What Makes an Agile Transformation Successful According to Science?
An evidence-based intervention
We accompany a lot of agile transformations. We regularly talk to managers, consultants, CEOs and agile coaches. And we come across one contradiction time and again.
The agile world is based on three principles (depending on how you look at it, but you can look at it the way we do right now):
Transparency
Inspect
Adapt
We want to make empirical decisions in order to achieve good results in a lean way. But there is a lot of opinion and a lot of marketing, but very little theory anchored in science in the agile world.
We sometimes wonder if this is because there is an unpragmatic stigma attached to science. However, there is a lot of very good research out there. That's why in this issue we want to answer the most common questions about agile transformations in a scientifically sound way.
What Are the Goals of Agile Transformations?
The primary objective of Agile transformations is to enhance organizational agility and responsiveness to market changes. Studies show that Agile methodologies empower companies to react swiftly to customer needs, reduce development cycle times, and cut operational costs (Naslund & Kale, 2019; Russo, 2021). Agile's focus on iterative development allows teams to continuously deliver customer value, fostering a more flexible and innovative culture (Paasivaara et al., 2018). By adopting Agile, organizations aim not only to boost efficiency but also to achieve higher stakeholder satisfaction by aligning projects with customer expectations and strategic objectives (Serrador & Pinto, 2015).
How Do We Measure Success During Our Agile Transformation?
Measuring success in Agile transformations involves more than just tracking traditional project management metrics. Research suggests that combining quantitative metrics (e.g., time-to-market, code quality—such as the percentage of code covered by automated tests—and team velocity, which measures how much work a team completes per iteration.) with qualitative assessments (e.g., customer satisfaction and stakeholder alignment) provides a more holistic view (Olszewska et al., 2016). Tools like CAST's Application Intelligence Platform (Short Disclaimer: We have not worked with it ourselves, but maybe it helps some of you folks) enable organizations to measure improvements in structural code quality and functional outputs, focusing on delivering business value rather than just tracking lines of code (Snyder, 2017). By continuously assessing both performance and customer feedback, companies can ensure they are on track toward their transformation goals (Serrador & Pinto, 2015). Organizational Psychology offers a lot of methods to evaluate readiness to change, team morale or even organizational agility quantitatively. If you think this might help your organization, send us a message to know more.
Two important notes on Team Velocity:
Velocity is team-specific: The speed of one team cannot be compared with others because each team works differently. Typically, Velocity is based on so-called Story Points, a fictional estimation unit that each team defines for itself. What is defined as 8 Story Points in one team might be defined as 27 Story Points in another. The moment I use Story Points as a performance metric, teams may start “pricing” their work with higher Story Point estimates. Voilà: I suddenly have more Velocity, meaning more Story Points per iteration, while the actual amount of work done remains the same.
Not an absolute measurement: Velocity is meant to help the team with self-management and planning, not to create performance pressure. In our experience, Story Points are a valuable tool for teams to assess how they are progressing
What Cultural Changes Are Necessary to Support Agile Practices?
A successful Agile transformation requires a significant cultural shift within the organization. This includes moving from hierarchical structures to self-organizing, cross-functional teams where collaboration and decentralized decision-making are the norm (Russo, 2021).
Embracing the symbiosis of agile frameworks and organizational psychology means that the opposite of poor leadership is not the absence of leadership, but rather good leadership—one that ensures self-organization does not become a burdensome hindrance in the transformation process, but instead fosters effective and healthy ways of working!
Organizations need to foster a mindset focused on continuous learning and improvement, embracing transparency and open communication (Dikert et al., 2016). Agile also requires a customer-centric approach, where the focus is on delivering value rather than adhering to rigid processes (Kuhrmann et al., 2021). Building a culture that encourages experimentation, embraces failure as a learning opportunity, and prioritizes outcomes is key to sustaining an Agile transformation.
What Challenges Might We Face During This Transformation, and How Can We Overcome Them?
Agile transformations are not without challenges. Common obstacles include resistance to change, coordination issues in distributed teams, and difficulties integrating Agile with existing legacy systems (so, grown, old systems) (Dikert et al., 2016; Snyder, 2017). Without strong management support, Agile transformations can lose momentum and fail to deliver the expected results (Russo, 2021).
To navigate these challenges, organizations can leverage advanced methods from organizational development and organizational design to ensure a successful transformation:
Secure Top-Level Management Support: Ensure that executives are fully committed to the Agile journey by showing what worked well and involving them in key decision-making (Dikert et al., 2016). Utilizing Kotter’s 8-Step Change Model can help create a structured approach, including building a guiding coalition to drive the change (Kotter, 2012).
