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From Lean Startup to Agile Enterprise

Oct 17, 2014



Don't forget to check out my latest book, Directing the Agile Organisation (, if you like the ideas raised in this presentation.

From #AgileIndia2014

Traditional models of management and corporate governance are failing to keep up with the needs of the modern economy. Change, both technological and cultural, is occurring at faster rates than ever before. In this climate, modern enterprises will live or die on their ability to adapt. This is where Agile, and Agile Business Management, come in. Agile is change; changing how you think, changing how you work and changing the way you interact. This is important whether you are a software developer or a CEO.

In this presentation, Evan will provide engaging and enlightening case studies of Agile beyond IT; from lean startups to large enterprises. These will be reinforced with practical approaches for the leadership of teams, divisions and businesses.

Taking the successful concepts and methods from the Agile movement and Evan's new book "Directing the Agile Organisation", Agile Business Management is a framework for the day-to-day management of organisations regardless of industry, size or location. We will discuss processes, techniques, and case studies for the 4 key domains from Agile Business Management;

1. You, the Agile Manager - What makes a good manager and how do their responsibilities change?
2. Integrated Customer Engagement - Collaboration and communication techniques to build trust and deliver Customer needs efficiently, with minimal waste, and to everyone's satisfaction.
3. The Structure of an Agile Organisation - Efficient, transparent and collaborative techniques to manage empowered staff.
4. Work, the Agile Way - Managing all types of business functions, from software, HR, finance to legal, by using Just-In-Time planning and Incremental or Continuous Delivery processes.

Ultimately, the goal of this presentation is to make you think about your role as a leader.

Slide 1

From lean startup to agile Enterpriseevan LeybournGood morning,

Lets start with an informal survey. Hands-up if any of you have heard the terms Agile or Lean in the context of software or manufacturing?

Great, now I want each of you to put some of your preconceived ideas aside.

For those who dont know; Agile is a set of values, principles, techniques and frameworks for the adaptable, incremental & efficient delivery of work. Originally developed for the software industry, they can be applied toany type of workincluding finance, sales, HR, marketing, corporate strategy, leadership, and more.

In the context of the modern economy, conventional models of business management are failing to keep up with the rapidly changing cultural and technological environment and a different approach is necessary.

Enter Agile Business Management; an adaptive approach to business management and corporate governance. Were all here because business growth is important to us. For the next 15 minutes, Im going to provide you with some principles and techniques that focus on business agility as a means of promoting business growth. Ultimately, this can only be achieved by improving communication, collaboration, and delivering continuously while remaining responsive to change.

So, let's start with a simple definition. Business growth comes from applying profitability to customer growth. Profitability comes from delivering services to your customers, accurately and efficiently.1Chrysler, Delphi, Texaco, Kodak, LTV, Compaq, DigitalWhat do these companies have in commonThey failed to adapt. They relied on traditional business models & strategies which failed them. Most importantly, they couldnt keep up.2

Evan LeybournLean / Agile Business Leader and AuthorMelbourne, [email protected]://theagiledirector.comCLICK TO DISCOVER MOREAdd ABM/GDAC logo3 interestingWe live in timesUse the Agile Manifesto interestingOnce upon a time, in a country about 10,000 km away

We value individuals and interactions over processes and tools.We value [completed Customer Requirements] over comprehensive documentation.We value customer collaboration over contract negotiation.We value responding to change over following a plan.

4What drives a transformationculture, demand, & strengths Business BusinessOnce upon a time, in a land about 10,000 km away, there was a business.

Now this business had a problem; they were successful.

This may not seem like a problem to you, but this company knew that success in a single domain, does not make for a robust business model, and can be fleeting.

So they looked inward to find ways of being adaptable, of structuring themselves so that they can leverage changing market needs while continuing to deliver to their customers expectations.

Does this sound familiar to anyone.5

Business change via sustained effort across the organisation

ChangeChangeChangeImages shamelessly stolen from Ahmed Sidky (ICAgile)Pre-Agile Learning AgileStage OneDefine your Vision for an Agile Businessyour Goals, Benefits & End StateValidated Learning8Measure your vision for an agile Businessyour Goals, Benefits & End StateActionable Metrics NOT vanity metrics9Communicate your Agile values

Process Driven > Relationship Drivenindividuals and interactions completed products & Services

personal ownership & accountabilityCulture of Transparency

customer collaboration

responding to change

10Develop an Agile recruitment policyTo develop organisational culturePivot & RetrospectivesContinuous business improvementValidated Learning12

Elephant in the RoomNew Zealand Post GroupTransition to continuous deliveryHR, sales, legal, Customer Support, media & CommsMVP

First, you need to understand that agile work, whether it is for an external or internal customer, is built around just-in-time planning and the controlled incremental or continuous delivery of products and services. These approaches allow the organisation to adapt quickly when scope & circumstances change. With both approaches, teams regularly deliver partial, but still functional, products to their customers. Through this incremental approach, the product will continue to evolve as each iteration builds upon the last.

