Top 10 tools and 10 steps for Agile Transformation Journey

By: Flt.Lt. Sridhar Mulakaluri  

John was completely confused. He is swamped with the information about various models and frameworks and is not able to decide how to go about the whole thing. The program he was excited about was fast turning into a nightmare. Since the CEO called him and asked him to lead the agile transformation initiative, he was quite excited and was working quite hard to figure out how t go about it. He spoke to couple of his friends in other companies and they were not any help as they were also as clueless as he was. A couple of consultants he spoke to were keen to sell him specific models and frameworks. He needed to find a way forward and fast.

This article is a humble attempt to find clarity in chaos.

Here are the top 10 recommended tools and frameworks you need to integrate into your Agile transformation journey. The article will take you step by step through how to integrate these tools and how to use them to get the best results.

Let us first understand what Agile Transformation is.

The agile transformation definition is as an act of transforming an organization’s form or nature gradually to one that is able to embrace and thrive in a flexible, collaborative, self-organizing, fast-changing environment

This cannot be achieved without considering the overall business strategy and aligning all parts and components of an organization to execute that strategy while remaining flexible and adapting to the changing business environment as needed to survive in the VUCA world.

This is what can be called Outcomes Agility, where we continuously monitor and change the strategy according to changing customer needs and market expectations.

We believe that Enterprise Agility goes beyond Agile and Scrum. We enable the process by introducing science-based tools and frameworks that bring in a comprehensive perspective and get cognitively diverse people to embrace change

Let us explore the best tools that can help us achieve this agile transformation.  These tools and frameworks have been suggested to be used in a logical sequence, so that they can build on one another.

We start the journey with the overall vision for the agile transformation in terms of its value add to all the customers and stakeholders. This opens the way to the following 10 steps:

  1. Use Balanced Scorecard which is a strategy deployment tool. This helps us to figure out how exactly we would be going ahead with this and what internal capabilities we need to build.
  2. Develop Objectives and Key Results (OKRs) which bring in prioritized objectives and outcomes we are targeting. 
  3. Use the Theory of Change framework to identify and link the necessary inputs, activities, enablers and barriers along with outputs and link them to the outcomes. 
  4. Develop X-Matrix and fitting all these elements and their internal relationships so that we can manage the interdependencies. 
  5. Build the necessary mental agility and growth mindset among the employees so that they are aligned to the change journey. 
  6. Involve Structural Agility which ensures that the necessary structural changes are put n place along with the new roles and responsibilities. 
  7. Address the technical agility where the teams are trained on the new set of processes, practices and tools necessary for the implementation. 
  8. Build Social Agility in the organization which ensure seamless information sharing among the teams so that they build trust, leading to better collaboration. 
  9. Involve setting up the Kanban boards to bring in transparency and make things visual. This reduces the need for external control and promotes self-managed teams. 
  10. Involve using Theory of Constraints which helps us to identify the process bottlenecks and resolve the same, to achieve continuous improvement.

 

These are the proposed 10 steps and 10 frameworks, which are explained in detail below.

1. Balanced Score Card

The biggest pain that any change leader faces is misunderstanding the reason for change and the resulting misalignment of subsequent efforts. Balanced Scorecard helps ensure that all initiatives are closely aligned with the business strategy.

As described by its creators, the BSC is a strategy development tool and not so much a measurement tool, although it has been understood and misused that way. While the literature talks about starting with financial goals, you might benefit from starting with customers and markets. Why? Because every strategy starts with a vision and mission, and that must always start with customer needs and the difference we want to make in their lives.

Some people consider this old school. Interestingly, it is tightly coupled with the Theory of Change. Even though we hear Theory of Change mentioned more in non-profits and social enterprises, it is a robust model that can be applied to any change initiative.

