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Three Companies Proving Agile is Successful Outside of Software

Agile is often referred to as a project management framework, methodology, or a mindset and is widely used throughout software development companies. You may have heard about some of the benefits of Agile like increased productivity, higher success rates vs. traditional project management, and boosts to customer satisfaction while simultaneously decreasing time to market, costs, and waste.

With results like these, you might be asking if Agile could also work for your organization, even if you’re not in software development. Unfortunately, I often encounter the mindset that “Agile is only for software, its principles don’t apply to us.” I think that’s just plain wrong. As a Certified Scrum Master and Product Owner myself, I often see Agile principles in practice beyond their perceived scope of software development, even using Agile in government work.

It’s true that many software development companies have adopted Agile and been greatly successful with its implementation, but why couldn’t professional services like Management Consulting, Human Resources or Marketing use the same principles to reach success? That very question was the focus of the recent Business Agility Conference in NYC. In a first of its kind event, 300+ agile professionals, consultants, and business leaders participated in a series of short presentations and facilitated workshops to discuss how applying Agile can, and is, innovating and disrupting current markets while increasing organizational success outside of software development.

While there were several great presentations focused on successful Agile implementation outside of software development, I think the following three presentations did a particularly great job:

David Grabel – VistaPrint

VistaPrint, a marketing company for small businesses, conducted an evaluation of their waterfall methodology revealing that the teams were taking more than 60 days to take a new idea to a deliverable. However, the 60-day cycle amounted to only about 40 hours of actual work.

Why, if the actual life-cycle takes only 40 hours of actual work were they seeing the process take two months to deliver? A root cause analysis revealed they were suffering from feedback “swirls”, blaming, unclear decision rights, and long creative lead times.

VistaPrint made the decision to switch to Agile, focusing on decreasing project lead time. They began by promoting team environments, information sharing, and transparency. They implemented team building activities, daily stand-ups, Kanban boards, an idea pipeline, more informational touch points, and retrospectives to review what went well and what didn’t to improve their processes for the future.

In five months, they saw their Lead Time decrease from 40 days to 15 days. Five months later, they would see this drop further to 7 days, an 83% improvement overall.

Dan Montgomery – AgileStrategies

Dan Montgomery was hired as a consultant and coach to help 5Acres, a not-for-profit orphanage placing children with permanent loving families, improve their business model to increase the number of children placed with permanent families each year.

The current system used a waterfall methodology and a hierarchical management framework. The control was tightly coupled and often failed in cascading down to the appropriate levels for execution. The organization also found that there were far too many initiatives being worked simultaneously further affecting their ability to successfully plan, execute, and deliver results.

5Acres began the transition to Agile by conducting team building activities and deep dives to define the organization’s initiatives. One key outcome was implementing the use of Objectives & Key Results (OKRs). They committed to taking on only 1-5 initiatives at a time to improve the likelihood of success. The teams focused on the mantra “start less and finish more.”

In doing so, 5Acres took over 30 strategic initiatives and prioritized them to set five clearly defined, measurable, organizational goals to reach by 2020. The clearly defined goals helped 5Acres hone in on their key objectives and desired outcomes over a short 3-5 year horizon resulting in a focused, attainable plan.

Isabella Serg – AgileIBM

Agile is not necessarily new to IBM. The technology company has been using Agile across IT programs for years. The novelty was implementing it in their Human Resources department.

IBM was facing challenges in recruiting and retaining top talent including the difficulty of attracting STEM talent, an expanding global workforce, and a need to better manage high and low performance across the organization. To improve their employee services, HR conducted an evaluation of their current practices and identified two areas that would benefit from an Agile approach: its hierarchical organization and implementation of a specialized work force within HR; and managing work in progress (WIP).

IBM started by identifying their Big Hairy Audacious Goals (BHAGs) which fed into the creation of cross-functional, self-selected teams. Making the change from specialized, management assigned teams to cross-functional, self-selected teams increased employee feelings of empowerment, purpose, and collaboration ultimately resulting in better work products.

