powers and her teams believed the traditional approach wouldn’t be fast enough or flexible enough to keep up with the rate of innovation and business demands for digital solutions from the global supply chain organization.

Powers says procurement of digital solutions could take months to materialize – or longer. The needs of the business line making the request often changed during that time. What was delivered was what they originally asked for but not always what they now knew they needed. It was clear that John Deere needed to adapt to continue to support customers with growing technology needs and increasing expectations for efficiency.

Supply Chain Solutions needed to move faster and more efficiently to help John Deere continue to be an industry leader. So, they started to wonder, “How do we eliminate as many handoffs as possible? How do we streamline this process? How do we better interact with the customer or internal partners?” And Powers asked herself, “How do we ensure we have the right skills and the right talent to be able to respond faster?”

Innovation is one of John Deere’s core values and the company prides itself on creative problem solving. This is part of the DNA of the company and its culture. When Powers and her team learned about the Agile Operating Model (AOM) — a transformation strategy that had been introduced to modernize the John Deere Global IT group — and the collaboration with Scrum Inc. they pushed to be included in the second wave of the transformation.

In early 2020, while still in the immersion phase of their training, Supply Chain Solutions was called on to support the Global Supply Management organization dealing with the volatility, uncertainty, complexity, and ambiguity (V.U.C.A.) that has now become the norm for supply chains worldwide.   

9.2 Overcoming V.U.C.A.: COVID-19 and Supply Chain Disruptions

Designated as an essential business — John Deere has continued operating and building products that help build and maintain critical infrastructure and feed the planet — throughout the pandemic.

The challenge of keeping all of John Deere’s assembly lines running would be immense. But as Powers notes, “John Deere always rises to the challenge.”

At this point, John Deere’s Supply Chain Solution teams had effectively implemented both  Scrum  and  Scrum@Scale . Powers says both frameworks helped Supply Chain Solutions live up to its name.

No longer slowed by the overly burdensome and bureaucratic approach, the teams quickly pivoted from a primarily strategic focus to one that balanced both the tactical and strategic needs required during the pandemic.

Working in two-week Sprints allowed the teams to replan and reprioritize faster. They pivoted to overcome new pain points or the constantly changing conditions on the ground. John Deere’s Supply Chain Solutions teams have always had strong and reliable analytics and could see potential bottlenecks in their network. When paired with Scrum and Scrum@Scale, these teams now had the flexibility to act to counter the bottlenecks before they choked off critical parts.

Perhaps the most important change, however, came from the stronger alignment and team empowerment that both Scrum and Scrum@Scale helped build.

In the old ways of working, Supply Chain Solutions teams would often be told to undertake a predetermined solution by buyers and supply base managers, limiting the opportunity for Supply Chain Solution team members to share their expertise.

The Agile mindset Scrum and Scrum@Scale bring means those who do the work, and know it best, are free to figure out the most effective way to get it done. “To me, that was the big game-changer,” explains Powers, “because you have that collective brainpower, the folks who know the data and know the ins and outs that can provide things the business didn’t even dream of.”

Take the example of the shortage of materials brought on by the pandemic. Within their ferrous components commodity group, the supply chain analytics and sourcing teams took a new approach to manage cost and risk. John Deere leveraged its bill of materials to generate greater visibility into everything it purchased throughout its supply chain. John Deere used a tier taxonomy to indicate the difference between a completed component (Tier 1) and the pieces needed to make it (Tier 2). Heightened visibility into these different tiers allowed the company to creatively overcome bottlenecks before problems arose. Thus, better managing cost and risk.

“While the initial scope started as a single commodity, additional opportunities quickly came into view as the analytics group developed comprehensive views of our total spend by category,” says Powers. “The evolution of the tiered spend project was a great illustration of Agile in action. The iterative development and ongoing connection between category managers and analytics team members ensured that the end result was useful for a broad group of internal teams.”

The team’s solution to 2021’s worldwide microchip shortage was even more creative.

Normally, John Deere does not buy microchips directly. Instead, it buys completed boards that contain those chips from suppliers. Still, explains Powers, Supply Chain Solutions knew the shortage could detrimentally affect their businesses because “if the suppliers can’t get the chips, they can’t make the boards and we can’t put them into machines.”

So, Supply Chain Solutions asked their network how they could help suppliers secure the microchips directly. They assigned a few team members to create automation scripts that scoured the internet for microchips that would meet their specific needs and when they would be available. This new system helped supplement their suppliers.

All this, Powers explains, came with just one caveat for their suppliers, “all the chips John Deere helped secure would be sold back to us on a completed board.”

Again, John Deere’s lines kept running. That’s something other major manufacturers could not say. “Obviously we’re facing the same challenges other companies are,” explains Powers, “the difference is our ability to step out and do things we normally don’t do to help our suppliers. This, in turn, helps us secure what we need.”

Same team, new operating model and a new mindset, and the “ability to successfully operate in any situation.” That is what the Agile Operating Model, Scrum, and Scrum@Scale delivered for John Deere’s Global IT organization.

Strief puts it this way: “The digitalization of our supply chain business is not just about new technology, it is transformational in terms of new business value we are delivering. Along the way, we have delivered higher job satisfaction for our software engineers and continue to invest in developing cutting-edge skills in our people.”  

9.3 Structured to Deliver Strategic and Tactical Goals

As we know, 2020 and 2021 were some of the most challenging years supply chain professionals had faced in the modern era. Just delivering tactical goals could be a major accomplishment given the level of V.U.C.A. the function faced.

The ingenuity and dedication of John Deere’s Supply Chain Solutions team members, and their use of Scrum and Scrum@Scale, meant they could deliver both the tactical and strategic.

Along with their Scrum training, Supply Chain Solutions Agile journey began with two significant structural changes which helped the teams deliver beneficial outcomes.

As Powers explains, the first such change evolved how the unit was led. “We took what use to be a single management position and broke it out into two roles with different, more focused accountabilities.”

One role, the business digital product lead, focuses on the business problems the unit was helping to solve as well as examine ways technology can help drive those desired outcomes. This is Powers’ role.

The second role, held by Strief, focuses on ensuring teams have the right capabilities with digital skills, technical acumen, and depth of experience to innovate and deliver successfully and rapidly.

This new leadership structure ensures both Powers and Strief are laser-focused on their specific areas of expertise. They have clear accountabilities, know what each is responsible for, and allow for cleaner lines of communication and minimal bureaucratic hurdles. Powers believes that this split structure, “is what really makes this model work.”

The second significant structural change involved the teams themselves.

“In the past, teams were structured around an application or specific technology,” says Powers, “so a shift from a strategic project to a tactical need could slow that strategic project down significantly.”

Powers says, “We started really looking at our applications and processes,” in new ways. They identified what was obsolete as well as what could be streamlined or grouped together. Supply Chain Solutions then completely revamped their product taxonomy around these newly identified value streams and restructured their teams accordingly.

Besides being more efficient, Powers notes this new product structure also created, “a stronger sense of empowerment and ownership,” throughout the team — from the product owner to the team members. “That’s their baby and their pride and joy.”

So, they get to really take that to the next level and know they had a real hand in making a positive impact,” versus just checking off a list of requirements and requests.

The teams also changed how they worked.

In Scrum, teams break large work into smaller increments. This, says Powers, along with a well-prioritized backlog meant “the teams were able to move from the tactical to the strategic without losing momentum.” The net result of these changes in structure and process, combined with John Deere’s strong analytics, is clear; John Deere’s lines kept running — through the pandemic, supply bottlenecks, and shortages. At the same time, the Supply Chain Solutions teams were able to deliver multiple award-winning strategic initiatives that helped the company control or recoup costs and boost efficiency. These included:

• Modernizing the ‘Cost Central’ internal application that is a hub for material cost management throughout the company. The upgrades included increased its ease of use, visibility of data like expected cost, and an overall improvement in user experience and engagement.
• A strategic initiative that leveraged analytics and the increased visibility spurred by John Deere’s Agile transformation for digital products that  allowed the company to recoup some $20 million in duty drawbacks .
• A strategic initiative that combined machine learning and analytics to increase leverage buying power and cost control by creating visibility into parts with similar dimensions, components, performance, and material characteristics but different part numbers.

9.4 Additional Results and Metrics

John Deere’s leadership began their Agile transformation by setting ambitious goals. Each represents a level of targeted improvement any company would love to achieve.

Throw in the unprecedented level of complexity and V.U.C.A. that have been the hallmark of supply chains throughout 2020 and 2021 and you might expect that John Deere’s Supply Chain Solutions teams would, at best, come close to achieving them.

Instead, just six months after the end of the immersion phase of their training, Supply Chain Solutions has smashed through those ambitious goals and has achieved far more than anticipated. The data collected by John Deere on five specific areas tell the story best:

• Cycle Time:  Before John Deere’s Agile transformation, the time it took for Supply Chain Solutions to go from idea to delivery was 54 days. Now it takes just 11 days.  This represents a 79 percent improvement , far more than the 40 percent targeted by leadership.
• Time to Market:  Leadership wanted to decrease this by 40 percent.  Supply Chain Solutions has decreased it by 66 percent , from a baseline of 89 days to 30.
• Functions/Features Delivered per Sprint:  Supply Chain Solutions was delivering nine functions per sprint before their Agile transformation. Leadership wanted that number to increase by 125 percent. Six months after their immersion phase ended, Supply Chain Solutions is now delivering 49 functions per sprint,  an improvement of 448 percent .
• Deploys:  Here leadership targeted a 125 percent increase over the baseline of 10. Instead, Supply Chain Solutions has increased that to 67, a 567 percent improvement .
• Cost Efficiency:  Hiring the right people, with the right skills for the right roles allowed Supply Chain Solutions to eliminate ‘middlemen’ and costly handoffs. This allowed the teams to deliver the above results while  reducing overall costs by 20 percent .
• Team eNPS: Employee Net Promoter Score, or eNPS, is an effective way to measure team happiness and engagement. A score above 50 is considered excellent so leadership set a target score of 50+ for this metric.  Supply Chain Solutions’ current eNPS score is 60 .

To Powers, that last data point personifies their Agile transformation. “Having fun at work and getting things done are not mutually exclusive,” she says, “we went through this journey and people started having fun, and we’re seeing the difference in the results.”

9.5 Conclusion 

At the start of their Agile journey, many questioned if it would work in the structured and intertwined environment. “Lots of people doubted that Agile would work here. That you could do an Agile transformation in Supply Chain Solutions.”

Powers freely admits that she was one of those doubters.

Then, she had her “a-ha” moment.

“Suddenly I saw how it absolutely applies to everything you do,” no matter how complex or intertwined. She admits that “It may take a little blind faith to start your Agile journey,” before adding,” the pieces will make sense. The teams will deliver more, you’ll accomplish more, and everybody will love what they’re doing.” That, she says, is the game-changer. For Supply Chain Solutions, Agile allows them to adapt while the game itself keeps changing.

10. Future of Scrum, Scrum@Scale, and the Agile Operating Model at John Deere

The success of the AOM built on Scrum and Scrum@Scale as well as DevOps, Organization Design and a modernized technology stack is undeniable.

The group’s Scrum Teams are happier, more empowered, and more engaged. As Amy Willard notes, “We can deliver functionality that our customers love faster than ever before.” Rework is down. Quality is up.

“The verdict is in,” says Josh Edgin – The AOM was clearly “the right thing to do.”

Successful implementations are known to spread organically throughout an organization. Well beyond the group that launched the transformation. Edgin says this has already begun at John Deere.

“One of our Agile coaches was asked to go down to the factory floor and work with one of the factory teams. They had tremendous success.”

Global IT Vice President Ganesh Jayaram sees “The fact that Agile has made it into the vernacular of the broader company,” as one of his favorite signs of success.

Research and development, manufacturing, human resources, are all areas where he believes the AOM can help drive beneficial outcomes. “You can transform any function,” says Jayaram, “You have a backlog, you prioritize, you become customer-centric.” That, he says, would be the AOM’s biggest win.

As a company, John Deere’s higher purpose is clear: We run so life can leap forward. The Global IT group is positioned to help achieve that purpose for decades to come.

Update: On May 31st, 2022, Ganesh Jayaram was appointed the Chief Information Officer at John Deere. 

How John Deere’s Global IT Group Implemented a Holistic Transformation Powered by Scrum@Scale, Scrum, DevOps, and a Modernized Technology Stack

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Large-Scale Agile Transformation: A Case Study of Transforming Business, Development and Operations

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• First Online: 28 May 2020
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• Nils Brede Moe 10 &
• Marius Mikalsen 10  

Part of the book series: Lecture Notes in Business Information Processing ((LNBIP,volume 383))

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• International Conference on Agile Software Development

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Today, product development organizations are adopting agile methods in units outside the software development unit, such as in sales, market, legal, operations working with the customer. This broader adoption of agile methods has been labeled large-scale agile transformation and is considered a particular type of organizational change, originating in the software development units. So far, there is little research-based advice on conducting such transformations. Aiming to contribute towards providing relevant research advice on large-scale agile transformation, we apply a research-based framework for evaluating organizational agility on a product development program in a maritime service provider organization. We found that doing a large-scale agile transformation involves many significant challenges, such as having a shared understanding of the problem, getting access to users, and getting commitment to change that needs to be done. In order to overcome such challenges, we discuss the need for a holistic and integrated approach to agile transformation involving all the units linked to software development.

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Make Your Enterprise Agile Transformation Initiative an Awesome Success

Large-scale agile transformation at ericsson: a case study.

Maria Paasivaara, Benjamin Behm, … Minna Hallikainen

Enterprise Agility: Why Is Transformation so Hard?

