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Automotive Business Agility Playbook

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Automotive Business Agility Playbook Automotive Business Agility Playbook Altran Innovation Factory VISUALIZE ITERATE EXPERIMENT SELF-ORGANIZE TO SEE TO MOVE TO IMPROVE TO SCALE Business Agility is the ability to compete and thrive by quickly responding to market changes and emerging opportunities with innovative business solutions. Dean Leffingwell, the creator of Scaled Agile Framework SAFe® (2020) Automotive Business Agility Playbook 2 A Playbook to Drive Business Agility in the Automotive Industry Kick-off is done. Some games have already been played. But the race for championship is still open. The future mo- bility market has become a different league. New competi- tors such as Tesla and Google position themselves as can- didates for the cup. But one thing is still true: anyone who rests during the current state or thinks too soon about the championship will be punished. If you want to concentrate on the success of the next game by taking the next steps toward the agile transition, this playbook presents the right moves. It provides hands-on options for immediate use to encourage business agility at all levels of your organization. In today’s mobility market, where autonomous taxis are a reality1 and we will see flying cars within the next three years2, the most important capability is the speed with which an organization can sense and respond to the needs of its customers. We will skip over the obvious sense of ur- gency to innovate, because we assume that everyone who finds this playbook understands the need to keep up in this regard. We will not talk about culture or cultural shift, be- cause that's the natural result of changed behaviors and not the other way around. Instead, we will focus on hands-on practices to accelerate learning throughout the whole or- ganization. Because innovation is nothing more than learn- ing to do things differently. That’s it, let’s start. 1 Waymo’s Autonomous Taxi… (12/2019) https://www.bloomberg.com/news/articles/2019-12-05/waymo-s-autonomous-taxi-service-tops-100-000-rides 2 Uber and Hyundai are planning to offer flying taxi rides by 2023 https://www.techradar.com/news/uber-and-hyundai-are-planning-to-offer-flying-taxi-rides-by-2023 Automotive Business Agility Playbook 3 Content 1 The Field and the Plays ...................... 6 5.3 Experiment to Improve ................. 27 2 Business Agility ................................. 8 5.4 Self-Organize to Scale .................. 31 3 Agility Starts at the Top ................... 11 6 Putting All Together ........................ 36 4 The Role of the Coach ...................... 12 7 Case Study ....................................... 36 5 Plays ................................................. 12 7.1 The “Plays” at a leading OEM ...... 36 5.1 Visualize to See .............................. 12 7.2 Activities of an Agile Coach ......... 39 5.2 Iterate to Move .............................. 21 8 Final Whistle .................................... 41 The Authors Frank Schultheiss Dr. Roland Wolfig (Case Study) Dr. Holger Dierssen (Case Study) Thorsten Wefers (Article 5.2.4) VISUALIZE ITERATE EXPERIMENT SELF-ORGANIZE TO SEE TO MOVE TO IMPROVE TO SCALE Automotive Business Agility Playbook 4 Innovation is hard. It’s not only hard to come up with a commercially successful innovation, but it’s even harder to build an organization capable of creating such innovations time and again. Harvard professor Gary Pisano in CREATIVE CONSTRUCTION – The DNA of Sustained Innovation (2019) Automotive Business Agility Playbook 5 1 The Field and the Plays This playbook is designed for all positions. It offers specific options for action at different flight levels: from strategy to portfolio and team level. Inspired by the playbooks in Amer- ican football, where players can find their team's plays, this playbook introduces moves to encourage business agility at all levels of your organization. The goal is the same: vic- tory in the competition. Why not start with an analysis and a sixty-page assessment paper? Isn't that the foundation for designing a solid inno- vation strategy? It’s a considerable approach. Most of com- panies do it anyway. The interesting thing in that is, the out- comes of such kind of assessments are quite similar. The probability is very high that your organization is missing a tolerance for failure, a willingness to experiment, collabora- tion, flatness and an agile mindset. For most leaders and employees this is nothing new. Just because a threat is huge doesn’t mean that a response has to be. On the con- trary, companies would actually be much better off taking a more incremental approach to transformation over time.3 That’s why this playbook focus on the power of iterations. They empower the capabilities to innovate faster. 