Agile transformations have become the Holy Grail of business initiatives. Every company wants one, but few business leaders understand how to get there — or where the journey begins.
As I discussed in my last blog on this topic, I’ve been fortunate to work with several organizations as they have gone through this process, and over time I’ve identified seven dimensions or attributes that make or break an Agile transformation effort.
The most important dimension is alignment. Alignment must come first because it sets the stage for all future activities tied to this effort. If everyone on the team isn’t aligned behind clear measurable goals for transformation, they will work at cross-purposes which will make it impossible to succeed.
You Think You Are Aligned — But You’re Not
Business leaders talk a lot about the importance of getting employees aligned behind the company vision and its strategic business goals. To do this, they may communicate the goals to employees through corporate reports, company-wide emails, and town hall meetings, assuming that’s enough to get everyone on board. However, somewhere along the way, the message inevitably gets diluted, and as a result, those vital goals become misaligned.
This misalignment generally happens for one of three reasons:
The strategic goals and vision are never truly communicated to employees. The leadership team may share a broad message about “driving growth” or improving revenue, but without details, teams and employees can’t see the connections between the work they do every day and big picture goals of the business. So they continue doing what they’ve always done and the transformation can’t occur.
The goals are communicated initially, but are never reinforced. Unless a vision is discussed as part of every plan and workplace decision, employees’ focus will shift back to near-term tasks and the old way of doing things — even if they don’t align with the transformation goals. For example, employees will focus all of their efforts on an objective that is nearing its deadline even though that objective isn’t aligned with the transformation goals.
The goals rely on confusing terminology. When executives use vague or unclear terms to define strategic goals and how they intend to measure results, it causes teams to think they are aligned, but to ultimately make decisions that are counterproductive. This is one of the most common missteps that derails a company’s ability to drive efficiency, agility, and value into their workstreams. It occurs because companies tie their strategic goals to measures of output rather than outcome.
The Trouble With Output
I recently worked with a healthcare analytics company that wanted to transform its auditing processes to generate more value as part of a broader strategic effort to grow revenue. Prior to introducing the concept of alignment, the auditors were tasked with “increasing leading indicators of revenue” as a way to generate more value and growth. As auditors, their key leading indicator was identifying claims that were incorrectly processed, because it translated into recoverable revenue, so that’s where they focused their efforts.
The problem was that it unintentionally biased them toward new clients. When new clients come in, they bring three years of back data for auditors to review, which meant there was a lot of potential for finding incorrectly processed claims; whereas current clients only deliver a month of data, and over time got better at correctly processing claims.
This resulted in a measurement system that rewarded auditors for focusing more time on new clients and lowered the perceived value of existing clients, which was counterproductive to the goal of growing the business. It also caused the team to repeatedly miss targets.
These kinds of misalignments happen when teams are left to translate strategic business goals without clear guidelines or relevant measures to track progress. As part of an Agile transformation, we encouraged this company to implement objectives and key results (OKRs), which is a structured process that leaders can use to set measurable, outcomes-focused business goals, and monitor results across the organization.
Once we brought OKRs to this organization and identified the areas of misalignment, we were able to define two separate outcomes-focused measures that would drive value for the auditing team. Within two quarters the department was exceeding its growth targets and had more satisfied customers.
Be explicit in what you measure, and how you measure it. Establish outcome-based measurements, and track progress to demonstrate incremental improvements over time, or to identify where objectives are misaligned. Once you have measures of success, communicate those results across the company, and talk about how they connect to the transformation process, and prove that it is working. These kinds of messages reinforce alignment behavior, and celebrate the people and the objectives that are delivering the best results.
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Andy Czuchry Jr, PhD is a proven business transformation leader with extensive experience driving strategic and operational transformations that significantly increase business-value outcomes for mission-critical objectives. Over the past 10 years of his 25+ year career in business and technology innovation, Andy has led nearly a dozen organizational transformations in national and global organizations spanning across all disciplines, both within and beyond the traditional agile core.
Andy earned Ph.D. and Master’s degrees in Information and Computer Science (Artificial Intelligence, with a minor in physiological psychology) from the Georgia Institute of Technology. He earned his bachelor’s degree from Dartmouth College in Computer Science and Mathematics with a focus in applied algorithm development. Andy maintains numerous certifications in the domains of Agility, Lean Six Sigma, and Program Management. He is the holder of two patents issued by the US Patent Office, as well as a recognized global leader with 20+ peer-reviewed papers published in elite business and technology journals and conferences.