• Large-scale agile transformation
• Agile methods
• Large-scale

1 Introduction

Software development teams are currently working on developing products providing new digitally enabled customer experiences - while simultaneously incubating and accelerating digital innovations - are facing increasingly complex problems to be solved. Part of the complexity is because solving such problems involves relying on several actors outside of the agile software development team [ 1 , 2 ]. One example is close cooperation with the business development unit needed in order to achieve the potential advantages of a continuous business and development process [ 3 ]. Another example is the need for fast feedback from the customer, which in agile software development is realized by the introduction of frequent software releases to the customer or market. Further, a transformation to continuous delivery needs to consider units such as operations (i.e., the customer-facing side of the organization) and sales and marketing [ 4 ]. Agile software teams cooperating with other non-agile units represent a challenge [ 8 ], as agile software teams work highly iterative in a sense and respond manner. Other units may be more plan and document-driven. The need for agile software development teams to interact with other units in the organization dynamically and responsively is why companies today aim to scale agile methods beyond software development. We understand such scaling as a large-scale agile transformation in the organization.

As agile methods scale and more units in the organization or entire organizations become agile, it is referred to as organizational agility. Overby et al. [ 5 ] define organizational agility as “the ability of firms to sense environmental change and respond appropriately,” and show the different combinations of sensing and response capabilities that organizations should have. They argue that a company that is highly effective at sensing environmental change but is slow to act or acts inappropriately cannot be considered agile. Likewise, a firm that responds appropriately will not be agile if it is unable to sense the correct opportunities to follow. In an agile organization, therefore, if operations sense a change in customer behavior, software development must change the digital customer experience must change, and so must sales and marketing must change accordingly. Worley et al. [ 6 ] argue that “agility allows an organization to respond in a more timely, effective, and sustained way than its competitors when changing circumstances require it.” Having the ability to make timely and effective and sustained change results in sustained high performance. Worley et al. (ibid.) introduce a framework to assess organizational agility based on the literature of organization design and flexible and agile organizations. The framework was validated with studies of performance data from 20 firms and interviews with executives. The framework explains routines, the features of these routines, and describes how agile organizations apply them. In order to grasp large-scale agile transformation, we will apply the framework. We chose that particular framework because it is based on organization studies theory and on findings from empirical studies (the framework is detailed in Table  1 in Sect.  2 ). However, as of yet, few other researchers have tested the framework. Motivated by the need for understanding how agile software development teams can interact with other units, how to do a large-scale agile transformation, and the need for research on frameworks for a large-scale agile transformation we ask the following research question:

How is a Large-Scale Agile Transformation Done in Practice?

In this paper, we examine large-scale agile transformation in the context of software product development. We understand an agile transformation as broadening the use of agile methods in an organization, that is, involving sales, marketing, development, and operations. The remainder of the paper is organized as follows: In Sect.  2 , we present relevant literature on large-scale agile transformation and the agile organization framework we use for understanding such transformation. In Sect.  3 , we describe our research method in detail. In Sect.  4 , we present results from a case study using the framework. We discuss our findings in Sect.  5 . Section  6 concludes and presents key findings from the study.

2 Background

In this section, we present existing research on large-scale agile transformation, identify a gap in the research, and suggest a framework for understanding such transformations.

2.1 The Challenges of Large-Scale Agile Transformation

Accelerating rates of technological change, shifting customer behavior, and changing business models and markets necessitate software development that is customer-centric, iterative, continuous, and experimental [ 1 ]. Organizations apply agile methods to these digital transformations in order to allow themselves to create, react to, embrace, and learn from change while enhancing customer value [ 7 ]. While agile methods have traditionally been practiced within software development teams, there is now a need for using agile methods for interaction between software teams and other non-development organizational units, such as markets, sales, and operations. In practice, this requires a close and continuous linkage between business units (market, sales, and operations) and software development units. The process of continuously assessing and improving this link is described as BizDev [ 3 ].

Dikert et al. [ 8 ] report that interaction with non-development units using agile methods is the second most challenging aspect of large-scale agile transformations. Challenges include adjusting to an incremental delivery pace, adjusting to product launch activities, and organizational reward models that do not encourage cross-unit collaboration. Working with agile methods across different units, therefore, involves handling an increasing number of actors, interface towards existing systems, and unexpected interdependencies [ 9 ]. For organizations with hierarchical and centralized decision-making structures, agile methods cause friction between management that work in traditional ways and agile units [ 10 , 11 ].

2.2 Transforming Business, Development and Operations

From the above reported practical challenges with a broadening of the agile method towards including business and operation units, there is a need for a theoretical framework that is capable of explaining what is needed to scale agile to the wider organization. To that end, we have chosen to apply a research-based framework for assessing organizational agility [ 6 ]. The framework shows that Agile organizations ought to have a set of strategies, structures, and systems that drive them towards higher performance and business agility. Four routines of agility are key:

Strategizing: How top management teams establish an aspirational purpose, develop a widely shared strategy, and manage the climate and commitment to execution

Perceiving: The process of broadly, deeply, and continuously monitoring the environment to sense changes and rapidly communicate these perceptions to decision-makers who interpret and formulate appropriate responses.

Testing: How the organization sets up, runs and learns from experiments.

Implementing: How the organization maintains its ability and capacity to implement changes, both incremental and discontinuous, as well as its ability to verify the contribution of execution to performance.

The above routines for strategizing, perceiving, testing, and implementing have 14 dimensions, outlined in Table  1 below.

Changing existing organizations is challenging. In some cases, it might be easier to create new adaptable organizations rather than to change an existing organization to be adaptable. However, all organizations have some agile features [ 12 ]. An alternative to creating a new organization, therefore, is to start an agile transformation in a part of the existing organizations that already have agile features, which software development units typically do have. The focus in the transformations should be on which features to address to increase agility and how to do it. A part of the organization can, for example, be everyone involved in the development of a product from team management, operation, software development, business, sales, legal, and marketing. In terms of how to do it, as different units are drawn together, it is important to allow for divergent views and opinions to be discussed to allow for transformation to occur. In the concept of “groan zone” [ 13 ], it is recognized that everyone has their frame of reference.

Moreover, when people misunderstand one another (which is likely when they all represent different units), they become more confused and impatient. Often, people do not want to be in the groan zone, because it is uncomfortable, but a facilitator can help. The facilitator’s main objective in the Groan Zone is to help the group develop a shared framework of understanding.

3 Research Design and Method

In this paper, we report findings from a company that conducted a large-scale agile transformation in one of their product development areas (as suggested above [ 12 ]), transforming sales and marketing, software development and operations at the same time. Their product development area is our unit of study and allows us to study how multiple disciplines from multiple organizational units interact when creating a software-based product. Our study is a holistic case study [ 14 ]. According to Yin, case studies are the preferred research strategy when a “question is being asked about a contemporary set of events over which the investigator has little or no control” (ibid, p. 9). we followed the five-step process proposed by Yin: 1) Case study design 2) Preparation for data collection. 3) Collecting evidence: execution of data collection on the studied case. 4) Analysis of collected data and 5) Reporting.

We collected data through observations of the collaboration over time in meetings and workshops, through interviews, by studying documentation and by participating in the planning of the agile transformation. The Company (name suppressed for anonymity) is a multinational provider of services the energy, process, and maritime industries, and was chosen because it participated in a research program on large-scale agile software development. The organization had developed a digital solution for booking ship surveys through a web portal. The process in which the digital solution replaced was manually and very costly. Further, booking surveys were sub-optimized, resulting in ships doing surveys in harbors that were not cost-effective and that did not allow all work to be done at once. The potential cost savings from using the digital solution was estimated to be over 10 million Euro per year. The challenge, as we entered the case, was that not cost savings were not sufficient.

3.1 Data Collection and Analysis

Our data collection (Table  2 ) started in August 2018, when the company needed to rethink the whole product development process in order to reach the estimated earnings of the digital solution. The company recognized that a critical issue was that the missing interaction between software development, sales, marketing, and operations. The missing interaction and the need for improving the product led to a transformation initiative. The researchers participated in all planning meetings of the initiative, lead two of the workshops and had status and synchronization meetings with representatives from the company, and conducted several interviews with key stakeholders. Besides, four large international customers were visited and interviewed. These customer interviews covered the following topics: Describing the customer business process and model, understanding the survey ordering process, reflecting on the usability of the new technology introduced. All activities were documented by taking notes, meeting minutes, and pictures of materials produced in the workshops. Also, we got access to product documentation, contracts, data on user activity on the digital portal, and plans. We ended the data collection in September 2019. The results from the transformation were presented back to the practitioners involved regularly in feedback meetings. More details about the case, the product, and the large-scale agile transformation is found in the results.

We used a variety of strategies to analyze the material [ 15 ]. First, we described the project and context in a narrative to achieve an understanding of what was going on in the large-scale agile transformation project. Then, we described aspects of the transformation by using a framework for assessing organizational agility [ 6 ] and analyzing the different routines proposed by the framework (as introduced in Table  1 ). Further, we analyzed the data by mapping it to the continuous processes described by Fitzgerald et al. [ 3 ] (i.e., continuous planning, development, and operations) to understand which processes were disconnected. We hypothesized that the disconnected processes were a core reason for why the company did not realize the potential of the solution. Then we categorized the data according to the organizational agility framework [ 6 ]. In the analysis, we emphasized how the need for change was interpreted by different participants in the transformation.

We first describe how the need for an agile transformation was detected (diagnosing phase), then we describe the outcome of the main activities in the transformation workshops and the work done after each workshop. Based on the results, we identified an understanding of how elements of a large-scale agile transformation are dealt with in practice.

4.1 Diagnosing

The new product was initiated in 2016, and the goal was to create a system for ship owners to book services for their ships through a portal instead of using the previous manual process. Booking through the portal makes it possible to suggest what combination of services to offer, and when the service should be conducted on a specific ship in a specific port. A system based on machine learning could potentially reduce the cost of surveyor traveling, reduce the total number of services needed, the need to offer services in expensive ports, and reduce the time a vessel needs to be in a port. Both the customers and the company could gain significant savings by replacing the manual booking process. The product development of the booking portal, which also included machine learning, went through several phases, from exploration, ideation to implementation. The work started in April 2016 by an analysis of the market, customer needs, and a concept study. A version of the product was tested in June 2017, and the product was launched in October 2017. Figure  1 shows the innovation journey as described by the company. All managers in the company got training in the innovation method. The planned functionality was implemented and launched, but the product did not meet its expectations. While the software development team implemented all the requested functionality, still only 30% of the customers followed the recommendation by the digital booking process.

The innovation journey from 2016–2017.

Further, the customers, in general, did not accept the recommendations provided by the planning part of the booking system. Recommendations were related to what services a ship should have, in which port the job should be done in, and when the service should happen. Further, there were many customer complaints regarding invoices. It became clear that there was confusion among some customers regarding the service ordered and the service provided by the company. Because most customers did not use the new booking process and, in general, did not accept the recommendations provided by the system, the cost savings were assessed to be very limited in August 2018.

A diagnosing workshop was initiated involving experts from software development and business and customer insight. The diagnosing workshop concluded that the lack of change in user behavior (such as lack of use) could not be explained by the design of the portal and challenges with the user interface alone. The workshop concluded on the following explanations on why the environed results were not achieved:

The company lacked important information on how the customers actually conducted the former manual booking process.

The overall company strategy was not aligned with the product strategy. While the new booking system required the company to offer services in limited ports, the company did not achieve a reduction in the number of ports where they had to offer services. Parts of the company still had wanted services to be provided in these ports, even if it was not cost-effective for the company as a whole.

Internal processes were not coordinated to help the customer in changing his behaviour (e.g., contracts, support, customer contacts).

A transformation was initiated to make all involved units in the company work together to change how they offered the digital service and then change customer behavior. The maritime sector is an old and traditional sector, which makes changes in business processes in the sector slow. Further, this transformation would enable the company to sense the customer needs better, and then respond to the needs as they change. The agile transformation needed to include the following, different organizational units: software development, legal, market, sales, business, and operations. The software development department had been working in an agile way since 2008 and was experienced in using agile, while the other units were still working in a non-agile way. It was agreed to conduct several workshops involving key stakeholders from all the different units. The question was how to conduct workshops to accelerate a transformation that would enable a large part of the company to sense and respond?

Different stakeholders from very different units in the company would necessarily represent different cultures, practices, and ideas. The workshop then needed to facilitate a period of divergent thinking before they could enter the “groan zone”. After a group of diverging ideas brainstormed a list, they found it challenging to discuss the ideas. Everyone had their frame of reference coming from the different units. Moreover, as people misunderstood each other, they become more confused and impatient. The researchers acted as facilitators in the workshops and helped guide the group through the groan zone.

4.2 Unfiltered Access to Customer Insight and Aligning Strategies

The first workshop had representatives from key internal stakeholders, such as customer insight, software development, and data analysis (analyzing the customer data), business, sales, and marketing. The highly cross-functional group had the authority to change the future direction of the technical solution and company internal processes. Each stakeholder was responsible for changes in their unit. The focus shifted from: “how do we provide a better user interface to change customer behavior,” to “what changes do we need to implement in our organization to be able to change customer behavior.” It became evident that to deliver an improved service in fewer ports, the company had to reduce the number of other ports in which the service was delivered. However, then some service stations around the world had to be closed down, and this needed top management support. Such significant changes created internal resistance, as a part of the organization would then need to reduce its service offerings and, as a consequence, would earn less money. Through workshops and meetings, the cross-functional group concluded:

How certain parts of the sales unit operated where hindering part of the product development organization from meeting directly with the customer, which hindered a more in-depth customer insight. To better understand who uses the new system and those who do not use it, there was a need for direct contact between the software development department and the customers. Several of the previous decisions related to product development were made on wrong assumptions.

For the company to adjust internally (e.g., stopping offering services in some ports), it was essential that cost and performance are measured on the company level and not per organizational unit. Since costs traditionally were measured per unit, each unit that will reduce their income will resist changes. There was a need to work closely with the world regions that needed to change their offerings of ports. New KPIs (key performance indicators) needed to be set for the whole company, not for individual units.

Better understand the link between the new business model of the company and how the model is linked to a change in customer behavior. Involving the service planning unit in order to change future contracts was seen as a critical measure.

Better use of statistics on user behavior in the portal. There is a need to continue analyzing patterns of various customer behavior, and to generate new Power BI Reports.

Use Machine Learning in a new way to understand better which services to provide in which ports, and which services not to offer.