Invest in Training and Change Management: Comprehensive Agile training for teams and leaders is essential. Leveraging Appreciative Inquiry (AI) can shift the focus to organizational strengths, fostering a positive attitude toward change (Naslund & Kale, 2019). This approach engages teams in solution-oriented dialogues, helping to overcome resistance.
Implement a Phased Rollout with Continuous Feedback: Start with pilot projects to test Agile practices, gather feedback, and refine processes before scaling across the organization (Olszewska et al., 2016). Use Design Thinking workshops to prototype new processes, allowing teams to iterate quickly and adjust based on real-world feedback.
Encourage Open Communication and Collaboration: Foster a culture where teams can freely share ideas and challenges. Liberating Structures can be used to promote open dialogue and collaboration, enhancing team engagement. Additionally, conducting Organizational Network Analysis (ONA) can identify socio-technical networks and streamline communication across distributed teams (Paasivaara et al., 2018).
Align Agile Initiatives with Business Capabilities: Use Business Capability Mapping to ensure Agile practices align with strategic priorities. BCM (Business Capability Mapping) is a method used to identify and visualize an organization's capabilities and core competencies. It helps align strategic priorities with operational capabilities and highlights which areas are crucial for investments or improvements during transformations.This helps in prioritizing initiatives that provide the most significant impact, thus driving alignment with overall business objectives (Kuhrmann et al., 2021). Objectives and Key Results are a beneficial agile framework for this purpose, too.
Customize Agile Frameworks to Fit Your Organization’s Needs: Tailor the chosen Agile methodology to align with existing processes and structures, ensuring a smoother transition (Kuhrmann et al., 2021). Do that based on data!
Foster a Collaborative and Transparent Culture: Utilize Lean Enterprise Transformation principles to streamline value streams, eliminate waste, and optimize efficiency. Regular Team Health Checks, such as those modeled on the Spotify Squad Health Check, can observe team dynamics and psychological safety, ensuring teams are operating effectively.
Consider using science-based approaches for more precise information!
Outro
We hope you enjoyed this briefing and found it valuable for you and your organization. If so, we would be very pleased if you forward this post to one or two people who might also find it useful!
If you'd like to learn more about how this could benefit your organization, feel free to send us a message at hallo@fourfates.de.
See you next week!
References
Dikert, K., Paasivaara, M., & Lassenius, C. (2016). Challenges and success factors for large-scale agile transformations: A systematic literature review. The Journal of Systems and Software, 119, 87–108. https://doi.org/10.1016/j.jss.2016.06.013
Kotter, J. P. (2012). Leading change. Harvard Business Press.
Kuhrmann, M., Tell, P., Hebig, R., Klünder, J., Münch, J., Linssen, O., Pfahl, D., Felderer, M., Prause, C. R., MacDonell, S. G., & others. (2021). What makes agile software development agile? IEEE Transactions on Software Engineering. https://doi.org/10.1109/TSE.2021.3099532
Naslund, D., & Kale, R. (2019). Is agile the latest management fad? A review of success factors of agile transformations. International Journal of Quality and Service Sciences, 12(1). https://doi.org/10.1108/IJQSS-12-2019-0142
Olszewska, M., Heidenberg, J., Weijola, M., & Porres, I. (2016). Quantitatively measuring a large-scale agile transformation. The Journal of Systems and Software, 117, 258–273. https://doi.org/10.1016/j.jss.2016.03.029
Paasivaara, M., Behm, B., Lassenius, C., & Hallikainen, M. (2018). Large-scale agile transformation at Ericsson: A case study. Empirical Software Engineering, 23(2), 255-291. https://doi.org/10.1007/s10664-017-9555-8
Russo, D. (2021). The Agile success model: A mixed-methods study of a large-scale agile transformation. ACM Transactions on Software Engineering and Methodology, 30(4). https://doi.org/10.1145/3464938
Serrador, P., & Pinto, J. K. (2015). Does Agile work? A quantitative analysis of agile project success. International Journal of Project Management, 33(5), 1040-1051. https://doi.org/10.1016/j.ijproman.2015.01.006
Snyder, B., & Curtis, B. (2017). Using analytics to guide improvement during an Agile–DevOps transformation. IEEE Software, 34(1), 78–85. https://doi.org/10.1109/MS.2017.7
Best, and until psychological fate brings us together again
Moritz and Nico
Organizational Psychology Briefing