The job of a mission statement is to articulate the essence of why the organization exists

We start with the customers/markets and what problems we would solve for them. Underlying this
approach is another fundamental idea. Every customer segment has inherent revenue potential. If we do not understand this, setting a financial target
would be a pipe dream. Therefore, we should start with customers. We can start
with financial goals, but that would give the impression that we are more
concerned with making money than solving customer problems. 

Figure 1: Balanced Scorecard

The next step is to decide how many financial targets we would aim for in each of these main segments. As discussed, this would help us understand the revenue potential and decide if offering a product or service to that segment is financially viable. This discussion may lead to a strategic decision on exiting certain markets. This also helps us define our revenue targets for each customer segment for each product. This also helps us decide on our budgets for providing that product or service considering the expected ROI.

Then follow the processes we need to carry out to satisfy these segments and meet the financial targets. This helps us in deciding what services/products we will offer. This helps us in positioning the company in the market by highlighting our niche, our expertise in the products to be delivered, our capabilities and our track record.

The next step is to build the internal capabilities to deliver these products and services and fulfill and justify the positioning and brand promise. This is where we need to decide what capabilities we need to build/acquire to run the business processes, deliver the products and services and meet the customer requirements to achieve the financial targets.

Until this stage, there is no concept of measurement, only broad alignment. Once this is decided, the implementation phase begins. Here we start from the bottom up by creating activities and target data along with KRAs and associated KPIs. Measurement is used to monitor the progress and effectiveness of the strategy in achieving the growth targets. Monitoring cannot be done annually as some understand it. That is the whole idea of bringing in the measurement component. This is the mother of MBO and all measurement.

To achieve organizational agility, we need to continually realign the four areas of the BSC – customers, finance, internal processes, and required capabilities. This is a completely different mindset and attitude that thrives on a growth mindset – constant learning and adapting. This requires a fundamental acceptance of change as the new norm.

This brings the effectiveness of BSC to the agile transformation journey. BSC can help clearly articulate and identify internal processes and capabilities – beyond software/product development and delivery – that must form an integral part of this agile transformation journey. If you are using OKR or another framework directly, they may not provide you with such an integrated and tightly coupled approach to deciding, defining and monitoring the various aspects and initiatives that are part of the transformation.

2. Objectives and key results (OKR)

The next big disaster happens when every department and delivery team start running their own show. While it makes sense to empower these teams, without the necessary alignment, it can be disastrous.

Now you can introduce OKRs, but they need to be aligned to the overarching goals set out as per the BSC. They can fit into the BSC framework, along with KRA/KPI, which does not add much value if we have done a good job with the BSC. Without strategic alignment, nothing else makes sense, however nicely articulated. Goals and key results can be defined at the business level, BU or at the departmental level. When we start cascading implementation, we need to identify various key outcomes and assign them to the appropriate teams responsible for achieving them. Here we will be able to identify some collaborative tasks and potential opportunities for process streamlining to reduce bottlenecks and delays.

If you can’t measure it, you can’t improve it

We should take the goals defined for each of the four areas of the BSC and develop them into Key Result Areas and Key Process Indicators. Once this is done, we have a clear definition of what we are trying to achieve, what the key outcomes (outputs) are that we are aiming for, and how we know when we are achieving them. These are measured by each KPI linked to an output and a set of associated tasks.

Just because we know where we want to go does not mean we know how to get there. This is where the next step comes in.

3. The Theory of Change framework

An often-omitted component of any plan is WHY we want to execute the plan and what exactly is required to do so. If teams do not understand and appreciate the difference between the results of their efforts and the outcomes intended for the program, people will begin to assume them, leading to misguided actions.

We are now ready to use the Theory of Change framework to bring in the necessary inputs, activities, outputs and outcomes. The Outcomes are the strategic business objectives that we have set in the BSC. These are the impact we want to achieve through our work/projects.