4.3 Testing, Implementing and New Improvement

Based on more unfiltered access to the customer, new parts of the organization got access to new and essential insights. The situation was further improved by organizing meetings with valuable customers and by insight from interviewing these customers. The interview guide was targeted to understand the enablers of barriers to changing customer behavior. As a result, more insights into customer behavior were generated, particularly on the internal business processes that happened before the customer used the portal i.e., the customers’ internal planning process. Insight was also gained on what was most valuable when the customer made choices in the portal. Through the insight gained through the interview it was found why the customers did not accept recommendations from the new system. The customer behavior was driven by the need of making sure the ship was always operating, and therefore a familiar port is associated with less risk for the customer. One customer commented: “ The port predictions for container vessels are of no benefit because it does not propose ports I prefer. ”

As a result, from the customer interview process, it was concluded that there was a need to understand how the booking system better could support customer preferences, and further insight was needed on how to enable the customer to order services in an unfamiliar port. Knowledge from the workshops and customer activities was fed into the survey planning centers of the company (the planning centers that were spread around the world were engaged in helping customers plan their work). Changes in how the planning centers operated based on new insight is an example of the operational units change the way they deliver the services.

4.4 Next Steps

After changing the software and how the company interacted with the customers, it became evident that the changes had helped to result in the company starting to improve earnings on the product and service they provided radically. However, at the same time, it was clear that the agile transformation now also needed to include more unites, and that it would be an ongoing process with no specific end state.

The company started testing new functionality, which started changing customer behavior. Further, from a more in-depth analysis of the interviews, the need to continue pushing the customers to change their behavior by developing new contracts was considered an essential next step. Involving contract responsibilities in this phase was vital, and the second workshop was conducted. However, it became clear that to get the full effect of new features in the system; there was a need to segregate customers into two segments and to identify the service levels for these segments. Creating customer segments also put forward demands for contracts that would support the segments and, at the same time, needed to enable the customer behavior change to continue. The need for what was known as “smart contracts” was agreed upon in the last workshop. However, what a smart contract looked like was not fully understood.

Further, new questions emerged: is the salesforce ready to sell new products and negotiate new contracts for new customer segments? Are the customers ready to be offered different levels of services based on different contracts (the maritime sector is an old and conservative business)? It became evident in the workshop that sales and legal unites needed to be linked closely with the product development, and that future work was needed in this area.

4.5 Evaluating of Organizational Agility Using the Agility Framework of Worley

The agility framework defined by Worley et al. guided our agile transformation. The framework includes routines for strategizing, perceiving, testing, and implementing and has 14 dimensions (Table  1 ). To describe how a large-scale agile transformation is done in practice, we then mapped our findings into the framework (Table  3 ).

5 Discussion

Large-scale agile transformation is a critical issue in responding to the digital transformations that are ongoing in many sectors [ 1 ]. Several barriers to such transformation seen from industry experience have been identified, for example, change resistance [ 8 ], and inter-team coordination challenges [ 16 ]. While conceptual solutions such as continuous development and BizDev has been suggested [ 3 ], there is a lack of research-based advice on how agile transformations are to be performed in practice. Driven by our research question – How is a large - scale agile transformation done in practice? - we have reported findings from a case study of a maritime service provider that aimed to transform service bookings digitally. In the following, we answer this research question by discussing our findings in light of a research-based framework on agile organizations [ 6 ].

We found how a typical innovation journey was followed, a product was developed and launched, but the economic gains did not meet expectations. Importantly, as a consequence, the company started investigating the reasons why the product did not meet its projected earnings. One critical insight during the diagnosing phase was that it was not the design of the digital solution per se that caused the lack of customer uptake. For the solution to have its envisioned effects, it would require a change in the internal organization to be able to change customer behavior. The company started a change in a product development environment that already had some agile features, i.e., including software development that was already using agile methods, as suggested by [ 12 ]. The change process was done in order to improve its capacity for sensing customer behavior and adapting the digital solutions. The software development and business development units needed more unfiltered access to customer behavior. This is in line with [ 5 ], who argue that both sensing and adapting is essential for organizational agility.

We analyzed the steps taken by the unit under study in light of a research-based framework on agile organizations [ 6 ]. We found how the part of the organization doing a large-scale organizational transformation addressed all four routines in the framework. The first routine, strategizing, involved struggles to get a sense of shared purpose across the organization, changing business model in terms of offering services in fewer ports, and being committed to change. The second routine, perceiving, involved being willing to experiment with new products, being able to change who gets access to customer insight and that bringing stakeholders together across different units is a critical activity in enabling change. The third routine, testing, we found that it was not changing the technical parts of the system that was the most challenging, but rather to being able to experiment with the organization and making the necessary changes. The fourth routine, implementing, we found that monetary rewards systems and involvement of expertise with decision-making authority were vital in making transformation occur. The challenges and steps taken are in line with Dikert et al. [ 8 ] findings that show how integrating non-development units can be restricted to reward models that do not encourage cross-unit collaboration.

Our findings indicate that some of the frictions agile methods can cause [ 7 ], such as when the new portal started changing the business model of the sales apparatus. Such frictions indicates that large-scale agile transformation needs new decision structures, which means that a company needs to move from a hierarchical decision structure, and isolated decision structures for each department or unit, to a decision structure across the operational and strategic level of individual units.

Finally, we found that an agile transformation is an ongoing process and that the output of an agile transformation is more continuous processes covering several units, many of which are outside software development. A critical insight is that continuous processes require continues learning and continuous experimentation [ 3 ]. Our mapping of findings from the case to the agility framework presented in Table  3 signifies the need for continuity.

5.1 Limitation and Future Research

The main limitations of our study are the single-case design and the possibility of bias in data collection and analysis. The fact that we used a single-case holistic design makes us more vulnerable to bias and eliminates the possibility of direct replication or the analysis of contrasting situations. Therefore, the general criticisms about single-case studies, such as uniqueness and special access to key informants, may also apply to our study. However, our rationale for choosing the company as our case was that it represents a critical case for explaining the challenges of conducting a large-scale agile transformation in practice. Our mode of generalization is analytical, i.e., we used a previously developed framework as a template with which we compared the empirical results of the case study, which is similar to Yin’s [ 14 ] concept of Level Two inference.

Another possible limitation is that we based much of our data collection and analysis on semi-structured interviews [ 17 ]. The use of multiple data sources made it possible to find evidence for episodes and phenomena from more than one data source; we also observed, talked to, and interviewed the project members over a period of 13 months, which made it possible to study the phenomena from different viewpoints as they emerged and changed.

The results of this study point out several directions for future research. Firstly, our study highlights several challenges that must be met when conducting a large-scale agile transformation. Accordingly, further work should focus on identifying and addressing other problems that may arise when conducting an agile transformation. Secondly, the framework should be used for studying more mature organizations or departments in order to get a better understanding of the main challenges in such transformations. The observed transformation was the first in the company using the framework. When studying the company doing the next transformation on another product, this should be studied since the case then will be more mature, and other issues from using the framework will emerge.

6 Conclusion

We have conducted a 13-month study of professionals in a large-scale agile transformation. Our case study of conducting an agile transformation highlights several significant challenges that need to be overcome for a transformation to be successful. This work reports a case study of how a transformation can be done in practice, and also apply a framework for understanding and conducting such an agile transformation. This work is an essential step in its own right since there is much confusion around terms related to agile transformations, similar to early research on the agile transformation of teams [ 18 ]. The need for a framework for agile transformation outside of the software development unit is evident when one considers the emergence of phenomena such as Enterprise Agile, Beyond Budgeting, DevOps, Lean Startups, and many other concepts from business agility in general. These are all indicative of the need for a holistic and integrated approach across all the units linked to software development.

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This research is funded by the Digital Class project and the Research council of Norway through grant 309631, and 2.0 which is partly supported by the Research council of Norway through grant 236759.

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Agile Case Studies: Examples Across Various Industires

Home Blog Agile Agile Case Studies: Examples Across Various Industires

Agile methodologies have gained significant popularity in project management and product development. Various industries have successfully applied Agile principles , showcasing experiences, challenges, and benefits. Case studies demonstrate Agile's versatility in software development, manufacturing, and service sectors. These real-world examples offer practical insights into Agile implementation, challenges faced, and strategies to overcome them. Agile case studies provide valuable inspiration for implementing these methodologies in any project, regardless of the organization's size or industry.

Who Uses Agile Methodology?

Agile methodology is used by a wide variety of organizations, including:

• Software development companies use Agile to improve collaboration, increase flexibility, and deliver high-quality software incrementally.
• IT departments use agile to manage and execute projects efficiently, respond to changing requirements, and deliver value to stakeholders in a timely manner.
• Startups use agile to quickly adapt to market changes and iterate on product development based on customer feedback.
• Marketing and advertising agencies use agile to enhance campaign management, creative development, and customer engagement strategies.
• Product development teams use agile to iterate, test, and refine their designs and manufacturing processes.
• Project management teams use agile to enhance project execution , facilitate collaboration, and manage complex projects with changing requirements.
• Retail companies use agile to develop new marketing campaigns and improve their website and e-commerce platform.

Agile Case Study Examples

1. moving towards agile: managing loxon solutions.

Following is an Agile case study in banking :

Loxon Solutions, a Hungarian technology startup in the banking software industry, faced several challenges in its journey towards becoming an agile organization. As the company experienced rapid growth, it struggled with its hiring strategy, organizational development, and successful implementation of agile practices. 

How was it solved:

Loxon Solutions implemented a structured recruitment process with targeted job postings and rigorous interviews to attract skilled candidates. They restructured the company into cross-functional teams, promoting better collaboration. Agile management training and coaching were provided to all employees, with online courses playing a crucial role. Agile teams with trained Scrum Masters and Product Owners were established, and agile ceremonies like daily stand-ups were introduced to enhance collaboration and transparency.

2. Contributions of Entrepreneurial Orientation in the Use of Agile Methods in Project Management

This Agile project management case study aims to analyze the degree of contribution of entrepreneurial orientation (EO) in the use of agile methods (AM) in project management. The study focuses on understanding how EO influences the adoption and effectiveness of agile methods within organizations. Through a detailed case study, we explore the relationship between entrepreneurial orientation and Agile methods, shedding light on the impact of entrepreneurial behaviors on project management practices.

A technology consulting firm faced multiple challenges in project management efficiency and responsiveness to changing client requirements. This specific problem was identified because of the limited use of Agile methods in project management, which hindered the company's ability to adapt quickly and deliver optimal outcomes.

Entrepreneurial orientation (EO) is a multidimensional construct that describes the extent to which an organization engages in entrepreneurial behaviors. The technology firm acknowledged the significance of entrepreneurial orientation in promoting agility and innovation in project management. 

The five dimensions of Entreprenurial orientation were applied across the organization.

• Cultivating Innovativeness: The technology consulting firm encouraged a culture of innovativeness and proactiveness, urging project teams to think creatively, identify opportunities, and take proactive measures. 
• Proactiveness: Employees were empowered to generate new ideas, challenge traditional approaches, and explore alternative solutions to project challenges. This helped them to stay ahead of the competition and to deliver the best possible results for their customers.
• Encouraging Risk-Taking: The organization promoted a supportive environment that encouraged calculated risk-taking and autonomy among project teams. Employees were given the freedom to make decisions and take ownership of their projects, fostering a sense of responsibility and accountability.
• Autonomy: Agile teams were given the autonomy to make decisions and take risks. This helped them to be more innovative and to deliver better results.
• Nurturing Competitive Aggressiveness: The technology firm instilled a competitive aggressiveness in project teams, motivating them to strive for excellence and deliver superior results.

3. Improving Team Performance and Engagement

How do you ensure your team performs efficiently without compromising on quality? Agile is a way of working that focuses on value to the customer and continuous improvement. Integrating Agile in your work will not only make the team efficient but will also ensure quality work. Below is a case study that finds how agile practices can help teams perform better.

The problem addressed in this case study is the need to understand the relationship between the Agile way of working and improving team performance and engagement. We see that teams often face challenges in their daily work. It could be a slow turnover due to bad time management, compromised quality due to lack of resources, or in general lack of collaboration. In the case study below, we will understand how adopting agile practices makes teams work collaboratively, improve quality and have a customer-focused approach to work.

How it was Solved:

A number of factors mediated the relationship between agile working and team performance and engagement. 

• Create a culture of trust and transparency. Agile teams need to be able to trust each other and share information openly. This will help to create a sense of collaboration and ownership. This in turn can lead to increased performance and engagement. 
• Foster communication and collaboration. Effective communication within the team and with stakeholders helps everyone be on the same page.
• Empower team members. Agile teams need to be empowered to make decisions and to take risks. 
• Provide regular feedback. Team members need to receive regular feedback on their performance. This helps them to identify areas where they need improvement. 
• Celebrate successes. By celebrating successes, both big and small, team members are motivated. This in turn creates a positive work environment. 
• Provide training and development opportunities. help the team to stay up to date on the latest trends and to improve their skills. 
• Encourage continuous improvement: Promoting a culture of continuous improvement helps the team to stay ahead of the competition and to deliver better results for their customers. 

It was concluded that agile ways of working can have a positive impact on employee engagement and team performance. Teams that used agile methods were more likely to report high levels of performance and engagement.

4. $65 Million Electric Utility Project Completed Ahead of Schedule and Under Budget

Xcel Energy faced a significant challenge in meeting the Reliability Need required by the Southwest Power Pool in New Mexico. The company had committed to constructing a new 34-mile, 345-kilovolt transmission line within a strict budget of $65 million and a specific timeline. Additionally, the project had to adhere to Bureau of Land Management (BLM) environmental requirements. These constraints posed a challenge to Xcel Energy in terms of project management and resource allocation.

A PM Solutions consultant with project management and utility industry experience was deployed to Xcel Energy.

The PM Solutions consultant deployed to Xcel adapted to the organization's structure and processes, integrating into the Project Management functional organization. He utilized years of project management and utility industry experience to provide valuable insights and guidance.