The teams implemented a backlog to manage their WIP. This provided transparency and focused employees on finishing a task before starting a new one. The teams were then able to measure their work and end results providing them further insights into their strengths and identify areas for improvement.

As we can see from these three examples at the Business Agility Conference, Agile is not only successful in software development, it’s just the first industry that really proved it works. Creating cross-functional collaborative teams can lead to employee empowerment and boost team performance while delivering better client results. Developing measurable, attainable, time-boxed goals can lead to a higher likelihood of successful execution: start less and finish more. Implementing transparent work practices, measuring end results, and evaluating strengths and weaknesses can lead to process improvement and increased efficiency.

 

The basic principles of Agile center on collaboration, transparency, and the creation of self-organizing cross-functional teams. Almost any organization can build on those basic principles to achieve success.

picture of team collaboration

Five Tips for a Successful Transition to Self-Managed Teams

by Danielle N. Paula, Technical Assent consultant

Part Three of a three-part series

With 80% of Fortune 1000 companies reportedly now using self-managed teams in an Agile environment, you may be thinking that the traditional top-down, command-and-control organizational hierarchies may become extinct – and with good reason. There are several advantages to employing self-managed teams in an Agile environment over the traditional hierarchy structure including increased employee satisfaction, lower overhead costs, and increased stakeholder buy-in.

While you may have read previous articles about organizations successfully employing self-managed teams, it’s important to note that their success doesn’t happen overnight. There are several hurdles that can stand in your way, not only in making the transition, but also in ensuring that teams are successful once the transition is made. To be successful, you need to be willing to lay the proper foundation and be ready to actively engage throughout the transition and after. Whether you are just starting the transition or are already part of a self-managed team, here are five tips to help set your teams up for success.

1. Make Sure You Are Reorganizing for the Right Reasons

It’s not an uncommon occurrence for a CEO to determine that the company needs to reorganize into self-managed teams without understanding the real motivations behind it. There are lots of studies, anecdotes, and statistics which promote the benefits of self-managed teams like faster time to market, increased profits, and lower overhead. While this may be true, leaders need to set realistic, measurable goals before engaging in a reorganization. You’ll also need to make sure you revisit and reassess these goals often to ensure your teams are always properly aligned.

2. Communicate Early and Often

Ensure that management is involved from the get go. Start talking about the transition and take steps to set expectations. Leave yourself time between announcing the shift to its actual implementation. This will open the door to employee questions and answers, which greatly eases uncertainty (especially among managers who may find themselves taking on different roles in this new structure). If you’ve already made the transition, commit to regular open communication with employees including timely updates of the organization’s goals and visions. It’s extremely important for employees to understand organizational and project goals, as well as the context around it. Create an open-door policy with leaders so that employees can ask clarifying questions and share any frustrations related to working in a self-managed team. This will not only let employees create better work products but also let them know that it is natural to have growing pains. The open communication can also facilitate opportunities for improvements.

3.  Hire a Professional Agile Re-Org Consultant

If you have never been through an organizational transition or feel the need for expert advice to ease the transition, hiring an expert can be invaluable.. It’s inherently natural for employees to fear change. Professional Agile consultants are used to creating and working with self-managed teams. They can help show you and your employees that change isn’t so scary. A consultant can meet with leaders to delve into the “why” and “how” behind the move to self-managed teams. They’ll also be able to facilitate group exercises, focus groups, Q&A sessions, and help draft communications providing a path forward that works for your organization.

4. Use 360-Degree Feedback to Garner Employee Buy-In

Engage all employees in the reorganization process by holding focus groups or discussion panels to help influence the way the teams are created. Also solicit feedback from employees about what they like about their current positions. Ask if it make sense for the teams to be project based, goal based, or even functionally based. Evaluate if there are areas in the organization that lack expertise or support and build them up with the reorganization process. Encourage team members to provide open and honest, constructive feedback to their team members regularly to improve collaboration and work products. Gathering input from employees shows that they are valuable assets to the organization.

Engaging employees in the reorganization process and trusting them to make decisions that would directly impact the organization, communicates that they are valued by the organization. When employees feel valued, they will reciprocate by contributing more to the organization (ex., best work and ideas).

