The last 24 months have been challenging for global businesses due to the pandemic, the threat of climate change, supply chain bottlenecks, and now the upheaval in Ukraine. Amidst this uncertainty, there is clear recognition that the world has moved towards a new era of digital technology and software.
Anne Steiner, CEO at consulting firm Cprime, explains, “those companies that truly embrace and master large-scale technological and software delivery will define the economic landscape of the 21st century.”
For instance, “BMW no longer considers itself a car manufacturing company but as software on wheels,” Steiner says. “Soon, over 50% of BMW’s employees will be software engineers. Talent acquisition and retention will be critical if we’re going to survive this new age.” Similarly, in 2021, VW announced plans to boost its share of in-house car software development from 10% to 60% by 2025.
Lean-agile thinking
Businesses must develop organisational agility to compete. Data centricity will allow them to pivot and make decisions faster and shorten the time to market, which will lead to greater profit. Agility needs to be embedded into the culture of an organisation. The way employees work, organise, and behave all need to change.
If organisations fail to change, they will lose market share and potentially disappear entirely. Cprime helps steer companies towards this new future. “Change is coming more rapidly and it’s attacking bigger businesses because, by the nature of their size, it’s harder for them to change,” Steiner says.
Darren Wilmshurst, director, Agility Center of Excellence at Cprime, says, “although big businesses are aware of the need for change, they have largely been stuck in the past, relying on traditional managerial techniques and frameworks. “Look at Primark as an example. They were forced to close all 375 stores 12 days after initial Covid lockdowns in March 2020. That’s because Primark does not sell online. It lost £800m in revenue.”
But Wilmshurst believes that the pandemic has acted as a “boot camp” for more traditional firms, helping them grasp the nettle and realise that it is now or never to go lean and agile.
It’s all about the product
So, what are the fundamentals needed to take advantage of this change? Wilmshurst says it is about putting much more focus on the product.
“Customers don’t want to wait months or years to see new products. You need to get to market faster and part of that is moving from a project mentality to a product mentality,” he says. “You don’t want to do the traditional thing – creating temporary teams around a project and then crashing them when it is complete. You want to create long-lived, stable, persistent, and high performing teams aligned around a product, solution, or service. We call this the value stream, and if you want true agility, you need business-level commitment to it. It has never been just a ‘technology’ thing, it needs to include finance, HR, marketing, legal, and commercial because true value needs to flow across all these functions.”
Businesses are making more decisions now than they have ever made before. They have to become more data-centric to help them make the right ones
Gus Bjokeroth, managing director of Cprime Europe, says businesses need to create smaller, more agile teams to cope with rapidly emerging problems. “It’s hard to move an 18-wheeler uphill. But if you break your organisation up into small pieces, with small teams making small incremental changes, you can move the dial more effectively,” he says. “It’s about running pilots and tests and using these individual pieces and teams to come together to enable products to go to market more quickly.”
Data-centric
More effective use of data is also needed, Bjokeroth argues. “Businesses are making more decisions now than they have ever made before. They have to become more data-centric to help them make the right ones. Emotional decisions were fine when you had time to assess and look and smell which way the wind was blowing, but nowadays you have to pivot quickly. You need data to show whether a product is taking longer than you hoped for, or when the capacity of your staff is getting shorter.”
He says tools such as agile software Jira can help give businesses this extra visibility. “You can capture whether your teams are set up around value and if you are prioritising things so that you can pivot. It’s all about the ability to pivot,” he adds.
Leadership drive
To be successful, support for these tools and processes has to come from the top of the organisation. Leaders need to buy into and drive change. In short, they need to move from a fixed to a growth mindset. “Some traditional leaders might say ‘I am a very successful person, and I wouldn’t be where I am today if I didn’t know a lot of stuff,’ Wilmshurst states. “But some of what they know, which was right even two years ago, is now the wrong stuff.” Those leaders need to understand we are in a new age and that they need to accept that they may be digitally naive, while 25% of their employees are digitally native and know more about technology than their employers. Leadership in 2022 requires a cultural shift, where leaders must do as much, or more, learning than anybody else. They need to lead the changes to systems and ways of working. Only by making those structural changes will they change the habits and behaviours in a way that means their people will feel more inclined to stay with the organisation – a positive cultural shift.”
Leaders also need to tackle the ‘frozen middle’ of their company. For example, a project manager with 25 years of experience who can’t see any value in the new way of agile working and believes the move from projects to product puts their future and their ability to pay their mortgage at risk.
“There is the fear factor because they sit in the middle of an organisation, so when an attempt is made to change something, they can often try and block it. They will do everything in their power to say no,” Wilmshurst says. “It frustrates the teams that want to change and the leaders who can’t see the change happening. But, as a leader, you can’t ignore them because they still have valuable skills and job options. They need to come with you on the journey. A huge amount of what Cprime does is work with leaders, employees, and HR to shape the new ways of working and coach the teams to embed the change and futureproof people’s jobs.”
Steiner says every employee in a business needs to ask themselves whether they are ready for agile change. “Think about your organisation for a minute. How fast can your organisation turn? Are you a jet ski that can turn on a dime? Or are you one of those huge barges?” she says. “The pace of change is accelerating, and you need to get on board in the leanest, fastest vehicle you can find.”
For more information, visit cprime.com/agile
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