• Collaborative and social skills were used to address roadblocks and mitigate risks.
• Focused on identifying and addressing roadblocks and risks to ensure timely project delivery.
• Vendor, design, and construction meetings were organized to facilitate communication and collaboration.
• Monitored and expedited long-lead equipment deliveries to maintain project schedule.
• Design and Construction milestones and commitments were closely monitored through field visits.
• Actively tracked estimates, actual costs, and change orders to control project budget .
• Assisted functional areas in meeting their commitments and resolving challenges.

The project was completed eleven days ahead of schedule and approximately $4 million under budget. The management team recognized the project as a success since it went as planned, meeting all technical and quality requirements. 

5. Lean product development and agile project management in the construction industry

The construction industry, specifically during the design stage, has not widely embraced Lean Project Delivery (LPD) and Agile Project Management (APM) practices. This limited adoption delays the industry's progress in enhancing efficiency, productivity, and collaboration in design.

• Integrated project delivery and collaborative contracts: Collaborative contracts were implemented to incentivize teamwork and shared project goals, effectively breaking down silos and fostering a collaborative culture within the organization.
• Lean principles in design processes: Incorporating Lean principles into design processes was encouraged to promote lean thinking and identify non-value-adding activities, bottlenecks, and process inefficiencies. 
• Agile methodologies and cross-functional teams: Agile methodologies and cross-functional teams were adopted to facilitate iterative and adaptive design processes. 
• Digital tools and technologies: The organization embraced digital tools and technologies, such as collaborative project management software , Building Information Modeling (BIM), and cloud-based platforms. 
• A culture of innovation and learning: A culture of innovation and learning was promoted through training and workshops on Lean Project Delivery (LPD) and Agile Project Management (APM) methodologies. Incorporating Agile management training, such as KnowledgeHut Agile Training online , further enhanced the team's ability to implement LPD and APM effectively. 
• Clear project goals and metrics: Clear project goals and key performance indicators (KPIs) were established, aligning with LPD and APM principles. Regular monitoring and measurement of progress against these metrics helped identify areas for improvement and drive accountability.
• Industry best practices and case studies: industry best practices and case studies were explored, and guidance was sought from experts to gain valuable insights into effective strategies and techniques for implementation.

6. Ambidexterity in Agile Software Development (ASD) Projects

An organization in the software development industry aims to enhance their understanding of the tensions between exploitation (continuity) and exploration (change) within Agile software development (ASD) project teams. They seek to identify and implement ambidextrous strategies to effectively balance these two aspects.

How it was solved:

• Recognizing tensions: Teams were encouraged to understand and acknowledge the inherent tensions between exploitation and exploration in Agile projects.
• Fostering a culture of ambidexterity: The organization created a culture that values both stability and innovation, emphasizing the importance of balancing the two.
• Balancing resource allocation: Resources were allocated between exploitation and exploration activities, ensuring a fair distribution to support both aspects effectively.
• Supporting knowledge sharing : Team members were encouraged to share their expertise and lessons learned from both exploitation and exploration, fostering a culture of continuous learning.
• Promoting cross-functional collaboration: Collaboration between team members involved in both aspects was facilitated, allowing for cross-pollination of ideas and insights.
• Establishing feedback mechanisms: Feedback loops were implemented to evaluate the impact of exploitation and exploration efforts, enabling teams to make data-driven decisions and improvements.
• Developing flexible processes: Agile practices that supported both stability and innovation, such as iterative development and adaptive planning, were adopted to ensure flexibility and responsiveness.
• Providing leadership support: Leaders promoted and provided necessary resources for the adoption of agile practices, demonstrating their commitment to ambidexterity.
• Encouraging experimentation: An environment that encouraged risk-taking and the exploration of new ideas was fostered, allowing teams to innovate and try new approaches.
• Continuous improvement: Regular assessments and adaptations of agile practices were conducted based on feedback and evolving project needs, enabling teams to continuously improve their ambidextrous strategies.

7. Problem and Solutions for PM Governance Combined with Agile Tools in Financial Services Programs

Problem: The consumer finance company faced challenges due to changing state and federal regulatory compliance requirements, resulting in the need to reinvent their custom-built storefront and home office systems. The IT and PMO teams were not equipped to handle the complexities of developing new systems, leading to schedule overruns, turnover of staff and technologies, and the need to restart projects multiple times.

How it was Solved: 

To address these challenges, the company implemented several solutions with the help of PM Solutions:

• Back to Basics Approach: A senior-level program manager was brought in to conduct a full project review and establish stakeholder ownership and project governance. This helped refocus the teams on the project's objectives and establish a clear direction.
• Agile Techniques and Sprints: The company gradually introduced agile techniques, starting with a series of sprints to develop "proof of concept" components of the system. Agile methodologies allowed for more flexibility and quicker iterations, enabling faster progress.
• Expanded Use of JIRA: The company utilized Atlassian's JIRA system, which was already in place for operational maintenance, to support the new development project. PM Solutions expanded the use of JIRA by creating workflows and tools specifically tailored to the agile approach, improving timeliness and success rates for delivered work.
• Kanban Approach: A Kanban approach was introduced to help pace the work and track deliveries. This visual management technique enabled project management to monitor progress, manage workloads effectively, and report updates to stakeholders.
• Organizational Change Management: PM Solutions assisted the company in developing an organizational change management system. This system emphasized early management review of requirements and authorizations before work was assigned. By involving company leadership in prioritization and resource utilization decisions, the workload for the IT department was reduced, and focus was placed on essential tasks and priorities.

8. Insurance Company Cuts Cycle Time by 20% and Saves Nearly $5 Million Using Agile Project Management Practices

In this Agile Scrum case study, the insurance company successfully implemented Agile Scrum methodology for their software development projects , resulting in significant improvements in project delivery and overall team performance.

The insurance company faced challenges with long project cycles, slow decision-making processes, and lack of flexibility in adapting to changing customer demands. These issues resulted in higher costs, delayed project deliveries, and lower customer satisfaction levels.

• Implementation of Agile Practices: To address these challenges, the company decided to transition from traditional project management approaches to Agile methodologies. The key steps in implementing Agile practices were as follows:
• Executive Sponsorship: The company's leadership recognized the need for change and provided full support for the Agile transformation initiative. They appointed Agile champions and empowered them to drive the adoption of Agile practices across the organization.
• Training and Skill Development: Agile training programs were conducted to equip employees with the necessary knowledge and skills. Training covered various Agile frameworks, such as Scrum and Kanban, and focused on enhancing collaboration, adaptive planning, and iterative development.
• Agile Team Formation: Cross-functional Agile teams were formed, consisting of individuals with diverse skill sets necessary to deliver projects end-to-end. These teams were self-organizing and empowered to make decisions, fostering a sense of ownership and accountability.
• Agile Project Management Tools: The company implemented Agile project management tools and platforms to facilitate communication, collaboration, and transparency. These tools enabled real-time tracking of project progress, backlog management, and seamless coordination among team members.

9. Agile and Generic Work Values of British vs Indian IT Workers

Problem: 

In this Agile transformation case study, the problem identified is the lack of effective communication and alignment within an IT firm unit during the transformation towards an agile work culture. The employees from different cultural backgrounds had different perceptions and understanding of what it means to be agile, leading to clashes in behaviors and limited team communication. This situation undermined morale, trust, and the sense of working well together.

The study suggests that the cultural background of IT employees and managers, influenced by different national values and norms, can impact the adoption and interpretation of agile work values.

• Leadership: Leaders role-modeled the full agile mindset, along with cross-cultural skills. They demonstrated teamwork, justice, equality, transparency, end-user orientation, helpful leadership, and effective communication . 
• Culture: Managers recognized and appreciated the cultural diversity within the organization. Cultural awareness and sensitivity training were provided to help employees and managers understand and appreciate the diverse cultural backgrounds within the organization.
• Agile values : The importance of agile work values was emphasized, including shared responsibility, continuous learning and improvement, self-organizing teamwork, fast fact-based decision-making, empowered employees, and embracing change. Managers actively promoted and reinforced these values in their leading and coaching efforts to cultivate an agile mindset among employees.
• Transformation: A shift was made from a centralized accountability model to a culture of shared responsibility. Participation in planning work projects was encouraged, and employees were empowered to choose their own tasks within the context of the team's objectives.
• Roadmap: An agile transformation roadmap was developed and implemented, covering specific actions and milestones to accelerate the adoption of agile ways of working. 
• Senior management received necessary support, training, and additional management consultancy to drive the agile transformation effectively.

Benefits of Case Studies for Professionals

Case studies provide several benefits for professionals in various fields: 

• Real-world Application: Agile methodology examples and case studies offer insights into real-life situations, allowing professionals to see how theoretical concepts and principles are applied in practice.
• Learning from Success and Failure: Agile transformation case studies often present both successful and failed projects or initiatives. By examining these cases, professionals can learn from the successes and avoid the mistakes made in the failures.
• Problem-solving and Decision-making Skills: Case studies present complex problems or challenges that professionals need to analyze and solve. By working through these cases, professionals develop critical thinking, problem-solving, and decision-making skills. 
• Building Expertise: By studying cases that are relevant to their area of expertise, professionals can enhance their knowledge and become subject matter experts. 
• Professional Development: Analyzing and discussing case studies with peers or mentors promotes professional development.
• Practical Application of Concepts: Teams can test their understanding of concepts, methodologies, and best practices by analyzing and proposing solutions for the challenges presented in the cases. 
• Continuous Learning and Adaptation: By studying these cases, professionals can stay updated on industry trends, best practices, and emerging technologies. 

In conclusion, agile methodology case studies are valuable tools for professionals in various fields. The real-world examples and insights into specific problems and solutions, allow professionals to learn from others' experiences and apply those learning their own work. Case studies offer a deeper understanding of complex situations, highlighting the challenges faced, the strategies employed, and the outcomes achieved.

The benefits of case studies for professionals are numerous. They offer an opportunity to analyze and evaluate different approaches, methodologies, and best practices. Case studies also help professionals develop critical thinking skills, problem-solving abilities, and decision-making capabilities through practical scenarios and dilemmas to navigate.

Overall, agile case study examples offer professionals the opportunity to gain practical wisdom and enhance their professional development. Studying real-life examples helps professionals acquire valuable insights, expand their knowledge base, and improve their problem-solving abilities.

Frequently Asked Questions (FAQs)

Three examples of Agile methodologies are:

Scrum: Scrum is one of the most widely used Agile frameworks. It emphasizes iterative and incremental development, with a focus on delivering value to the customer in short, time-boxed iterations called sprints. 

Kanban: Kanban is a visual Agile framework that aims to optimize workflow efficiency and promote continuous delivery.

Lean: Lean is a philosophy and Agile approach focused on maximizing value while minimizing waste. 

• People over process: Agile values the people involved in software development, and emphasizes communication and collaboration.
• Working software over documentation: Agile prioritizes delivering working software over extensive documentation.
• Customer collaboration over contract negotiation: Agile values close collaboration with customers and stakeholders throughout the development process.
• Responding to change over following a plan: Agile recognizes that change is inevitable, and encourages flexibility and adaptability.

The six phases in Agile are:

• Initiation: Define the project and assemble the team.
• Planning: Create a plan for how to achieve the project's goals.
• Development: Build the product or service in short sprints.
• Testing: Ensure the product or service meets requirements.
• Deployment: Release the product or service to the customer.
• Maintenance: Support the product or service with bug fixes, new features, and improvements.

Lindy Quick

Lindy Quick, SPCT, is a dynamic Transformation Architect and Senior Business Agility Consultant with a proven track record of success in driving agile transformations. With expertise in multiple agile frameworks, including SAFe, Scrum, and Kanban, Lindy has led impactful transformations across diverse industries such as manufacturing, defense, insurance/financial, and federal government. Lindy's exceptional communication, leadership, and problem-solving skills have earned her a reputation as a trusted advisor. Currently associated with KnowledgeHut and upGrad, Lindy fosters Lean-Agile principles and mindset through coaching, training, and successful execution of transformations. With a passion for effective value delivery, Lindy is a sought-after expert in the field.

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Transformation at ING (A): Agile

• Format: Print
• | Language: English
• | Pages: 19

About The Author

William R. Kerr

Related work.

• January 2018
• Faculty Research

Transformation at ING (B): Innovation

Transformation at ing (c): culture, transformation at ing (a), (b), & (c).

• October 2019
• Transformation at ING (B): Innovation  By: William R. Kerr, Federica Gabrieli and Emer Moloney
• Transformation at ING (C): Culture  By: William R. Kerr and Alexis Brownell
• Transformation at ING (A): Agile  By: William R. Kerr, Federica Gabrieli and Emer Moloney
• Transformation at ING (A), (B), & (C)  By: William R. Kerr and Jordan Bach-Lombardo
• Transformation at ING (A), (B), & (C)  By: William R. Kerr

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Agile Case Studies for Business Transformation

A few success stories highlighting our time bound, business context driven, framework agnostic agile transformation methodology.

Agile led business transformation case studies

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Featured Case Studies

Safe transformation case study for a leading healthcare company across india and us, organisational agility for a leading crypto exchange start-up in india, non it agile implementation case study in one of india’s largest fmcg company, business agility case study for a global leader in payment solutions, organisational agility case study for a leading it services firm, agile transformation case study at a major insurance firm by bringing inter-functions fluidity, agile implementation case study from waterfall to agile using safe as a scaling framework, agile transformation case study for a uk based proptech leader using safe, scaling agile led by spotify model case study for a leading product engineering & semiconductor firm, our clients.

Benzne has designed and implemented turnkey Agile transformation journeys across Fintech, Healthcare, Insurance, Semiconductors, SaaS, Non-IT, Proptech & various other IT product and services companies.

Overview of the Agile Consulting services offered

Benzne core focus is designing and implementing turnkey Agile transformation journeys. We have completed 15+ Transformation Journeys in the 4+ years of our journey as an Agile consulting company. We have worked on complete waterfall to agile transformations (Scrum & Kanban implementation) or scaling team, program, portfolio and organisational level agility using scaling frameworks like SAFe, Spotify, LeSS etc. Designed org wide agile coach the coaches programs or creating hands-on induction programs for new hires onboarding them to agile ways of working.