The outputs are the key outcomes as we discussed them in OKR. The next level is the activities/tasks. Each task is necessary to deliver the corresponding outcomes. Here we will list a series of tasks and processes that must be performed to achieve these outputs. These are in turn linked to the internal processes that need to be executed as per the BSC. Once we have these tasks, the associated KPIs will help us measure process capability and effectiveness.

Change, before you have to

Once we have defined the tasks to be performed, we need to define the inputs required to perform those processes. These inputs include skills and abilities, infrastructure, tools, etc. These capabilities are in turn linked to the capabilities identified in the BSC.

Providing the necessary inputs is an obvious necessity for the success of the transformation program. This is where collaboration with the support functions will play an important role. This means that we cannot just focus on the engineering teams, but also need to involve the support functions and teams in the transformation journey.

Each function has a role to play, including HR, recruitment, training and development, IT and network support, procurement, finance and facilities management. Other teams will need to be involved depending on the nature of the business and the organizational context. They will need to be involved in specific training programs and should start using appropriate tools and automation as required. An effective tool for all support functions would be Kanban, as in most cases they will be managing the help desks.

In addition to the service desk function, they will also need to track new initiatives and major changes to systems and processes. These tasks need to be tracked on a separate board as they would span over longer periods of time.

4. X-Matrix

Most change leaders face the challenge of lack of coordination and cooperation between teams and departments as teams do not spend enough time to understand the interdependencies. This leads to a silo mentality and lack of a big picture. This slowly leads to blame and lack of ownership.

We are now ready for the X-Matrix, a great tool for figuring out the dependencies and tracking the various tasks and activities to completion. The X-Matrix will help us identify the desired outcomes and link them to the tactical tasks mapped by the strategies and objectives.

We will be able to identify the interdependencies between these factors – outcomes, strategies, goals, and tactics – and track and monitor them closely. Tactics are the tasks we identified in the Theory of Change framework. However, using the X-Matrix, we will be able to identify the multi-directional dependencies, not just linear relationships. 

Strategy without tactics is the slowest path to victory. Tactics without strategy is the noise before defeat

We can also have a multi-level X-Matrix developed for each outcome we have identified. This helps each BU / department track their own X-Matrix that is well aligned. We can also make correlations and map team members for accountability.

So far, we are on the drawing board. Now we are moving into the field and onto teams to start implementation. This is where the power of influence comes into play. If we do not understand how to influence all the key stakeholders, and if we do not use the appropriate tools to do so, the implementation will not produce the best possible results ROI.

At Enterprise Agility University, some such tools and techniques have been developed based on strong scientific foundations that integrate well with any given context and help us drive agility across the board. Some of them are mentioned below.

5. Mental Agility

The typical top-down approach to transformation neglects the critical success factor: people who are willing and able to change. This will not happen without instilling mental agility. Teams would feel threatened, stressed, neglected, uninvolved and lack the necessary skills to participate in change.

The first aspect of change implementation is getting teams and employees to adopt the right mindset. We are not talking about passive acceptance of change here, but active support and participation. This can only happen if we help team members understand why we are seeking this change.

All team members will have individual concerns and comfort zones that need to be listened to. They also need to be equipped with the necessary skills to perform well under the changed conditions. “Change Pyramid” is a great tool that can help us build the necessary consensus and mindset.

Being challenged in life is inevitable. Being defeated is optional

The change also needs to be communicated to all the stakeholders and the “Change Communication Pyramid” is a great help. Each team member and stakeholder must be involved individually as well as at the group level for better alignment. “Change Pyramid” and “Change Communication pyramid” are tools developed by Enterprise Agility University.

Growth mindset is a critical skill for any employee working in an agile company as the business environment is very fluid. Having rigid skills and not being willing to learn will not help both employees and the organization. The ability and transparency to admit a lack of skills and the willingness to work to build them quickly is a critical success factor for enterprise agility.