Incremental Delivery is the planning and delivery of related Requirements in short, fixed-time blocks. Whereas Continuous Delivery is the planning and delivery of related, or unrelated, Requirements as they are identified and prioritised. Iterative delivery is primarily used for planned (or plannable) work where the effort to deliver is weeks to years or where there are multiple related requirements. Continuous delivery is primarily used for ad-hoc, or on-demand, work where the effort to deliver is hours to days.

14Transition to Incrementaldeliveryfinance, Marketing, legal, R&D, OperationsMVP

Incremental Delivery: Planning and delivering related Requirements in short, fixed-time blocks.Continuous Delivery: Planning and delivering related, or unrelated, Requirements as they are identified and prioritised.

Continuous vs Incremental workContinuousvs.IncrementalEffortHours to daysWeeks to yearsNoticeOn-demand (no notice)PlannedDeliverSingle requirementsMultiple Requirements with multiple tasksBacklogRequirements BacklogRequirements Backlog and Iteration Backlog

15TRACK, Control & Visualise workflowEnterprise Kanban / strict WIPInitial Organisational restructure cross-functional team structuretakes a long time

For this to work, we need to create an organisational structure that promotes increased communication, trust and empowerment of your Teams while providing a direct connection between the teams and customers. In this context, each cross-functional Agile Team is typically between 5-9 full-time staff, where the whole Team works towards a single, specific outcome.

With self-organising and cross-functional Teams taking personal responsibility and accountability, agile businesses can operate effectively with a lean hierarchy. That is, removing all extraneous layers of management between the CEO, or equivalent, and junior Team Members, whilst still remaining efficient and functional.


Agile Business Management

Minimum Wage EmploymentThis is an important point; staff engagement goes to the heart of agile business management. Though it has its share of criticism, Maslows hierarchy of needs can be a useful model.

Agile Business Management focuses on engaging staff at the level of self-actualisation, by emphasising creativity, problem solving and personal empowerment.18Continuous & targeted coachingmanagers, staff and customersA Corporate LanguagePair Programming Pair WorkDaily Scrum Daily Stand-upScrum of Scrums Summary Stand-upTest-Driven Development Test-Driven WorkSprint IterationProduct Owner Customer RepresentativeScrum Master Team Facilitator

20Early Agile Agile managementstage TWOAn Agile ExecutiveAgile Corporate governance- executive team- committees22An Agile BoardAgile Corporate governanceThe Board needs to be involved in the development of the Agile corporate strategies, and is responsible for monitoring the integrity, and effectiveness, of the Agile Business Management practices. In addition to their legally binding responsibilities, Agile Boards need to apply greater due diligence to the governance of their organisation. This is not due to a lack of trust in their chosen executive, but because an Agile organisation can, and will, adapt and change rapidly. Because of this, the Board needs to work closely with the executive, to remain informed, so they can make appropriate governance decisions.In order to deliver on their Agile obligations, the Board should expect greater transparency and communication from the organisation and the executive. This, in turn, improves their ability to act, in good faith, in the best interest of the organisation and its shareholders. 23

An Executive KanbanNew Zealand Post GroupAgile Key performance indicatorsIs the Customer, or Customer Representative, engaging with the Team regularly?Is there a reduction in identified defects by consumers (note: consumer, not Customer)?Is the Team/person meeting agreed due dates?Are quality control tests occurring during every Iteration?Is the Team engaging with the Customer, or Customer Representative, regularly?Is the Customer happy with the work being produced?Have overhead costs (e.g. additional meetings, delivery/release costs, delays) been reduced?Agile financial managementMonthly budgets and team contingency1Monthly or quarterly budgets: By reducing the duration of each budget, organisations can tailor funding to meet the current needs of a Team, or Department. As most budget proposals will be identical, or nearly identical, to previous months, there is negligible overhead in managing multiple, short, budgets. Teams and Departments are encouraged (and in some cases incentivised) to be innovative with their existing budgets, and, where possible, reduce outgoing expenditure.2Team level contingency: As part of their monthly budget, allocate each Team a contingency budget (usually ~20%) to spend at their discretion, either in the delivery of Customer Requirements, or as a mechanism to innovate change within the organisation. Unused contingency should carry over, to encourage sensible spending, rather than the traditional use it or lose it approach.3Staff welfare: Departmental and Team budgets are planned around ensuring delivery of the Customer Requirements, while maintaining a sustainable workload for each Team. From a budget planning perspective, it can help to visualise your Agile Team as a pipeline, as shown in Figure 48. The width