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Case Study: ING’s Digital Platform Tribe Goes Agile

Ing bank’s digital platform tribe goes agile.

ING Bank is a global financial institution with more than 52,000 employees and customers in over 40 countries. Adam Walendziewski is the Global SME/ MC Digital Platform Centre Director at ING Bank Slaski (part of ING Group) in Warsaw, Poland. He tells us how an agile approach has transformed his operation, in Poland and beyond.

Challenging times

‘As head of the 60-person digital platform tribe, I need to deliver excellent online banking solutions to our business customers. Our agile transformation was launched at ING’s Dutch head office in 2015. In 2016 we were in the middle of a very important project, and we were struggling. Progress wasn’t smooth, we sometimes felt we weren’t getting anywhere – which made us increasingly frustrated and in danger of compromising quality, without meeting our deadlines. It was clear that we needed a new approach. Something had to change! We had to find a better way to do things.’

The solution:

Building an agile mindset.

‘Fortunately for us,’ Adam continues, ‘some members of our team had already been exposed to agile ways of working, and encouraged us to look closely at moving over to an agile approach. We elected to work with the Scrum framework, and really quickly realised that it was the agile mindset that would offer us the greatest potential to transform our results.’

Co-location and communication

‘We were doing development work with an external vendor team and recognised that we would work much more effectively if there was closer collaboration across all the people involved. We decided to co-locate the team, bringing two separate organisational cultures together and aligning them behind the Scrum pillars: transparency, inspection and adaption. This wasn’t straightforward. We needed to revisit our contractual agreement to allow agile working, but we didn’t wait for this before making the change. We moved our people, started collaboration, and then allowed the paperwork to follow.’

We knew that getting the best results wasn’t simply a case of introducing an agile framework for working practices. We needed to build the agile mindset We knew that without a shared mindset, everything would collapse

Sharing “why and how”

‘Having put the team in one place, we started an educational programme so that everyone could understand the principles of an agile way of working. We knew that getting the best results wasn’t simply a case of introducing an agile framework for working practices. We needed to build the agile mindset. This was the hardest part. It’s a process that should never end, and we are now constantly looking for ways to improve.

‘We dedicated a lot of time to ensure that everyone understood why the transformation was taking place. People would only commit to working in a different way if they could see why a change was needed, and if they could visualise for themselves a future where delivery would be smoother and more beneficial for all concerned. We knew that without a shared mindset, everything would collapse. It was crucial to show team members and stakeholders why we were doing what we were doing.

‘It was an ambitious programme. We had just six staff leading a mindset change for a tribe of 60.’

Just doing it

‘We went from “idea” to “doing it” in just 45 days. That’s not saying it was fully implemented, but we allowed agile practices to evolve as we went along. We started to distribute good practices around the tribe and organise ourselves aroundScrum principles. We had a massive deadline pressure and knew that “just doing it”, combined with an “inspect and adapt” mentality would be the best way to meet our ambitious targets. We now maintain a continual focus on getting rid of barriers and obstacles to progress, and making the work of our experts easier. All of this requires a lot of trust, which is why mindset and culture change have to be tackled first in order to make agile transformation successful.’

The results:

Opening up potential and impact.

Communication and collaboration sit at the core of effective agile practices. For Adam, the most influential change that was made was to co-locate the teams. ‘From day one, communication was better,’ he confirms. ‘It’s powerful to have people sitting together. Instead of trying to articulate ideas on email or online platforms such as Jira, they were able to discuss how to approach challenges face-to-face. Team members need to have conversations, to bring together different perspectives and open up new lines of thinking. Getting everyone together in this way wasn’t straightforward, it needed room planning – so we could align our sprints across different tribes and squads.’

Agile philosophy is centred on a desire to delight the customer – not only fulfilling their needs, but going above and beyond to create enthusiasm and advocacy. ‘Before we started working in an agile way,’ Adam remembers, ‘we built completed solutions and then delivered them to the customer and discovered their response.

‘Now we get that vital feedback much earlier in the process. We create mock-ups and prototypes so that customers can try out new online banking pages for themselves. When we have their feedback, we base our onward development work around the customer’s perspective so that we are adapting our approach to real-time evidence of their needs.

‘We are constantly fixing and adapting our agile way of working. The big challenge is to not make silos within our squads or tribes.’

Measurable benefits

Adam is confident that not only do working practices now feel more efficient, but the metrics back this up. ‘Our Net Promoter Score (NPS) score for the ING Business Platform went from -30 to +30 within one year’ he confirms.

ING conducts an annual employee engagement survey called the Winning Performance Culture scan (WPC) in order to better understand the issues important to ING employees and to measure their state of mind. The WPC survey covers topics such as management quality, integrity, compliance, diversity, employee pride, brand perception and community investment. Adam is delighted with his team’s results. ‘Our employee engagement results from this survey are at 88% – really, really high!’

Agile is all about collaboration – both with the customer and across our teams

Looking to the future

Adam’s digital platform tribe was the first digital platform tribe in the SME/MC area in ING Bank Śląski to explore agile working. Encouraged by their success, ING Bank has rolled out an agile way of working in other SME/MC tribes.

By starting small in one area of the organisation, the bank built a foundation of applied agile experience, which is now enabling their wider transformation to move forward in a smoother way.

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7 Successful Agile Methodologies Cases in Big Companies

Agile methodologies are increasingly among the most talked about subjects when it comes to business management. Many organizations are changing their mindsets to focus on efficient development , expanding value delivery.

These cutting-edge methodologies help increase productivity within employees and create a cultural way of working. Although these giant companies have enormous amounts of revenues, they keep growing financially.

Even though Agile Methodologies made a huge impact on the development of their employees’ works, these companies had already customers awareness.

In this article, you will see 7 cases of big companies that implemented Agile Methodologies and got incredible results from using them.

7 Giant Companies that use Agile Methodologies

The agile methodology provided by Sony greatly supports establishing a modern software development and project management process. It works based on the Scrum approach in a project that has a highly complex project context and risks .

Sony looked for easy-to-understand software development and project management process that was lightweight.  It would help cultivate teamwork and would conduct a brief survey of potential consulting firms through the Internet search.

The introduction of Scrum led to the goal of having a defined project managemen t and development process. Sony’s teams achieved a high level of teamwork by collaborating with project partners.

The famous LEGO toy company started its agile approach starting with teams. 20 product teams were working across the organization at the start of the Agile implementation and it turned to 5 of them into self-organizing Scrum teams. Gradually the other teams were being progressively transformed as Scrum took effect.

Initially, although individual teams had become agile, they were still unable to cooperate effectively. LEGO followed the SAFe structure pattern and from there began to see results.

At LEGO, the team of teams met every 8 weeks for a big room planning session, which lasted a day and a half. The teams presented their work, worked out the dependencies, estimated the risks, and planned the next release period.

There is also the portfolio level, which is the top layer of the system. This is where you have long-term business plans, stakeholders, and senior management. This division into organizational levels is typical of the SAFe structure.

The agile implementation was placed in a Siemens Digital Factory with around 50 employees. The function of this plan is to develop software automation systems used by manufacturers all over the world.

The situation was ideal for agile methods because they were designed to meet the challenges the company was going through.

The results already appeared in the first review after just 2 weeks. Seeing empirical control of the process in practice gave everyone a morale boost.

These changes not only inspired behavior change but also began to nurture deeper attitudes and culture more suited to an iterative and incremental approach; cooperation, experimentation, trust, and responsibility.

The agile implementation at CISCO addressed a specific product: the Subscription Charging Platform.

The team held the Daily’s, a 15-minute meeting every start of the day to align progress and determine work items. With SAFe, they gained greater transparency.

Each team knew what the other teams were doing and the teams were able to manage themselves . These activities made the team promote accountability through updates and status awareness.

At Google, several sectors are betting on agile methods of software development, such as Scrum, creating and testing services and products. Each team chooses the technology and method that can best be applied to problem-solving.

One of the projects in which the Scrum methodology was used was in the development of  GoogleAdwords, for example.

Yahoo! has bet on reducing time spent developing software while managing team size.  And they were successful with Agile Methodology, especially using Scrum.

They plan, create, and test different products and services over a certain period of days, to improve and increasingly leverage the technology used by them and offered to the public.

This company operates in more than 120 countries in aerospace, semiconductors, power generation, and distribution, among others.

The Agile approach started in Japan, although the company knew that it would take time to adapt to Agile forms and integrate with other departments. At the company’s headquarters,  teams helped to continue the approach until it extended to other factories.

The Agile approach was made through workshops on an agile methodology that taught practices and approaches to the methodology, where employees were involved and were able to implement in each of the company’s departments.

How to start an agile culture in the company

• Don’t skip the simple things: Before adopting the methodology, you need to think about why you want it in your company. Being an agile company is not just about studying and relying on experts, but talking to executives who are already mature in this approach.
• Start with a pilot project: Launching pilot projects can help the company understand what real gains the chosen area has made. Thus, the organization can launch agile teams that will help, based on the success case, in the construction of an operating model that works remotely.
• Promote changes: mainly in the human aspects. Agile development is not about new reporting structures and post-its, but about having engaged people and technologies that enable them for dynamic modeling and quick decisions.
• Putting people above processes: Agile is a fundamental shift in culture and expectations. For employees, this journey needs to be transformative rather than disruptive. Remote work increases the need to double communication , support connections between humans, and provide practical support to people during this transition.

Agile methodologies allow continuous delivery of value

One of the main differentials that agile methodologies provide for companies that decide to adopt them is the continuous delivery of value.

Learning is one of the strengths of agile methodologies because, with continuous deliverables, any mistake is no longer a simple mistake and becomes something to add as an observation for the next deliverables, even in the project itself.

You save time and it is also possible to reduce production costs. Of course, all the scaling of resources is designed for the possibilities of change. Thus avoiding an emergency effort that could generate future expenses.

Not to mention that, in the case of a common delivery, there is a chance that the entire project will fail, which would mean a significant cost for the rework.

Agile companies become more prepared for the market

Companies that use them are more adaptable, and can better handle changes as needed. Digital transformation involves systems integration and other views of business management, among which stands out.

In addition, an agile company places the customer as the main focus for value delivery , inserting it more directly into the development chain.

Thus, it is possible to get to know them better and find out what they want. Also, you can adapt organizational processes, and offer more assertive services and products to the market.

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Business Transformation and 5 Case Studies of Real-World Success Stories

What is business transformation.

Business transformation refers to the process of fundamentally changing the way an organisation operates in order to achieve its strategic goals. This can involve a wide range of changes, such as adopting new business models, implementing new technologies, restructuring processes and operations, and redefining the organisation's overall strategy.

The goal of business transformation is to improve the organisation's performance and competitive advantage in the marketplace. This often requires a significant cultural shift within the organisation, as well as a willingness to embrace new ways of thinking and working. Successful business transformation can result in increased efficiency, better customer experience, and long-term growth for the organisation.

The Evolution of What is Business Transformation

Business transformation has been an important concept in management and strategy for several decades, evolving over time as businesses face new challenges and opportunities. In the past, business transformation primarily focused on process improvements and cost cutting measures to streamline operations and boost efficiency. However, as the business landscape has become increasingly complex and digital, the scope of business transformation has expanded to include broader strategic initiatives such as digital transformation, innovation, and customer-centricity. Today, business transformation is seen as a critical tool for organisations to adapt to change, stay competitive, and create value for stakeholders.

What are the Drivers of Business Transformation?

There are several drivers of business transformation, including:

Technology advancements

Technology is constantly evolving, and companies need to keep up with these advancements to remain competitive.

Customer demands

Changing customer expectations and preferences require companies to adapt their products, services, and processes to stay relevant.

Market forces

Globalisation, increased competition, and changing industry dynamics can drive companies to transform their business to remain competitive.

Regulatory requirements

Changes in laws and regulations can force companies to transform their business processes and operations.

Organisational culture

Companies that want to improve their performance, productivity, and innovation often need to transform their organisational culture.

Mergers and acquisitions

Mergers and acquisitions can trigger business transformation initiatives as companies integrate their operations and processes.

Cost reduction

Companies may undertake business transformation initiatives to reduce costs and increase efficiency.

Strategic goals

Companies may undertake business transformation initiatives to achieve strategic goals, such as expanding into new markets, launching new products, or diversifying their business.

These drivers can be interrelated and may require a coordinated effort to address effectively.

4 Phases of Business Transformation

There are four phases in the BTM² business transformation methodology lifecycle, which are:

Envision: Create a case for change, a sense of urgency, strategy, and vision.

Engage: Empower people to act on the vision and plan the business transformation.

Transform: Change processes, technology, behaviour, culture, and values.

Optimise: Internalise, institutionalise, and optimise transformation. And create stability.

9 Management Disciplines of Business Transformation

The BTM² business transformation methodology consists of nine transformation management disciplines which are:

Meta Management (Leadership, Culture, Values, Communication)

Strategy Management (Transformation Direction)

Value Management (Transformation Direction)

Risk Management (Transformation Direction)

Project and Programme Management (Transformation Enablement)

Business Process Management (Transformation Enablement)

IT Transformation Management (Transformation Enablement)

Organisational Change Management (Transformation Enablement)

Competence and Training Management (Transformation Enablement)

Learn more about these business transformation management disciplines.

4 Main Types of Business Transformation

Radical business transformation.

Radical transformation is a significant change to a company's strategy and approach, resulting in the creation of a new business model and vision. It often requires an overhaul of the organisation's core values and principles, as well as a significant shift in culture and mindset.

This type of transformation is often driven by external market factors or the need to pivot in response to changing industry trends. It requires a strong commitment from leadership and a willingness to take bold risks to ensure long-term success.

Architectural Business Transformation

Architectural transformation refers to the process of restructuring an organisation's technology infrastructure and systems while maintaining its core business processes. This involves a significant change in the underlying technology and infrastructure of the organisation but does not necessarily change the overall strategic goals or direction of the business. 