Table 1: Fixed vs Growth Mindset

 

6. Structural Agility

Change leaders often overlook another critical aspect of change – that it requires a different organizational structure. They expect the same old people in the same old roles to deliver the new results. As the saying goes, old habits die hard. People tend to digress into the old ways and actively find reasons why the new way of working is not working. This can lead to a lot of confusion and wasted effort.
The next step to take is to implement Structural Agility. Enterprise Agility University defines Structural Agility as “changing the structure and operations of the organization through experimentation while minimizing the impact on the health of the organization”.
Here we need to bring in different levels of resilience so that the organization becomes strong, robust and able to withstand multiple demands and expectations, both internal and external.

There is no such thing as good or bad organizational structure; there are only appropriate or inappropriate ones

We need to identify the contextual factors that enhance resilience – individual, technical, structural and social. This is a critical success factor and can be managed with several tools and models.

Another aspect of Structural Agility is redefining some roles as they may no longer be needed. There must be a balance of authority and responsibility. Otherwise, the people playing these new roles will not be able to do their jobs. Traditional command and control models must give way to self-managed teams.

One of the Agile principles is self-managed teams. This calls into question the entire middle management level. What would a project manager do if the Scrum team, consisting of a Scrum master, a product owner, and the development team with all the necessary skills, worked together? Many companies struggle with this question and maintaining additional roles beyond the Scrum team leads to the same old command and control system that limits and confuses teams. Too many people managing and overseeing delivery may not be necessary once we implement the agile methodology, as they prevent the team from taking full ownership.

7. Technical Agility (Agile Manifesto and Scrum or similar frameworks)

The best way to make sure people follow the new process is to partially automate it. This will ensure that people must follow the new steps. When the most mundane and repetitive actions are automated, it also frees people from complaining about those tasks. Without these changes, people sometimes feel like they are doing more work, documenting more, and being less productive. Those of you who have been involved in ISO or CMM implementations have certainly experienced these effects.

When the right mindset and structures are in place, teams are ready to adapt frameworks like Scrum or Extreme Programming. The choice of framework needs to be made wisely, considering the purpose, the nature of the projects and the deliverables.

Before selecting the framework, it is especially useful for the teams to understand the Agile Manifesto and the twelve principles. The manifesto identifies the focus areas and clarifies what should be treated as important. The four basic principles of the manifesto are.

  • Individuals and interactions over processes and tools
  • Functioning software before comprehensive documentation
  • Collaboration with the customer over contract negotiations
  • Reacting to change rather than following a plan

 

The first set takes precedence over the second set, in each of the principles. This completely changes the way software is traditionally developed and brings a lot of flexibility and customization to the process. However, to adapt this, we need an agile mindset.

While it is not a hard and fast rule, each framework lends itself to a specific context. Scrum can be a good fit if we are developing software from scratch. Kanban is a great visualization tool that we would use at a later stage. However, it fits better in a maintenance and support scenario. Ambiguous and evolving business needs would be better served with Test Driven Development.

Scrum is like your mother-in-law. It points out ALL your faults

As we can see, training teams on the agile methodology and Scrum framework does not come into play until Step7. 

Scrum is an easy framework to implement that has three roles, four artifacts, and five ceremonies. However, until teams understand and adhere to the agile manifesto and the twelve agile principles, simply going through the motions will not help. 

There are also many proponents of SAFe – Scaled Agile Framework for large projects where multiple Scrum teams are working together. This needs to be applied carefully and contextually. Just because it is available does not make it suitable for your implementation. It needs more social agility, which is our next step. It would make sense to roll out SAFe only after social agility is ensured. 

8. Social Agility

Many change leaders have experienced that teams are not willing to talk to each other. This leads to increased bureaucracy and slows down the decision-making process. It is often seen that people sitting across from each other email each other instead of just going over and discussing the issues.
The next step is to build social agility. This is an interesting concept and involves tools like visual boards, informal communication channels, etc. The key point is how quickly people can get information from each other without using formal channels. This leads to an increased ability to connect and collaborate with each other. Increased collaboration, leading to faster problem solving and short response times, is the hallmark of agility.

