Bain & Company: Are you doing agile right?
To help us better understand how companies can do agile right, Ray Wang, CEO and founder of a Silicon Valley-based advisory firm Constellation Research, and I invited Sarah Elk of Bain & Company to join our weekly show DisrupTV.
Elk is a partner and the global leader of Operating Model practice at Bain & Company, as well as a core member of the Retail practice. With more than 20 years of consulting experience, Elk is passionate about transforming large companies, especially those experiencing technology or business model disruption. Elk has deep transformation experience at the intersection of organization, Agile, performance improvement, leadership, and change management. Throughout her career, Elk has advised business leaders across a wide range of industries, including retail, technology, healthcare, consumer products, automotive and aerospace and defense. Her client portfolio includes several Fortune 50 companies. She is the author of Doing Agile Right.
Bain & Company thought leader Darrell Rigby and his colleagues Sarah Elk and Steve Berez provide insights into their new book about the importance of doing agile right. The book highlights the impact of agile on improving influence, making people's jobs more rewarding, accelerating innovation velocity, and transforming both companies and individuals in terms of creating value at the speed of need. The book emphasizes the importance of maintaining balance -- optimization of operations and innovation agility.
Sarah Elk is a partner at Bain & Company and the co-author of Doing Agile Right.
"Agile, done well, enables vigorous innovation without sacrificing the efficiency and reliability essential to traditional operations." -- Sarah Elk
Here are the key lessons learned from our conversation with Elk:
- Companies are more focused on speed to value since the pandemic. Elk talked about sporadic agile before the pandemic to systematic agile that is now needed to ensure optimal execution velocity. Companies need to breakdown the silos, be clear on the mission, align resources, and change our operating model to deliver systematic agile capabilities.
- Agility is a set of principles and mindsets, as well as a set of practices. Elk defined agile with respect to velocity (speed and direction) and specific methodologies regarding agile teams. The unique and differential ways of using agile practices, and the specific team, and the operating model, including funding, planning, review process, collaboration models, leadership principles, core values, and overall organizational culture all play a role in doing agile right.
"Agile isn't a goal in itself; it's a means to becoming a high-performance operation. Doing Agile Right is a must-have guide for any company trying to make the transition--or trying to sustain high agility." -- Sarah Elk
- Balance is about running your business and changing your business. Changing the business about testing and learning, increasing variability, and prototyping. Running your business is about reducing variation and following standard operating procedures. Agile teams must be tied to your strategy. Leadership must set clear and specific outcome-oriented objectives for their teams so they know what they are testing and learning against. Agile teams must be aligned with the operational teams. It is not about just changing or running, but rather harmonizing the activities to scale the necessary changes.
Bain (@BainAlerts) partner and author Sarah Elk speaking about agile innovation in the Next Normal https://t.co/iRpXnlembO
— Vala Afshar (@ValaAfshar) August 28, 2020
- Agile teams must be inside the business units that they are trying to disrupt.A lot of companies place agile projects on the side, rather than sponsoring the work and embedding the agile teams inside of the business units. Agile teams need access to expertise, so it makes sense to align the disruptors with the existing teams and their expertise. It is not about the idea. It is about developing and implementing change that improves execution velocity by 100X.
- Agile is not about cost-cutting and copying what works elsewhere.There is a lot of bad agile implementations. Agile is about innovation, speed, and growth. Companies have given agile a bad name. Agile teams can make work more fulfilling for employees Agile teams can help the c-suite to be more connected to the front-line teams. Agile can improve customer satisfaction and user experience. Elk talked about testing and scaling what works. Culture, process, talent, and use of technology all need to do agile right. Again, this is about a set of principles and practices. Elk talked about retail, financial services, and CPG as industries that have the greatest adoption of agile -- industries ripe for disruption. Elk sees up to 40% productivity gains with companies that are doing agile right.
- Define your agile ambition. The demand for the pace of change is driving agile adoption. How agile do you want to be? What does good agile look like? The agile leadership team includes strategy and operational support and advocacy. The CFO must make VC like bets, while not disrupting annual planning. Resource allocation and strategic prioritization have to change. This is a leadership challenge for most companies. Companies must avoid agile theater and actually commit to agile.
- When you are in a learning mentality and set bold strategic objectives, you see the potential to where you want to go. Elk referenced several companies that are doing agile right. The book includes numerous companies in each chapter. Companies should not declare victory with agile. Agile is a journey, not a destination.
- Agile companies are adapting to change faster. Companies need to adapt and change. Agile companies are pivoting faster and aligning more effectively with their strategic priorities.
- Speed to value leads to relevance and trust. Elk talked about the importance of an adaptable roadmap to create value at the speed of need - stakeholder need.
I highly encourage you to watch our conversation with Sarah Elk and consider reading Doing Agile Right, a wonderful book with numerous use cases that highlight how agile really works, what to avoid, the importance of scaling agile correctly to gain full benefits.