By focusing on optimising and modernising its technology architecture, an organisation can better support its operations and improve efficiency. This often involves updating legacy systems, implementing new software, and integrating new technologies to support business operations. A successful architectural transformation can help organisations stay competitive in today's rapidly evolving technological landscape.

Modular Business Transformation

Modular transformation refers to a scenario in which the organisation modifies some core elements of its design while keeping the overall enterprise architecture intact. This approach allows companies to implement targeted changes that address specific challenges without disrupting the entire system. For example, a company may choose to update its production line or supply chain processes while keeping its organisational structure and IT infrastructure intact. 

By using this strategy, organisations can achieve incremental improvements while minimising the risk and cost associated with a full-scale transformation. This approach can help organisations remain agile and adapt to changing market conditions more efficiently.

Incremental Business Transformation

Incremental transformation involves making small, continuous improvements to the enterprise design with minimal changes to technology and operations. This approach allows the organisation to refine and extend its existing processes and capabilities, while minimising disruptions to daily operations. Incremental transformation often involves a gradual and continuous improvement process that allows the organisation to stay competitive 

by adapting to changing market conditions and customer needs. It requires a focus on continuous improvement and a willingness to adopt new technologies and processes as needed to drive long-term success.

What is Impacted During Business Transformation?

There are several aspects of an organisation that are impacted by business transformation, including:

Involves a change in the company's strategy, vision, and direction to respond to new market trends or opportunities.

Focuses on improving operational efficiency, reducing costs, and optimising business processes to improve performance and profitability.

Involves changing the organisation's culture, values, and behaviours to foster innovation, collaboration, and customer-centricity.

Involves changing the organisation's structure, such as reorganising teams, creating new roles, or consolidating business units, to improve agility and decision-making.

Involves leveraging digital technologies to fundamentally change the way a company operates, interacts with customers, and delivers value to the market.

Other aspects of an organisation are impacted by business transformation. The key is to identify and manage these impacts in a way that does not compromise the achievement of the transformation goals.

What is The Difference Between Business Transformation and Digital Transformation?

While business transformation and digital transformation are related concepts, they have different scopes and objectives.

Business transformation refers to the process of fundamentally changing the way an organisation operates to achieve its strategic goals, which may or may not involve technology. Business transformation may include a wide range of changes such as organisational restructuring, changes to business processes, new business models, and strategic realignment.

Digital transformation, on the other hand, specifically refers to the integration of digital technology into all areas of a business, resulting in fundamental changes to how the business operates and delivers value to customers. The goal of digital transformation is to create a more agile, responsive, and data-driven organisation that can compete in a rapidly changing digital environment. This may involve adopting new technologies, leveraging data and analytics, and creating new digital products and services.

In summary, while both business transformation and digital transformation involve significant changes to an organisation, the former is broader and may involve non-digital changes, while the latter specifically focuses on the integration of digital technology to drive business success.

What Should a Chairman Know About Business Transformation?

As a key member of a company's leadership team, a Chairman plays a critical role in the success of any business transformation effort. Here are some key things that a Chairman should know about business transformation:

The importance of having a clear vision and strategy: Business transformation requires a clear vision of where the company is going and a well-defined strategy for getting there. The Chairman must ensure that the vision and strategy are aligned with the company's goals and objectives.

The need for effective change management: Business transformation often involves significant changes to the company's processes, systems, and culture. The Chairman must ensure that change is managed effectively, with clear communication to all stakeholders, and a plan for addressing any resistance to change.

The importance of collaboration: Business transformation is a team effort, requiring collaboration across departments and functions. The Chairman must ensure that there is a culture of collaboration and that the necessary resources are made available to support the effort.

The role of technology: Business transformation often involves the use of new technologies to improve business processes and drive innovation. The Chairman must ensure that the company has the necessary technology infrastructure and expertise to support the transformation effort.

The need for ongoing evaluation and adjustment: Business transformation is an ongoing process that requires ongoing evaluation and adjustment. The Chairman must ensure that there are metrics in place to measure progress, and that the company is willing to adjust as needed to stay on track.

In summary, a Chairman plays a critical role in ensuring the success of any business transformation effort. By focusing on clear vision and strategy, effective change management, collaboration, technology, and ongoing evaluation and adjustment, the Chairman can help lead the company through a successful transformation.

What Should a CEO Know About Business Transformation?

CEOs play a critical role in driving successful business transformations. Here are some key things that CEOs need to keep in mind:

Vision: The CEO must have a clear and compelling vision for the transformation that is aligned with the company's overall strategy and goals.

Culture: The CEO needs to drive a culture of innovation and agility that supports the transformation. This may involve shifting the organisation's mindset and embracing new ways of working.

Communication: The CEO must communicate the transformation strategy clearly and frequently to all stakeholders, including employees, customers, and investors.

Talent: The CEO needs to ensure that the organisation has the right talent and capabilities to execute the transformation. This may involve hiring new talent or upskilling existing employees.

Metrics: The CEO must establish clear metrics and key performance indicators (KPIs) to measure the success of the transformation and ensure that progress is being made.

Governance: The CEO must establish a governance framework to manage the transformation and ensure that it stays on track.

Collaboration: The CEO needs to collaborate with other leaders and stakeholders to ensure that the transformation is aligned with their goals and priorities.

By keeping these factors in mind, CEOs can successfully lead their organisations through a business transformation, achieve their strategic objectives, and drive long-term success.

What Should Other Key Executives Know About Business Transformation?

Business transformation is not just limited to CEOs, but other C-level executives also need to be aware of it as it can affect various aspects of the business. Here are some things that other C-level executives should know about business transformation:

Understanding the goals: All executives should have a clear understanding of the goals and objectives of the business transformation. This will help them to align their departments and work towards achieving the transformation goals.

Collaboration: Business transformation involves cross-functional collaboration and coordination, which means executives need to work together and leverage each other's expertise to achieve the desired outcomes.

Change management: Business transformation requires significant changes in the organisation, which can be difficult for employees. C-level executives should be aware of the change management process and ensure that employees are adequately supported during the transition.

Innovation: Business transformation is often driven by innovation, and C-level executives should be open to new ideas and technologies that can enable the transformation.

Customer-centricity: Business transformation is not just about internal changes but also about meeting the changing needs of customers. C-level executives should prioritise customer-centricity in their decision-making to drive successful transformation.

Who Should Lead Business Transformation on a Day to Day Basis?

The person who leads business transformation on a day-to-day basis is typically a program or project manager, who is responsible for managing the various initiatives and activities involved in the transformation process. The program or project manager is usually a seasoned professional with expertise in project and change management, as well as experience in the specific areas of the business being transformed. This individual works closely with executive leadership, stakeholders, and other key personnel to ensure that the transformation process is on track and aligned with the organisation's overall strategic goals. They are also responsible for monitoring progress, identifying, and mitigating risks, and adjusting the transformation plan as needed.

How do You Manage Business Transformation?

Managing business transformation involves leading the implementation process, ensuring that all stakeholders are aligned and working towards the same objectives, and making necessary adjustments as the transformation progresses. The following are some key steps to effectively manage business transformation:

Develop a clear vision and strategy: A clear and concise vision for the transformation and a well-defined strategy for achieving that vision is essential. It should be communicated to all stakeholders to ensure everyone is aligned.

Establish a governance structure: A governance structure is important to provide oversight and decision-making authority during the transformation. This should include a steering committee, a project management office (PMO), and other necessary teams.

Define key performance indicators (KPIs): KPIs should be defined to measure the success of the transformation. These should be regularly tracked and communicated to stakeholders.

Engage and empower employees: Employees should be engaged in the transformation process from the beginning. They should be empowered to take ownership of the changes and help drive the transformation forward.

Manage risks: It is important to identify potential risks to the transformation and develop mitigation plans. These plans should be regularly reviewed and updated as needed.

Monitor progress: The transformation process should be regularly monitored to ensure that it is progressing according to plan. Adjustments should be made as necessary to keep the transformation on track.

Celebrate successes: Celebrating successes along the way can help maintain momentum and keep stakeholders motivated and engaged.

By effectively managing business transformation, organisations can successfully navigate change and achieve their goals for growth and innovation.

What is The Business Transformation Management Methodology?

The Business Transformation Management Methodology (BTM²) is a comprehensive framework for managing and delivering large-scale business transformations. It was developed by a think tank of xxx and funded by the SAP company.

BTM² is widely used in by many of the world's best business transformation managers, leaders, and consultants.

The methodology is based on a four-phase approach that includes four phases and nine management disciplines.

Each phase includes a set of activities and deliverables, such as assessing the current state of the business, defining the target state, developing a roadmap, executing the transformation plan, and monitoring and measuring the results. The BTM² methodology emphasises the importance of involving stakeholders, managing change, and ensuring the alignment of business and IT objectives.

Best Practices for Successful Business Transformation

In addition to adopting a business transformation management framework such as BTM² here are some general best practices for a successful business transformation:

Develop a clear vision

Start with a clear and well-defined vision of what you want to achieve through the transformation. This will help you stay focused and aligned throughout the process.

Involve stakeholders

Engage and involve all relevant stakeholders in the transformation process, including employees, customers, partners, and suppliers. This will help you get buy-in and support, as well as gather valuable input and feedback.

Develop a comprehensive plan

Create a detailed plan that outlines the goals, timelines, resources, and activities required for the transformation. This plan should also identify potential risks and mitigation strategies.

Prioritise and sequence initiatives

Prioritise and sequence initiatives based on their potential impact and feasibility. This will help you focus on high-impact initiatives that can deliver quick wins, while also ensuring a smooth and phased transition.

Invest in change management

Develop a robust change management program that focuses on communication, training, and employee engagement. This will help you manage resistance, build awareness, and create a culture that is open to change.

Leverage data and analytics

Use data and analytics to gain insights into the performance of your organisation and identify areas that require improvement. This will help you make data-driven decisions and measure the impact of your transformation initiatives.

Embrace innovation

Foster a culture of innovation and experimentation and encourage employees to come up with new ideas and approaches. This will help you stay ahead of the curve and continuously improve your business.

Monitor and measure progress

Monitor and measure the progress of your transformation initiatives, and adjust your plans and strategies as needed. This will help you stay on track and ensure that you are achieving your goals.

Overall, successful business transformation requires a strategic and holistic approach that engages stakeholders, prioritises initiatives, invests in change management, leverages data and analytics, fosters innovation, and continuously monitors and measures progress.

5 Business Transformation Case Studies

Lego business transformation.

In the early 2000s, the Danish toy manufacturer was facing serious financial difficulties due to declining sales and changing consumer preferences. The company was on the verge of bankruptcy, but instead of giving up, Lego embarked on a major business transformation initiative. The company restructured its operations, divested non-core businesses, streamlined its supply chain, and refocused its product lines.

One key element of the transformation was the introduction of the Lego Movie, which helped reinvigorate the brand and drive sales. Today, Lego is a thriving company with a strong global brand and a diverse range of product lines. The success of Lego's business transformation is a testament to the power of strategic planning, innovation, and a willingness to embrace change.

Ford Business Transformation

In recent years, the Ford motor company has been facing challenges from new players in the automotive industry, as well as rising customer demands for new features and technologies.

Business Transformation Initiative: In 2018, Ford announced a major business transformation initiative aimed at modernising its operations and transitioning to become a mobility company. The initiative involved several key components, including:

Reorganising the company's global business operations to streamline decision-making and improve efficiency.

Investing heavily in electric and autonomous vehicle technology, with plans to introduce a range of new EV models in the coming years.

Partnering with tech companies to develop new mobility solutions, such as ride-sharing services and delivery fleets.

Focusing on improving customer experience, with a renewed emphasis on digital channels and personalised services.

While the full impact of Ford's business transformation initiative has yet to be realised, the company has already made significant progress in several key areas. For example, Ford has launched several new electric and hybrid models, including the Mustang Mach-E and the F-150 Lightning, which have been well-received by customers and critics alike. The company has also partnered with tech companies like Argo AI and Rivian to accelerate the development of autonomous vehicle technology. 

Ford also invested in a range of new mobility solutions, such as its GoRide health transportation service and the delivery-focused Ford Pro division. Overall, Ford's business transformation initiative has positioned the company to better compete in a rapidly evolving automotive industry and to meet the changing needs of its customers.

General Electric

General Electric (GE) is a massive conglomerate with diverse business units spanning multiple industries. In recent years, the company has undergone a significant business transformation to streamline its operations and refocus on its core strengths. The transformation involved divesting non-core businesses and reducing the size of the organisation, among other initiatives. As a result of these efforts, GE has become a leaner, more efficient company with improved profitability. The business transformation has allowed GE to focus on its core strengths and position the company for long-term success.

In 2019, PepsiCo announced a new business transformation initiative to become a more consumer-centric, faster, and more agile organisation. The main goals of the business transformation initiative were to increase productivity, accelerate growth, and create a more sustainable business model. To achieve this, PepsiCo aimed to streamline its operations, enhance its digital capabilities , and invest in new product development and marketing.

To drive the business transformation, PepsiCo implemented a range of initiatives, including:

• Investing in automation and digitalisation to streamline operations and increase efficiency.
• Enhancing its e-commerce capabilities and online presence to better engage with consumers and improve customer experience.
• Expanding its product portfolio to include more healthy and sustainable products, in response to changing consumer preferences.
• Improving its supply chain and logistics operations to increase speed and flexibility.

As a result of the business transformation, PepsiCo was able to increase productivity and reduce costs, while also expanding its market share and improving its sustainability credentials. For example, in 2020, the company reported an increase in revenue and net income, driven by strong performance in its snacks and beverage businesses, as well as its focus on innovation and sustainability. PepsiCo was also recognised as one of the most ethical companies in the world by the Ethisphere Institute in 2021, reflecting its commitment to social responsibility and sustainability.

The global financial group BBVA has undergone a significant business transformation in recent years. The transformation was initiated with the goal of becoming a more customer-centric, agile, and innovative organisation. To achieve this transformation, BBVA adopted a new organisational model, which included the creation of cross-functional teams, the implementation of agile methodologies, and the adoption of new technologies such as cloud computing, big data, and artificial intelligence. BBVA also introduced new digital products and services, such as a mobile banking app and a digital wallet, to improve the customer experience.