Opower, which I talked about in <Part Two> of this series, used this 360-Degree Feedback approach in a team self-selection process. Originally, they assumed that each team would be assigned one front-end and one back-end developer to carry out the work. When they initially had issues getting the right number of people with the right skills on each team, they asked employees for feedback. Specifically, they asked: “Why did you choose the team you’re on now?” Through this approach, they found that their developers were more interested in growing their knowledge set and learning full-stack development instead of sticking with just front-end or just back-end development. This feedback provided much needed insight into why employees picked their team which ultimately helped further structure the projects teams to meet both the employee and company goals. Furthermore, it increased the employees’ overall satisfaction with the process and the team they ended up with.

5. Educate Employees on Self-Management

There is often a transition period where employees will doubt that they are truly not reporting to a manager and are responsible for their own work. Some employees may have difficulty transitioning from a task-directed environment to the self-managed environment. This applies to all employees no matter their seniority or position within the company. Managers may find themselves in a new role where they are no longer micro-managing the employees and must learn to give up control and trust that they hired smart, talented people to carry out the job that will provide the intended results. Previously task-directed employees will need to now work within a team to define what and how work is done to meet the company goals and objectives. They will also need to make sure they can manage their work priorities on their own without a manager specifically laying it out for them.

Consider holding training sessions with employees to teach them self-managed work best practices. This will give them the power of knowledge and necessary tools to be successful in the new self-managed structure.

Conclusion

Remember that change is not easy and successful self-managed teams are not created overnight. It will take hard work, dedication, and a lot of time to even implement a change let alone ensure it runs efficiently and effectively. Though it can be time consuming, if done correctly, your organization can get back that time and more due to the benefits of self-managed teams like increased efficiency, higher employee satisfaction, and better quality work products. Also know that while you may have some bumps, you are joining many other organizations that have already made the transition and found it greatly successful for not only the organization, but also their employees, and customers.

This article is Part Three of a three-part series.

Part One: Do We Really Need Managers? Making the Case for Self-Managed Teams

Part Two: Are Self-Managed Teams Right for Your Organization?

two people working on design project

Are Self-Managed Teams Right for Your Organization?

by Danielle N. Paula, Technical Assent consultant

Part Two of a three-part series

Last week, we covered the differences between traditionally managed organizations and organizations using self-managed teams. Now, let’s dive deeper into some of the specific benefits of running self-managed teams, as well as some of the disadvantages.

Benefits of Self-Managed Teams

Benefit 1: Increased Employee Satisfaction

Employees who work on self-managed teams report a higher level of job satisfaction than those in task-directed, top-down management models. Self-managed teams promote ownership and direct involvement. In Chuck Blakeman’s TED Talk “The Emerging Work World in the Participation Age” he discusses why self-managed teams improve employee satisfaction:

“…[people] won’t put up with just having a job, stripped of its humanity. They actually want work, not a job, because work is meaningful. A job only pays the bills. In the participation age, people will work because they can make meaning at work, not just money. Self-managed teams [are] one great way to do that.”

Benefit 2: Higher Productivity and Lower Overhead Costs

A Cornell University case study on the economic costs and benefits of self-managed teams found that self-managed teams were able to complete work in 60-70% less time than working in a traditional hierarchy. The study also found significant cost savings on indirect management oversight costs of up to 75%. These types of savings can be applied directly back into the business to fuel its growth. The savings could be used to employ more teams, provide better salaries and benefits, or invested into the expansion of new and innovative products or markets.

Benefit 3: Direct Information Touch Points

Working in self-managed teams in a flat structure encourages the dissemination of information directly from the business leaders to the team. Leaders often speak directly to teams about the organization’s goals and objectives and encourage questions and feedback. Messages that must go through several chains of command are often inflated, deflated, or mischaracterized, ultimately leading to misinformation. Implementing this type of direct communication can decrease the risk of spreading misinformation and reduces the time it takes to travel to employees. Direct communication also provides better contextual clues for the employee. This supports clearer understanding which leads to more informed decision making.

