When I work with clients in digital and business transformation programmes one of the key questions that often arises focuses on the application of iterative working practices and wider agile principles across the organisation. Our book makes the case for the broader applicability of agile thinking, resourcing and ways of operating in the service of supporting transformation, continuous experimentation and innovation. We’re describing a fundamental reorientation of the business to a wholly different type of organisation that is characterised by flexibility, manoeuvrability, learning, and continuous improvement.
Transitioning to these newer approaches can be hugely challenging for businesses that have been schooled for decades in Waterfall thinking and culture. Much of what organisations think they know has to be unlearned and put back together again in a different way. It can often be uncomfortable for people across the company. If not done properly, there’s a high probability of drift and failure.
Iterative approaches to value creation are typically undervalued and under applied in most companies, yet are central to transforming business for the digital age. But what we’re not saying is that Agile, or other iterative processes or version of Agile, should be the default way of working right across the organisation. Questions about the scalability of agile approaches run alongside questions about where we should apply them and, just as importantly, where we should not (in fact I’m working with a large, global telco business right now and these are precisely the questions that they’re working through). In order to determine the answers to these questions we need to take account of the different context and environment in which functions, disciplines, tasks, and areas of the business operate and apply appropriate methodologies, capability types, roles and ways of working. Context is everything.
In other words it’s not only about doing Agile, but about being agile. Whilst we need to consider which areas or functions of the business should work more iteratively or in small, multi-disciplinary teams, we also need to consider which areas of the business should not. We need to think about how the latter can support the former, how we can bring people on the journey with us, and be aware of the tensions that will naturally arise from introducing new ways of working. We need to create enough space to enable a new culture to thrive, whilst ensuring that the degree of separation does not hamper broader learning or change. In other words it’s about agile as a culture, and not just as a process.
Building out from the concepts and frameworks outlined in the book there’s a way that I’ve found useful to describe to clients a sensible approach to solving this challenge. The approach is founded in the different ‘jobs-to-be-done’ that the business has. In some domains the problems will be ones which are characterised more by known quantities and the objective more about best practice and driving efficiences. In other domains, the tasks will be more complicated or complex, with far higher degrees of uncertainty and unfamiliarity. But the point is that the organisation needs to accommodate a robust way of handling all three domains, and apply appropriate responses, processes and thinking to each one (this framework draws on the work of Simon Wardley who has widely explored organisation situational awareness, and his thoughts on pioneers, settlers and town planners, Dave Snowden’s work on Cynefin, and concepts such as three horizons thinking). The framework reflects three key domains:
The differences between the domains define the organisational response:
Domain One: Relatively stable environments, higher degrees of certainty.
This domain is likely to be defined by established, well developed, relatively enduring contexts that change slowly. The challenges are there, but they are characterised more by ‘known knowns’. Perhaps the market is mature, and the company’s proposition well established. The need is for common ways of doing things, scalability, and best practice. There is value in innovation, but this is focused on innovating on core capability to drive incremental gain or to drive efficiences and better ways of doing what you do now. This domain is well suited to those people who are exceptional at operationalising, optimising and institutionalising.
Domain Two: Evolving contexts
Domain Two is characterised by a higher and faster level of change than domain one, or more known unknowns. The business can identify what it doesn’t know and set out to fill the gap or to learn. The problems have more variables than domain one and are complicated, so the response needs to be founded in developing and exploiting expertise. The focus is more on test and learn, and iterative working to adapt existing capability, innovate in adjacencies, and commercialise and evolve ideas so that they can be scaled, but the rhythm is not necessarily as fast as domain three. This domain is suited to people who are great at developing models that work in the real world, who can define the operating model or revenue opportunity.
Domain Three: Rapid change, high uncertainty
In this domain, there are plenty of unknown unknowns. The problems that the business is trying to solve are complex, the context far newer, the response is emergent by necessity. Iterative working is the only way of navigating this complexity and creating value in this ambiguous environment. This is new capability, future facing ideas, exploration of entirely new propositions, the kinds of ideas that may disrupt the existing business or take it in a new direction. This is the domain of pioneers – lateral, creative or visionary thinkers who can visualise a different future.
Joseph Schumpeter defined innovation as a three stage process of ideation or invention, commercialisation and scaling or adoption. If the organisation is to survive in the modern business world, it needs to innovate continuously and it needs to be good at all three of these things. It needs a continual flow of new ideas, space to harvest and nurture those new ideas, and the ability to scale and operationalise. It needs to be good at all three domains. It needs to allocate sufficient resources to each one, and it needs to apply appropriate processes and thinking.
New propositions in the business may start out in domain three, move toward domain two, and end up in domain one, but as they progress the types of people that we need working on them will shift, and the approaches and ways of working that we apply will also likely evolve. Large organisations may well be comfortable with waterfall thinking and processes but the application of more iterative working methodologies like Design Thinking, Agile and Lean can help them to explore new and adjacent territory in continuous and competitive ways, and to develop new ways of thinking and operating that can scale far beyond the innovation lab and help transform the business. But only if the newer ways are not suffocated by the old. Whilst key parts of the business will need to be doing Agile, every part of the business will need to be agile. It’s time for a far more holistic but contextual view of the business transformation.
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