The transformation has resulted in significant improvements for BBVA. The bank has seen an increase in customer satisfaction and loyalty, as well as improved employee engagement. The bank has also been recognised for its innovative approach, winning awards for its mobile banking app and other digital initiatives.

BBVA's business transformation demonstrates the importance of embracing new technologies, adopting an agile mindset, and putting the customer at the center of the organisation.

Do We Need a Consulting Firm to Help With Business Transformation?

The decision to hire a big consulting firm or an independent consultant for business transformation ultimately depends on your organisation's specific needs, budget, and resources.

Big consulting firms often have a wealth of resources and expertise, with large teams that can tackle complex projects and a wide range of experience across various industries. However, their services can come at a premium cost and may not be feasible for smaller organisations.

Independent consultants, on the other hand, typically offer a more personalised and customised approach, with more affordable rates and the ability to provide more direct access to senior-level expertise. They may also have a more flexible approach to project management and can often be more adaptable to changes and unexpected challenges.

Business transformation consultants employed by big firms will typically put their own firm's interests ahead of yours, whereas an independent consultant isn't burdened by a boss, which means they can always act in your best interests rather than those of their employer.

Ultimately, the choice of whether to hire a big consulting firm or an independent consultant should be based on a careful evaluation of your organisation's needs, resources, and budget, as well as a review of the consultant's relevant experience and track record of success.

Business Transformation Management Course

If you want to equip yourself with the expertise required to orchestrate business transformation the BTM² Business Transformation Management course will help you.

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Strategy-Focused Agile Transformation: A Case Study

Helen sharp.

8 The Open University, Milton Keynes, MK7 6AA UK

Katie Taylor

9 University Central Lancashire, Preston, UK

Strategic agility enables an organisation to sense and seize opportunities, manage uncertainty and adapt to changes. This paper presents one case study of a traditional charitable organisation taking a strategy-focused approach to agile transformation. Interview data was collected over a 13-month period through interviews at different stages and with different members of the transformation team and Heads of Department. This case study illustrates the challenges faced in such a transformation, and shows that strategic agility requires different time horizons to co-exist: a future vision, a medium term set of objectives and a short term performance monitoring perspective.

Introduction

The implementation of agility outside IT departments and across organisations, often referred to as enterprise agility, is growing in popularity, and is a significant challenge [ 4 ]. This is partly driven by the tensions that can arise when agile IT teams interact with non-agile departments in different parts of the organisation [ 6 ], and partly by the increasing need for organisations to be responsive to change [ 7 ]. Research in the managerial field refers to flexibility rather than agility, and although the similarities and differences are disputed, literature on flexibility provides a useful viewpoint for analysing enterprise agility. For example, Toni and Tonchia [ 13 ] identify four complementary dimensions of flexibility: economic, operational, organisational and strategic. The economic dimension has been addressed in conjunction with theories for management of financial buffers against demand uncertainties or external market shocks. The operational dimension deals with aspects of manufacturing system flexibility, e.g. ability to adapt the manufacturing system to different environmental conditions and a variety of product features. Agile software development literature [ 8 ] captures especially operational aspects related to software component development, e.g. management of rapidly changing business requirements and iterative delivery practices. The organisational dimension deals with models of organisation and labour flexibility in rapidly changing environments [ 13 ].

The strategic dimension may be viewed through culture [ 10 ], leadership [ 5 ] and dynamic capabilities [ 12 ] that enable an organisation to sense and seize opportunities, manage deep business uncertainty and adapt to changes in the business environment. From a strategic management perspective [ 12 ], strategy is not just a plan but a means to achieve agility through implementation of those plans, hence organisations achieve agility by forming an appropriate strategy and embedding the strategy vision, values, and goals at the operational level across the organisation.

Agile transformation of this kind is referred to using different names, including business agility and enterprise agility [ 6 ], but although process guidance for transformation can be found [ 1 ], empirical studies are lacking [ 3 ]. In particular, there is a lack of evidence illustrating how organisations transform to agility through a strategy focus, and the issues they encounter during this type of transformation. To address this, we conducted a 13-month case study during 2017 and 2018, to answer the research question: What issues arise within organisations focusing on strategic agility? This paper reports the findings of a case study [ 11 ], investigating a charitable organisation transforming to agility through a focus on strategic agility .

Case Background

“What is the role of a Victorian patriarchal provider of services for  < disabled >  people in an age where funding streams, public expectations, customer expectations, deem that we’re actually no longer relevant, fundamentally all of our lead indicators for the business are really unhealthy. Need to fundamentally transform and that makes it really big.” Change manager (member of transformation team).

Our case organisation is a traditional charity for disabled people. It was originally two separate organisations with different foci, but over time each took on a wider range of activities and the merged organisation had hundreds of different services and products. As a result they were carrying a lot of cost and their purpose had become confused, both for staff and for customers. Also, their services were not used by the majority of potential customers. Before the transformation reported here, the charity’s strategy set an aspiration to reach more potential customers but it wasn’t designed to deliver the required step change. To address this, a change programme was initiated but it failed to get sufficient senior management sponsorship, and so the programme started as skunk works (a small group of people with autonomy to work on a “secret” project), led by the change management group, with no widespread communication and engaging only with those who had an appetite for change. This was to deliver a change programme for a new agile strategy that focused on a small number of activities. Hence, the change programme encompassed both organisational change and significant strategy change. The change manager, our gatekeeper, was keen to draw on previous Agile Transformation experiences and had self-trained in agile approaches and principles.

Prior to our involvement, an assessment of group culture and a re-structuring of the organisation had taken place. In particular there was an urgent need to improve the financial health of the organisation, and to embed the “lived experience” of disabled people into the organisation, by involving the community more. In April 2017, the organisation was restructured to remove duplicate functions, which resulted in the loss of senior management posts. From July 2017 a series of papers was put to the Board of Trustees setting out the development of a new strategy and delivery plan. Through these papers and ongoing work of the change management group, a new strategy evolved from then until its launch in late 2018.

Strategy development began with identifying an overarching vision and a set of ambitious goals. These were iterated through a group of 10–12 people invited to take part, from a range of different grades, departments, and physical locations around the country. The initial goals and objectives were tested with customer and internal staff stakeholders, and strategy drafts were regularly presented to the Board of Trustees.

Task and finish (T&F) groups were set up to drive the business plan forward. This included a subset of “Heads of Department”. Their remit included making sure that others in their department were kept informed of developments. The strategy development process aimed to produce a five-year and a three-year strategy, and a one-year plan. In the end, a five-year strategy, and a one year plan were delivered to the Board of Trustees, and the three-year plan was used as a basis for ongoing improvement.

We engaged with this case study from July 2017 to August 2018. The overall approach was to understand the transformation from the participants’ point of view rather than to impose any a priori expectations or analytical frameworks [ 9 ]. The initial meeting in July 2017 set the scene and agreed subsequent meetings. In Oct 2017 a workshop with the transformation team was held to explore agility and contextual matters including how to assess performance in an agile setting. Short catch-up phone calls (10–20 min) took place in Nov and Dec 2017, and longer interviews and discussions with members of the team (1–2 h) took place in January 2018 and March 2018. During these engagements, the team explained progress and shared their reflections. This data was used to construct a narrative of the transformation from the teams’ point of view.

In July 2018 we conducted semi-structured interviews with 9 Heads of Department about the transformation process to identify challenges, successes and next steps. These included Heads of Community Involvement, Customer Service, HR, Finance and Relationship Development. Our interviewees had been with the organisation for between 1 year and 17.5 years, and many were goal owners for the final strategy; none had received formal agile training. In August 2018 we conducted the same semi-structured interview with the Head of Transformation.

Throughout this time, researchers also had access to several documents and versions of the strategy including the one issued to staff in Sept 2018. This included a set of values and behaviours expected from staff and to be used as a guide for recruitment.

All interactive sessions were audio recorded and transcribed, or detailed notes were taken contemporaneously. The documentation, and some aspects of the audio recordings were used to construct the case background above. The views of the journey, including successes and challenges were analysed thematically [ 2 ].

We present the results from two perspectives: one focusing on the transformation team and the other focusing on the Department Heads. These two are compared in Sect.  5 .

Transformation from Inside the Agile Transformation Team 1

The main engagements with the transformation team were in Oct 2017, and in January, March and August 2018. During Oct 2017 , four related issues were discussed:

• What is agility, and what is it not? Issues included the need for accountability, discipline, empowerment, customer focus, and responsiveness. Common misconceptions about agile that staff in the organisation may have were identified, including that agile isn’t chaotic or process-obsessed. A longer list of issues were identified for discussion later, including business readiness, appraisal of team and individuals, agile behaviours and consensus.
• Performance management in an agile environment . For someone to be accountable, performance needs to be measured, but agile focuses on the team rather than the individual so how can performance of an individual rather than the team be measured?
• Agile strategy . The strategy needs to be responsive to the environment and hence updated regularly. Discussion included the idea of a three-year rolling plan, and questions such as “where do I start?”, “what’s sprint 1?”, how to keep momentum going – not to just run workshops, get a brilliant “buzz” and then stall. An evidence base for challenging ideas and providing rapid feedback was needed.
• Sustainability of agile . Agile behaviours and performance management were framed in terms of sustainability “ We can do agile planning, but agile sustainability comes down to what people are motivated to do…and how they are motivated to behave ”.

By January 2018 , there was a sense in the transformation team that the process around the strategy needed to support its continuous improvement, and therefore should be agile. Although the original focus was on an agile strategy, they realised that “ Agile strategy has to be a process ”. The organisation had identified a long term vision, and developed a business plan with four priorities and eight cross-cutting objectives. The next step was to change the portfolio management process to adapt to having three-year rolling plans that move towards that long term goal, through three-month cycles to check progress “ is this the right stuff? Yes, move on; no, stop it or cut it ”. This will involve test-learn cycles. “ That’s your agile strategy, it’s your tactical 1 - 3 year business plan moving towards big significant goals, that get refined ”. Creating those business plans was underway, and a template for the business plan for each department had been developed. The culture change that was needed was planned to be driven through the new branding process, which was expected to launch towards the end of the year.

In March 2018 (about half way through the transformation process), accountability continued to be a big issue, along with the need to identify and acquire appropriate data for performance management. Difficulties arose from senior managers concerned that they would be accountable for things outside their direct budgetary control. Some people associated accountability with blame, and were concerned about consequences if the objective failed. Although they were still not very agile, the changes so far highlighted the “ massive culture change required ”… “ fundamentally we are not currently built to deliver those goals ”. Instead of focusing on changing the culture, the terminology had changed to look at values and behaviours.

Fixed hierarchical structures and fixed timeframes were causing problems, and there was little appreciation that the plan had to drive activities. In the past, the plan was delivered through line management and the budget, and these are structured in silos. In a fixed governance structure it’s hard to explain the dynamic nature of the process.

A new operational model was being developed to offer more activities online. Staff and customers had been consulted about the plan and organisational changes; the goals and objectives had also been tested with customers and staff, including potential customers who had not engaged with the organisation before.

People were still working in silos creating their own plans, not talking across departments, and without reference to the overall goals – if it’s not in the strategy then “ you really shouldn’t be doing it…this isn’t about empowerment but discipline”. Overall, the team felt “ it’s moving us in the right direction ” but “ we just assumed way too much ” and “ < the process >  gently exposed some of the undercurrents of the organisation ”.

Highlights from the Head of Transformation’s interview in August 2018 include:

“ the approach we’re moving towards is absolutely right – right for  < the organisation >  specifically but actually generically right for an awful lot of organisations ”… “ the change we’re seeing in our external customer environments is just not gonna stop ”

However, he also identified several challenges including

• Senior stakeholders may have buy-in to the process, but they also need to go through a personal change as well as a fundamental organisational transformation “ we didn’t appreciate the depth of mindset change basically that it would need .”
• They needed more stability in terms of leadership
• Agility needs a collaborative way of working, which is counter to a hierarchical organisation with silos. “ half the senior management didn’t know what other functions did ” “ A key thing is just understanding what everyone does ”.
• Communicating the approach outside the managers involved was limited.
• Difficulty in communicating what accountability means – “ you may not be in control of all the direct levers for an outcome but you are in control of relationships with the people who can pull those levers ”
• Need a real-time (as close as possible) operational dashboard

Two main areas for improvement for the next cycle in the agile process are to:

• Be a bit more creative, e.g. using design thinking, so that people engage in real business change “ we need to focus a lot more on enabling the business change…and probably a bit less on the process itself ”
• Get new senior people up to speed quickly, or find a way to retain senior people. Constant change of personnel created instability.

In his view, strategic agility requires different perspectives to co-exist: a future vision that sets an aspiration, a medium term horizon: “We now have the purpose statement and the priorities, and we have business plans, but we need to tackle the really important medium - term strategic goals.” , and a short term horizon: “our major Achilles heel across the whole charity is data … our new performance dashboard is a lot better … we’re nowhere near being able to report the real - time heartbeat type metrics that we really need to understand how the business is performing day - by - day”

Transformation from the Heads of Department Perspectives

The interviews with the Heads of Department were analysed for themes according to successes, challenges, what could have been done better in the transformation, and next steps. Table  1 summarises the themes emerging from this analysis. Note that the quotes do not represent the full data set; where cells are empty, no interviewee identified anything in that category, e.g. no-one suggested that aspects of Organisational Structure could have been Done Better.

Table 1.

Themes from Heads of Department interviews, with illustrative quotes

Reading Table  1 left to right provides an overview of the theme and how it plays out across the transformation activities. For example (quotes come from different interviewees, so sentences do not represent any one person’s view):

Level of Organisational Change:

There was no mention of success in this theme. A past challenge was the high degree of organisational change, and a future challenge will be change fatigue. What could be done better is to achieve more stability as everything’s been changing, and next steps are to get the changes embedded.

External Profile:

A success was the response to external events. A past challenge was that reputation had been declining, and a future challenge will be to make sure people know what we stand for; next steps are to launch as a listening organisation.