Benefit 4: Stakeholder Buy-In

Self-managed teams focus on turning employees into stakeholders and managers into leaders. Making this conscious transition strengthens employees’ connection to the mission of the organization. For example, at the recent Business Agility Conference, O2 Agility shared their experiment of using the self-selection process to reorganize their self-managed teams at Opower. Employees were asked to assign themselves to the project they wanted to work on most. Not only were all the teams easily formed in one afternoon with all of the skills necessary for execution, but they also found that 40% of participants chose their team because it was what was best for the company, not what was best for themselves. In addition, 88% of participants reported they were satisfied with the team they ended up on and no one said they were dissatisfied.

Benefit 5: Empowerment to Make Decisions

When employees are empowered to make decisions, it can have a direct effect on the organization’s bottom line. In self-managed teams, employees are trusted to use their judgement instead of pushing information up and down a chain of command for approvals. By eliminating the necessity for elevating issues through several management channels, solutions can be implemented more efficiently and effectively.

Fast turnaround can be particularly important in customer service departments. You’ve probably had at least one frustrating call with a customer service call center, where a complaint had to go through several levels of management before a resolution was found. The speed at which a dispute is resolved can directly impact the customer’s perception of the organization and lead to the loss of expansion of its customer base.

As an example, Dave Carroll, a Canadian singer/songwriter, found that after taking a flight on United Airlines that his beloved guitar was broken in transit. United Airlines shuffled his claims requests around for more than six months without providing a resolution. In response, Dave took to YouTube and recorded a trilogy of songs: “United Breaks Guitars”, “United Breaks Guitars 2”, and “United Breaks Guitars 3”.

These three videos combined have over 19 million views on YouTube. Dave Carroll even has a page on his website dedicated to the issue. United eventually contacted Dave and offered to pay him to take down the videos. Imagine the outcome if the United service representative was empowered to resolve the issue when the incident was first reported.

Disadvantages of Self-Managed Teams

While there are lots of benefits to self-managed teams, they are not without their disadvantages. Here are a few.

Disadvantage 1: Employees must be Self-Motivated

The number one assumption an organization must make when adopting self-managed teams is that all employees can and are self-motivated and want to be self-managed. This means that the employee must have the drive and discipline to take on the necessary work without much direction. These types of employees are self-starters that can be trusted to accomplish organization and team goals without much supervision. They need to be comfortable with not having a clearly defined SOP or way forward to complete a task often developing the solution themselves.

While there are plenty of people that have these qualities, there are also plenty without. Organizations will need to carefully evaluate the people they hire to ensure they have these qualities. Additionally, team members should be encouraged to provide 360 feedback on each other’s performance to identify if team members are disengaged or not adequately supporting the team.

Disadvantage 2: Groupthink

Being self-managed can sometimes lead to “groupthink” where team members are at risk of going along with the majority instead of conducting thorough evaluations of proposed plans and solutions. Teams can combat this by encouraging team members to ask “Why?” SEMCO, a successful Brazilian manufacturing company, encourages their employees to fearlessly ask “why?” SEMCO believes that encouraging employees to ask “why?” encourages them to think thoroughly and creatively which leads to the best results for the organization as a whole.

Disadvantage 3: Not Suitable for Large Teams

Self-managed teams work best when they are small. The generally accepted team size usually falls between four and 13 people. Teams don’t work well when there are too many people. This increases bureaucracy and slows down the decision processes. Think about meetings or working groups you’ve participated in, in the past. Did you make well-analyzed decisions more quickly when there were five people or 30 people? The more team members you have the more communication paths are opened. If your organization requires larger teams to come together to make decisions, you may need managerial input to direct and manage the decision process or risk that the large self-managed teams will slow down the process and decrease productivity.

Conclusion

Removing managers and creating self-managed teams within an organization can be a great way to increase employee engagement and increase the organization’s efficiency. While there are disadvantages to this type of organization structure, with the right implementation, the benefits far outweigh them.

Next week, I’ll be covering some tips for making the transition to self-managed teams.

Part One: Do We Really Need Managers? Making the Case for Self-Managed Teams.