The role of agility in digital transformation
Every new decade sees businesses split into winners and losers as technology evolves, competitiveness tightens, and new market entrants challenge the incumbents.
As we head into the 2020s, the next generation of winners will be those that are leading the charge on digital transformation. But it’s not enough to have a great CIO and a capable IT department. There needs to be an embedded culture of business agility to drive future success.
Why agility is important
Using digital transformation to gain competitive advantage often means that your company’s operating model needs to adapt. An agile business will achieve this by making steady, iterative steps towards its goal.
‘Agile’ methodology is well embedded within most companies’ technology and project management teams today – but this approach is just as valuable when adopted at organisational level. It is well proven to minimise risks and ensure that the desired corporate outcome is always achieved. Yet it remains rare in the world’s major companies.
The need to embrace failure
One of the big challenges for organisations in becoming more agile is a well-established fear of failure. This is ingrained in company culture. Executives in most organisations are asked to set a strategy and targets – and are then held accountable to them. Failure to deliver usually ends up with the rapid sudden disappearance of that executive!
Yet in an agile environment, and in digital transformation, failure is an essential part of the process – but we call it ‘test and learn’.
Agility means doing something new, discovering how well it works and assessing whether it achieves the desired results. This approach is hugely valuable for companies today that are seeking to innovate and find new ways of doing things. It requires brave thinking and experimentation - so, a culture where failure is not tolerated is far from helpful.
Honesty in learning
The traditional ‘fear of failure’ culture has created a fascinating situation where leaders will bend the truth to extract apparent success from a project that has not achieved its goals. As a result, companies continue to progress with initiatives that have failed, without being aware of it!
By embracing experimentation and ‘test and learn’ you will create a new culture of transparency, where every stakeholder understands the true performance of a new project and, therefore, how to improve on it. This approach is clearly preferable to continuing with a transformation initiative that is based on flawed logic or ‘embellished’ performance reports.
Embrace the ‘rethink’
Another common occurrence with major projects – both in digital transformation and other areas – is that the sheer cost and momentum behind change forces a resistance to agility.
Most major projects involve expensive design, piloting, research and planning – so millions have been spent before the transformation even begins. Professional reputations are staked on the delivery of change, so that ultimately finishing the project the goal becomes more important than making sure it is effective.
The organisation often discovers along the way that there are major obstacles or new risks that had not originally been anticipated. But instead of stopping, thinking and adapting to these new challenges, a doggedness sets in that forces the project through regardless. This ultimately leads to lesser success, fewer returns and, ultimately, that the original objectives are not achieved.The project is flawed.
Building a more agile culture
The fundamental change required is that companies need to understand that failure is part of growing and essential. This is a pretty major shift, however, so the first step is to change the terminology. Instead of talking about projects ‘failing’ or being ‘unsuccessful’, we should talk about piloting, learnings and exploration.
We must also build regular ‘test and learn’ phases into all project planning. This should not be limited to technical testing: it should incorporate all forms of feedback including employee and customer consultations, risk analysis and systems integration.
Crucially, there must be time to explore and react to the learnings we gain from these stages. Too often, the tight timescales of a project plan mean that we plow on, without reassessing and redesigning to allow for the important feedback from the various audiences.
Taking an agile approach to transformation means setting a goal, but not the time or cost. The project is broken down into ‘sprints’ or phases, each with an individual goal. There is then time to make adjustments to achieve the desired impact.
It’s fascinating that the Agile approach has been the norm for technical projects for almost two decades, and yet it still remains so rare at a corporate level. As digital transformation continues to drive competitive advantage in the years to come, we will soon see the more agile businesses taking the lead.
WIL Group have executive interims who can lead aligning digital transformation by aligning the strategy, leadership and the workforce.