The meaning of accountability was a concern for the transformation team throughout the process. It was mentioned in every engagement we had with the transformation team, but hardly mentioned at all in the Heads of Department interviews. Other issues raised by the transformation team were recognised by the Heads, but not all the issues raised by the Heads were recognised by the team.

There was a strong support for the progress that had been made up to the new strategy’s launch – not just the strategy itself, but also its vision and goals. Other successes related to the organisation’s structure, a change in culture and mindset, and the turnaround of the financial situation.

There were several past challenges, but fewer future challenges. Those that were identified relate to keeping staff engaged and energised in the continuing transformation process, succession planning for strategic development, getting the right data available to performance management, aligning the Departments and the strategic goals, and communicating the right external profile.

Areas for improvement in terms of the transformation process were maintaining more stability in the organisation, finding a better way to update finances, being clear and transparent in communications and expectations, and being more creative in how the process unfolds. The next steps identified were in response to the issues raised above, and included embedding changes, articulating clearly the organisation’s goals externally, and energising everyone to take the changes forward.

“I thought we’d embarked on achieving a destination, but actually what we embarked on was a really long journey” Head of Transformation.

Strategic agility requires three different horizons to co-exist: a long term aspiration, a medium term set of goals, and a short-term response to real-time performance management. The experience of this case study shows that introducing this approach to a traditional, hierarchical organisation requires a number of conditions including: sufficient resources, stable leadership, and suitable performance measurement data.

Although not driven by IT or encompassing traditional Agile frameworks, this case study contributes empirical results to the growing set of transformation studies within the XP community. Future plans in this research include to engage with other organisations using a strategic approach to their transformation, and to compare these findings with organisations who take a different approach to transformation.

Acknowledgements

We thank our participants for taking part, the Agile Business Consortium for funding this work, and our colleagues in the Agile Research Network for their time and support.

1 All quotes in this sub-section are from a member of the transformation team (one of 3 people).

Contributor Information

Maria Paasivaara, Email: kd.uti@aapm .

Philippe Kruchten, Email: ac.cbu.ece@kbp .

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How Lufthansa Shapes Data-Driven Transformation Leaders

The airline created a program to educate leaders all across the organization and turn a sky filled with data into accelerated change.

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Carolyn Geason-Beissel/MIT SMR | Getty Images

Up in the air, a modern plane generates 1 terabyte of data every 24 hours of flight. For airlines like the Lufthansa Group, this data can be used to create valuable business outcomes, from improved operational efficiency to higher customer satisfaction. On top of this rich data set, Lufthansa has invested substantially in deploying artificial intelligence technologies, improving data quality processes, and hiring data engineers and data scientists. However, in 2023, it recognized that it had to do more to become a truly data-driven company. The industry incumbent faced not a mechanical problem but a human one: Organizational resistance to change stood in the way of transformational efforts. Lufthansa’s data experts felt like they were operating as lone wolves, without the business support and use cases that would get the whole company behind its transformation goals.

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In its quest to beat these challenges and speed transformation, Lufthansa recognized that a crucial ingredient had been overlooked: the leadership circle. Leaders can not only motivate and inspire but also coach their employees to drive exciting data and AI use cases and turn their own business units into front-runners of data-driven change. However, internal analysis confirmed that there was a huge shortage of data and AI literacy among Lufthansa’s leadership ranks, from the C-suite to team leaders. Lufthansa felt that turning its leaders into data leaders would be a key success factor for the whole organization.

So Lufthansa created a data leadership program, and along the way, its team learned valuable insights about the roles that people could play in data-driven change. The company’s approach has lessons for other organizations facing the same need.

Data Leadership Is Not Just for Tech Leaders

What is data leadership? At Lufthansa, it means accompanying and supporting one’s team to achieve data-driven transformation together. Lufthansa knew that its future data leaders would not just be tech leads, like chief data officers (CDOs), who drive the implementation of data and AI use cases and corresponding policies, standards, and programs. Especially in data-driven digital transformations, business leaders need to take an active role. 1

To operationalize the concept, Lufthansa defined six different roles for effective data leaders (see “Data Leadership: Six Key Roles”) and shaped a corresponding data leadership development program to bring those roles to life.

About the Authors

Christian Haude is senior data strategy and innovation manager at Lufthansa Group. Ivo Blohm is associate professor for information systems and business analytics at the Institute of Information Systems and Digital Business at the University of St. Gallen in Switzerland. Xavier Lagardère is managing director of the Lufthansa Innovation Hub and head of data and innovation at Lufthansa Group.

1. T.H. Davenport and J. Foutty, “ AI-Driven Leadership ,” MIT Sloan Management Review, Aug. 10, 2018, https://sloanreview.mit.edu; and T.H. Davenport, N. Mittal, and I. Saif, “ What Separates Analytical Leaders From Laggards? ” MIT Sloan Management Review, Feb. 3, 2020, https://sloanreview.mit.edu.

2. E.A. Teracino, “ Data and Analytics as a Key Business Capability in Focus at the 2nd Annual Chief Data Officer and Information Quality (CDOIQ) European Symposium ,” CDO Magazine, Sept. 18, 2023, www.cdomagazine.tech.

3. G. Vial, J. Jiang, T. Giannelia, et al., “ The Data Problem Stalling AI ,” MIT Sloan Management Review 62, no. 2 (winter 2021): 47-53.

4. “ Successful Experiment to Detect Hand Luggage Using Computer Vision ,” Lufthansa Group, accessed March 28, 2024, https://innovation-runway.lufthansagroup.com.

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Three in four businesses failing to manage talent mobility effectively, as demand for international work experience soars

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Related topics

• EY survey shows 75% of employers do not have fully developed mobility functions vital for meeting modern business and talent demands. 
• Companies could be neglecting a crucial opportunity to retain key talent – 64% say international assignments would encourage them to consider staying in current job.
• 71% of firms say mobility risks and scope have increased over past two years, but many don’t have policies in place to manage them.

Companies around the world could be at risk of losing out in the race for talent and driving business resilience because they are failing to mobilize their workforce effectively and create opportunities for flexible work experiences, according to the EY 2024 Mobility Reimagined Survey .

The survey canvassed the views of 1,059 mobility professionals across 21 countries on the benefits and challenges organizations can face when developing and building mobility strategies and functions.

It found that only one in four employers surveyed (25%) have a fully developed mobility function, with three-quarters (75%) failing to take advantage of a truly mobile and agile workforce.

Mobility strategy now central to talent attraction and retention

This is despite the fact that almost two-thirds (64%) of employee respondents around the world say they’re more likely to stay with their current employer after a long-term cross-border assignment, while (92%) believe such experiences can be “life-changing” and 89% say international mobility is essential for business continuity and resilience, edging up from 74% last year.

Gerard Osei-Bonsu , EY Global People Advisory Services Tax Leader, says:

“From economic volatility and geopolitical crises to talent shortages and rapidly changing employee demands, companies are having to navigate an unprecedented number of complex challenges.

“If organizations want to survive and thrive in this new working environment, they need to attract and retain top talent. Having an effective international mobility function and program in place is critical to creating a dynamic and empowered workforce.”

Organizations ill-prepared to deal with cross-border risks

Despite the significant benefits that mobility programs bring to companies, many are facing a growing number of risks and challenges when establishing international mobility functions.  Seven in ten respondents (71%) say cross-border mobility risks – including tax/regulatory and data privacy risks – have increased over the last two years, mostly due to the pandemic and ongoing geopolitical and economic challenges, which saw employees move around the world and work in separate jurisdictions, heightening corporate exposure to tax, regulatory issues and diverse employment laws.

Worryingly, many organizations are not fully prepared to manage all the risks they face. For example, while 84% of employer respondents recognize data privacy risks from hybrid mobility arrangements, just 55% have policies in place to mitigate them — a moderate improvement from last year’s 47%. Similarly, although 87% of employer respondents are aware of cybersecurity risks, just 46% have policies to address them – down from 51% last year.

In addition, 46% of companies responding use a centralized mobility operating model, which is often siloed from the rest of the business, creating a raft of communication, collaboration, and technology-related challenges.

Successful organizations accelerate mobility with five key drivers

Nevertheless, many companies are taking action where it is needed. More than eight in 10 employer respondents (82%) have developed a policy or approach for hybrid mobility, up from 76% in 2023.

There is also clear recognition that mobility is growing in importance. Eight in 10 employer respondents (80%) say they plan to increase investment in mobility technology over the next five years, up from 67% in 2023. Two-thirds (66%) of respondents believe the scope of the mobility function will grow over the next three years.  

The survey identifies five key drivers that are crucial to the development of a successful mobility function:

• Strategic alignment: Organizations should align their mobility strategy to broader organizational strategy.
• Talent linkage: An organization’s mobility strategy should be used for talent acquisition and development.
• Digital focus: Organizations should have investment and maturity in the automation and digitization of mobility processes.
• Flexibility: Organizations should be embedding flexibility in the selection of program benefits.
• External expertise: Organizations should be co-sourcing or outsourcing selected mobility processes for greater efficiency.

Maureen Flood , EY Global Mobility Reimagined Leader, says:

“It’s clear that businesses do understand the value of international mobility, not least for the impact it can have on the workforce and wider business resilience. With robust polices in place to address risks, the right level of investment, and by ensuring that the function isn’t siloed, mobility can propel businesses forward and help them face the many challenges that the future surely holds. When organizations adopt an evolved mobility approach, they reap much greater rewards.”

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About the survey

The EY 2024 Mobility Reimagined Survey was conducted in January 2024 and received responses from 1,059 employees and employers from 21 countries. 

To take a, CPE accredited, deeper dive into the survey results, please visit and register here:  Welcome - EY 2024 Mobility Reimagined Conference (cvent.com)

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Fujitsu SX Survey reveals key success factors for sustainability

Half of CxOs that deliver both business growth and sustainability use data at high level

Fujitsu limited.

Kawasaki, April 23, 2024

Fujitsu today released the results of the “2024 Fujitsu SX Survey,” ( 1 ) highlighting the results of a survey of 600 corporate executives (CxOs) from organizations in15 countries, investigating their progress in achieving Sustainability Transformation (SX) and their efforts to create new value in business. ( 2 )

The survey reveals priorities that link sustainability with business growth, identifying a group of organizations that balance business growth and SX progress (11% of the total), which Fujitsu has dubbed "Change Makers." Change Makers were found to have two main characteristics:

• A long-term perspective and a mature motivation for Sustainability Transformation to make a positive impact on society and the environment
• The ability to utilize data beyond their organizational frameworks

The report suggests four steps that are required to become a Change Maker, and how Fujitsu can help.

Fujitsu can support customers in their transformation through its Fujitsu Uvance portfolio of digital services and Uvance Wayfinders business and technology consulting. The survey bears out that these services can help customers advance to become net positive and help bring about a more sustainable world.

Survey summary

1. more companies and organizations are eager to promote sustainability transformation, but progress is slow.

70% of executives say “sustainability is the top priority for the next five years," up 13 percentage points from the previous study (57%) published in 2023. Only about a quarter (26%) of respondents say they "achieved tangible outcomes” from their sustainability strategies.

2. Change Makers have a long-term perspective and are making progress in utilizing data:

1）Asked about their motivation to promote sustainability, 60% of Change Makers responded: "to have a positive impact on society." Another 54% said "to reduce the impact on the planet.”

2）Better use of data with other organizations:

• Asked about their use of data to collaborate with partners, 49% of Change Makers say they use data and advanced technology to “simulate and predict future scenarios, supporting efficient decision-making processes.” Some respondents emphasized the importance of sharing data in cutting greenhouse gas emission.
• A quarter (25%) of the Change Makers said they form highly collaborative ecosystems with other organizations, enabling the sharing of resources and data to create shared value.

3. Four steps for becoming a Change Maker and accelerating sustainability:

Survey Metrics

• "Fujitsu SX Survey Report 2024"
• Survey period: November 2023 - December 2023
• Countries surveyed: 15 countries (Australia, Canada, China, Finland, France, Germany, Japan, New Zealand, Philippines, Singapore, South Korea, Spain, Thailand, UK, US)
• 11 industries (building and construction, energy, financial services, healthcare, manufacturing, life sciences, media, mobility, public sector, tech and telecoms, and retail)
• Survey methodology: Questionnaire survey of 600 CxOs in companies and organizations with annual revenues that sit above $500 million.

Download the full report:

• (English) https://activate.fujitsu/en/insight/sx-survey-2024/
• (Japanese) https://activate.fujitsu/ja/insight/sx-survey-2024/
• [1] The survey is conducted by Longitude Research Ltd. in London. (CEO：Rob Mitchell)
• [2] Sustainability transformation : Sustainability transformation: Transforming business to bring about positive changes in the environment, society, and economy. The efforts include to addressing environmental issues such as cutting greenhouse gas and the promoting a digital society for sustainable economic growth.

Fujitsu’s Commitment to the Sustainable Development Goals (SDGs)

The Sustainable Development Goals (SDGs) adopted by the United Nations in 2015 represent a set of common goals to be achieved worldwide by 2030. Fujitsu’s purpose — “to make the world more sustainable by building trust in society through innovation” — is a promise to contribute to the vision of a better future empowered by the SDGs.

About Fujitsu

Fujitsu’s purpose is to make the world more sustainable by building trust in society through innovation. As the digital transformation partner of choice for customers in over 100 countries, our 124,000 employees work to resolve some of the greatest challenges facing humanity. Our range of services and solutions draw on five key technologies: Computing, Networks, AI, Data & Security, and Converging Technologies, which we bring together to deliver sustainability transformation. Fujitsu Limited (TSE:6702) reported consolidated revenues of 3.7 trillion yen (US$28 billion) for the fiscal year ended March 31, 2023 and remains the top digital services company in Japan by market share. Find out more: www.fujitsu.com .

Press Contacts

Fujitsu Limited Public and Investor Relations Division Inquiries

All company or product names mentioned herein are trademarks or registered trademarks of their respective owners. Information provided in this press release is accurate at time of publication and is subject to change without advance notice.