3 Discovery-Driven Digital Transformation, McGrath, McManus, Harvard Business Review Issue 05/2020 Automotive Business Agility Playbook 6 Everybody has a plan until they get punched in the mouth. Mike Tyson— in less colorful words: agility comes from responding more quickly than the rate of change of the competition. Experimentation Works – The Surprising Power of Business Experiments, S.H. Thomke, Harvard Business Review Press (2020) Automotive Business Agility Playbook 7 2 Business Agility The outcome of business agility is the ability to innovate: to be competitive and successful by quickly serving market changes and new opportunities with innovative business solutions. In this context, innovations are new and econom- ically successful products and solutions. Based on the Inno- vation Landscape Map of Harvard professor Gary Pisano4, these kinds of innovations can be classified into four cate- gories: • Radical Innovations (new technologies like electric cars), • Disruptive Innovations (new business models like Uber), • Architectural Innovations (new business models and new technologies like E-Scooters), and • Routine Innovations (existing technology and business model like regular next models of a car). Business Agility is required to explore the Innovation Landscape Map Fig. 1: Innovating “outside the home court”: radical, disruptive and architectural. 4 Gary Pisano, CREATIVE CONSTRUCTION – The DNA of Sustained Innovation, Public Affairs (2019) Automotive Business Agility Playbook 8 Neither OEMs nor traditional suppliers are able to fully de- fine the technological requirements of new systems in ad- vance5. New technologies, business models and markets obviously have many uncertainties. Economic success can- not be planned on the drawing board, just as in a football match not all moves can be planned in advance, without paying attention to the course of the game. Long-term plan- ning is replaced by a selection of options that are validated during implementation and adapted to reality6. Good Bye Plan, Welcome Iteration New options have to be gained from shorter learning cy- cles. This iterative approach is the foundation of innovation. The speed at which a company can run through these learn- ing cycles defines the degree of business agility. For the "fast game" it's required that everyone along the value stream, from the management to product development to marketing, finance and others, understands agile methods and, if necessary, can also apply them in order to continu- ously provide innovative, high-quality products and ser- vices faster than the competition. Cross-functional teams that have all the skills to develop in- dependent solutions have established themselves as the standard for fast innovation cycles. The traditional line or- ganizations with their hierarchical functional silos slow down due to long decision-making processes and delayed handovers. While some OEMs are already lining up, most of them are far behind regarding agile and fast software de- velopment as well as the necessary changes in the value streams7. The moves in this playbook are designed to grad- ually improve business agility at all levels of the organiza- tion through hands-on options for action and accelerated learning cycles. 5 Automotive Software and Electronics 2030 White Paper, McKinsey & Company (2020) 6 A Refresher on Discovery-Driven Planning: https://hbr.org/2017/02/a-refresher-on-discovery-driven-planning 7 Automotive Software Quality - Was OEMs heute für morgen beachten müssen, Deloitte White Paper (2017) Automotive Business Agility Playbook 9 Every sports team needs a coach. The same goes in business. Any company that wants to succeed in a time where technology has suffused every industry and where speed and innovation are paramount, must have team coaching as part of its culture. Eric Schmidt, “Trillion Dollar Coach: The Leadership Playbook…” Alphabet Inc. (2019) Automotive Business Agility Playbook 10 3 Agility Starts at the Top Some leaders get it, others need to. For organizations to em- brace agile ways of working, their senior executives have to change their ways of working. There’s a lot at stake. Entire companies, or divisions of companies, are making huge in- vestments in transformation programs in pursuit of agile’s many benefits. These include greater speed, better product and service quality, lower costs, and heightened customer ori- entation. But if leaders don’t change their own behaviors, they will limit the return their companies can realize on their agile efforts.8 An organization’s managers, executives, and other leaders are responsible for the adoption, success, and ongoing improve- ment of the competencies that lead to business agility. Only they have the authority to change and continuously improve the systems that govern how work
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