Which 3 important steps can make or break your Agile Transformation? Pierre Berrocal, Consultant Initio – Square group Contents Introduction ............................................................................................................................................................ 2 Scaling ..................................................................................................................................................................... 3 Business and Operation Integration ....................................................................................................................... 4 The ING Case ....................................................................................................................................................... 5 Facilitators .............................................................................................................................................................. 5 Dare to fail, fail FAST! ............................................................................................................................................. 6 Conclusion .............................................................................................................................................................. 7 About the Author .................................................................................................................................................... 7 About Initio ............................................................................................................................................................. 8 Contact ............................................................................................................................................................... 8 Initio Belgium .................................................................................................................................................. 8 Initio Luxembourg ........................................................................................................................................... 8 1 Introduction The traditional finance industry is experiencing an increasingly tougher competitive market. Not only are new Neobank-disruptors offering new flashy products with state-of-the-art customer journeys. They are also lean, efficient and smart. Therefore, banks are pushed to innovate and change the traditional “control & command’ leadership Agile is offered as one of the puzzle pieces that banks ought to implement to stay in the game, and the industry listened. However, change is not an overnight process. It usually takes two to three years for a large organization to transform, and even after this period of time the transformation is not fully completed. As shown in the ‘International Agile Maturity’ study led by Initio on a panel of 256 teams representing 5000 people in the financial industry, banks that initiated their Agile Transformation do not consider themselves fully Agile, yet. Sure, on paper, their project managers are called Product Owners and someone is promoted to ‘Scrum Master’ and gets to play around in ‘Obeya rooms’ with white boards, and log their issues in Agile softwares such as Agile Central, Jira and others. However, Agile is more than using new Agile can also be part of the toolbox, to produce a better tools. You cannot become truly Agile business outcome, while being absent in the headline. Such without shifting the whole working case can be found in Barclays, who specifically avoided words culture of the bank, a process that can as “Agile” or “Transformation” (implying involuntary change), take months if not years. Moreover, to use the term “Better Value Sooner Safer Happier”. experience (and study) has taught us that companies that implement Agile “There are various principles we look to apply – ‘Agile’, ‘lean’, often have to deal with three recurring ‘design thinking’ and others – but our eye is primarily on the bottlenecks: scaling, business outcomes. Our goal is not Agile for Agile’s sake. We’re here to integration and middle management. help teams deliver better business outcomes using tools such as Agile. Those outcomes are summed up as “Better Value Faster Even after avoiding all the bottlenecks to Safer Happier.” an Agile Transformation, it’s worth remembering that not all projects in Jonathan Smart, Head of Ways of Working at Barclays Banks should be submitted to the Agile approach. For instance, Operations in a payment factory are already optimized to the maximum, and follow a very strict process flow dictated by AML1 and Compliance rules. Applying the Agile methodology in such case may not be the correct approach. International Agile Maturity Study Test as part of the Sprint 1 Documentation Language 2 Celebrate Sprint results and Team events 1 Use collaboration & communication tools 3 Standup with Team and the Agile Board 1 Retrospection meeting with Team 0 Functional knowledge transfer 1 Scope /Business Case Intro to the team 2 0 0,5 1 1,5 2 2,5 3 2 1 Anti Money Laundering 2 International study on agile maturity, Initio, 2016, https://www.initio.eu/blog/2019/10/16/international- study-on-agile-maturity 2 Scaling Applying Agile to a team or a domain could be achieved with rigor and good will but when it comes to change every level of a company to embrace a global transformation challenges are way more complex. If we look at BNP Paribas Fortis, they started first by applying the Agile method to their Enterprise Channel teams, producing excellent results, notably because: • The teams were able to develop products independently, releasing part of software without impacting the mainframe of the enterprise (such as a new layout to their banking app). • The senior and middle management understood early the need for change, and acted as true change champions. • The scope of the pilot was limited, allowing the teams to fully manage their workload within their own budget, and setting the development goals achievable within the pilot. As small pilot projects cannot be replicated at the company level, any company committed to change for an Agile methodology or global framework shall account inter-tribe planning, implement transversal collaboration within the whole organization and adapt the budget allocation processes for instance. And that is the path BNP Paribas Fortis chose to follow. The bank chose a mix between the Spotify model and the Scaled Agile Framework (SAFe), to keep the Agile Way of Working at the squad level, but also to provide a needed structure to leverage the benefits of an Agile company. From the top, the senior management has a crucial role in the transformation, as their vision must be understood by the whole company and embodied at each level of the company to allow teams to work towards the same goal. But also, by providing the tools, such as widespread use of cloud to deliver the speed and repeatability required to respond quickly to customer demands. A large company opting for Agile is more than a superposition of Agile teams. Each team needs to fully understand the strategy, following a global vision. This global vision guides the individual team developments. From the bottom, the framework allows regular contact between different squads and tribes. Those ceremonies help sharing good practices and improve the cross-tribe coordination in the frame of budget provision and identifying interdependencies. In summary, the evolution from an Agile pilot to a fully scaled organization requires carefully planning, and its success depends from the interaction between the management and the local teams. 3 Business and Operation Integration There are different levels of Agile Maturity. If an enterprise implements Agile only within their IT , but without the Business, they may end up with a two-speed machine. For instance: • On one hand, the Marketing department will design a new product, they will take care of the vision, the business analysis, and in some cases the functional analysis. The testing will be done at the end of the product development cycle, when it’s fully featured. o The testing at the business level is an acceptance testing: Did we build the right thing? Is this what the customer really needs? • On the other hand, IT will design the architecture, develop and test the features included in the sprint. o The testing at the IT level after the sprint is a functional testing: Did we build a correctly working product? Does the software meet the business requirements? This two-speed machine creates frustrations for all involved parties: • For the Business: One of the fallouts of Agile in this case, is the lack of documentation and reporting produced by IT. So, for the Business, Agile is a black box • For IT: They have no input on the final products, and they feel like a “delivery machine”. They have no incentive to give feedback during the production cycle: The Business believes IT does not know what the client really needs or wants, so they have no say about the matter. As consequence, an Agile Transformation without properly integrating the Business: • Does not enhance the capability to respond more quickly to new opportunity: The time to market is unchanged • Does not return higher customer satisfaction: Feedback from customers is done at the end of production • Lower employee satisfaction: Due to frustrations. To avoid the problems below, we need a higher level of maturity, beyond the IT integration. What a company needs to succeed when getting involved