www.bevingtongroup.com Business Model Design • Process Improvement • Change Management Australia and NZ patents, US and Canadian Patents pending Presented by: Roger Perry, Managing Director, Bevington Group The Agile Organisation The What, the Why, the How
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The Agile Organisation - Bevington Group · As discussed, broadly speaking, four types of Agile are in serious play Technology related Agile projects Non-technology Agile projects
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www.bevingtongroup.comBusiness Model Design • Process Improvement • Change Management
Australia and NZ patents, US and Canadian Patents pending
Presented by: Roger Perry, Managing Director, Bevington Group
❑ Speed: by bringing critical team members together solutions evolve more rapidly
❑ Decision making: the decision making model is simplified in Agile, so that the decision maker/s interacts directly with the team, and make decisions within the Agile sprint timeframe
❑ Creativity: Bringing different perspectives into the room can lead to a much richer solution set
❑ Shared understanding: where cross-functional teams share the same understanding of the problem and the potential solution then implementation tends to go more smoothly
❑ Risk reduction: as well as the reduced implementation risk (from shared understanding) there risks of design flaws are reduced because the solution can be tested with critical players in the room
One form of Scaled Agile is the application to turn-arounds*
❑ There is a “flawed” assumption that crises require tight command-and-control from the top
❑ However, HBR has reported that command-and-control systems work best when operations are stable and predictable, commanders have greater knowledge potential solutions, centralised decision makers handle peak decision volumes, and sticking to standard operating procedures is more important than adapting to change
❑ This is not the context for natural disasters, turn-arounds and not even the context for many contemporary business problems. In such rapidly changing contexts “central command” could easily become a bottleneck or become paralysed by information overload
❑ So, unsurprisingly, natural disaster teams are increasingly turning to agile team structures and methods to make a difference
❑ Turnaround deployment of agile teams is now also becoming more prevalent
Australia has its own examples of this type of agile organisational application
❑ WorleyParsons, a global engineering and construction firm that specialises in oilfield and other energy-related projects
❑ In 2015 demand for WorleyParsons’ services crashed
❑ After several rounds of cost-cutting proved insufficient to stabilise the organisation, hundreds of individual projects were established
❑ Most of these teams operated in an agile manner with work structured in sprints, discipline in decision making, backlogs, daily huddles and other tools
❑ Senior leaders helped clear away obstacles and tracked the teams’ results
❑ In the first 100 days, the firm increased its cash position by 20%, reduced its net debt, and registered a $120 million gain in anticipated profitability. After just one year, margins had increased by five percentage points, cost savings totalled $400 million (on an addressable cost base of $1.2 billion), and the stock price was up more than fourfold
❑ This is an example of leaders enabling the change that needs to happen rather than defining every solution
▪ A Business Operating Model is the combination of roles, skills, structures, processes, assets and technologies that allow any organisation to deliver on its service or product promises
▪ It is in effect the way the business is set up to deliver VALUE (both in terms of the customer and in terms of the business)
▪ The aspirational view of how the business is to be set up to deliver against future or changing markets, environment and technology demands is sometimes called the Target Operating Model
What is a Business Operating Model?
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BAU Agile can touch all elements of an operating model
These benefits can be observed in more traditional metrics*
❑ What if a company could achieve positive returns with 50% more of its new-product introductions?
❑ What if marketing programs could generate 40% more customer enquiries?
❑ What if human resources could recruit 60% more of its highest-priority targets?
❑ What if twice as many workers were emotionally engaged in their jobs?
❑ These are the sorts of benefits sought by Ericsson
❑ Ericsson has over 100 small teams working with its customers’ needs in three-week cycles. The result is faster development that is more relevant to the specific needs of the customers. The client gets value sooner. Ericsson has less work in progress. And Ericsson is deploying one to two years earlier than it otherwise would, so that its revenue comes in one to two years earlier.