Communication, the human connection is the key to personal and career success

Concepts like “Enterprise Social Density” and “Enterprise Social Visibility” are to be understood and encouraged here. Helping people to form informal connections and non-hierarchical teams/groups where they can share knowledge and information seamlessly is the key success factor here

9. Kanban boards

One of the missing elements in many transformation programs is transparency. Fearing reprisals or failure, people become secretive. Hoarding information leads to complete loss of agility. Visual communication is one of the most effective ways to create the right culture in the organization.

Whether you use Kanban for delivery or not, Kanban boards are a great way to visualize and identify process bottlenecks. They also create and bring needed transparency to the environment. The simple fact that the team is willing to self-disclose their productivity is a mindset booster. It also encourages ownership and accountability as a team.

 

As explained by David J. Anderson, Kanban is not a software development lifecycle methodology or a project management approach. It requires that some process be already in place so that Kanban can be applied to incrementally change the underlying process. 

Table 2: Typical Kanban Board

Imagine walking into the workspace and seeing many Kanban boards. What thoughts are triggered in our minds? What thoughts come to the minds of employees? These displays can help build a strong, transparent culture across teams and the organization.

10. Theory of Constraints

Many managers are often perplexed when they see that despite teams working hard and long hours, deliveries are consistently delayed. The individuals are productive, but the system is not. This happens quite often, and people are perplexed. They spend more time, more resources, and more money, which only increases the problem. The Theory of Constraints is a great way to help us identify the bottlenecks in the process and fix them so that throughput is increased. By continuously identifying and fixing bottlenecks and increasing system effectiveness, this can really increase the productivity of the team.
Every system has at least one bottleneck. That is the basic idea, and TOC helps us by identifying them, uncovering the assumptions associated with them, and building exceptional production and delivery processes. The Theory of Constraints focuses on three key questions.

  • What to change?
  • To What to change?
  • How to change?
 

It focuses heavily on the incorrect assumptions and the uncovering of those assumptions. The five steps in implementation are shown in the picture below.

 

Figure 2: Theory of Constraints

The goal is not to improve one measurement in isolation. The goal is to reduce operational expenses and reduce inventories and improve throughput simultaneously

The moment we start using Kanban boards, the bottlenecks become very visible and obvious. Then we can bring in TOC to address them and build the capacity necessary to ensure smooth productivity to keep the program moving forward on the transformation journey.

The final understanding of this whole story is that there is no defined or desired end stage that is fixed per se. It will always be a moving target based on how the business environment changes. It is simply an organizational culture and an inherent capability that we are building that will continually evolve and ensure sustainable growth and progress.

Although the sequence of steps sounds linear, there can be many forks and deviations based on the organizational context. This is the most important insight we should carry with us. Always be prepared to deviate from the path to rejoin later. The suggested path is a logical, general direction and should in no way be considered prescriptive – although it does provide a logical approach that brings all the necessary pieces of the puzzle together. Most of these pieces have already been thoroughly researched and successfully implemented around the world.

In this article, I have proposed and presented a step-by-step process to achieve enterprise agility. The process starts with the groundwork and establishes the necessary foundation and planning for the journey ahead. The next steps are to create the necessary mindset and structure to effectively adapt and use the tools and frameworks. Finally, we bring in the necessary monitoring and control processes that feed the necessary inputs into a continuous improvement process. This is classic PDCA in action!

About the Author

Flt.Lt. Sridhar Chakravarthi is an experienced organizational change coach and consultant with over 30 years of leadership experience in various industries. He believes in the possibility of exponential growth for individuals, startups and mature organizations. He empowers them to achieve exponential growth by bringing agility into their mindset, processes and behaviors. He is an authorized training partner for Enterprise Agility University, runs his company “Coach for Change” and lives in Bengaluru, India.

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