Agile has been revolutionising the IT world over the last three decades, accelerating software delivery and maintainability and improving the engineering practice as a whole. Nowadays, its principles and practices have moved across a broad range of industries and functions. It has proved it can enhance businesses’ ability to manage changing priorities, reduce project costs and improve team morale, among the many benefits it brings.
In the last five years, Agile development is more and more synonymous with digitalisation. As a result, product and service development moves faster, releases come more often and users’ needs, changing ever-more rapidly, are covered.
However, for that faster product and service development to happen, operations and internal processes need to change, so the way the business understands governance, accountability, team collaboration, innovation, people management and success measurement.
In Luxembourg, a major European hub of business, research and innovation, 34% of companies are in the experimentation phase of Agile adoption, while 12% stated to have integrated the methodology within the different company units, according to a joint PwC and PMI study.
The number might seem quite small certainly, but if many in distress makes sorrow less, the adoption of agile at world level still has a lot of room for improvement.
According to a global survey, only 12% of respondents—30% of the survey sampled were European organisations and 19% were in the financial services industry—mentioned having a “high level of competency with agile practices across the organisation”.
The latest “How Agile are companies in Luxembourg” survey shows that businesses are more keen on incorporating both digital technologies and agile ways of working into their operations compared to a similar study released in 2017.
What about the other 85%? What is holding these businesses back when it comes to adopting a methodology with such promising advantages? In this article, we delve into understanding the challenges companies face when implementing Agile and what we’ve learnt so far from Luxembourg businesses betting on this methodology.
Legacy can be a trench
Well-established companies have a legacy to maintain, traditions to uphold and a reputation to preserve.
Reputation is a result of being predictable; it is the certainty clients have on a business’ delivery capabilities. However, predictability is, sometimes, a double-edged sword. True, it is reputation’s strong pillar, but it often translates into sticky processes that are embedded not only in operation manuals but also in the collective memory of a company. Even more, if that status quo has led the company to success over an extended period, change feels dangerous or even apocalyptic because many things, including stability and fear of failure, are at stake. When this happens, those who guard the status quo see innovation as a risky trick for start-ups.
For decades now, companies have tended to organise internal work in silos. Questioning that way of organising business isn’t this article’s goal, because that likely responded to the context of the times. But time also brought us digital, a technological Attila’s horde that is shaking the ground on which we live and how we do business, how we learn and even how we understand humanity. It is threatening our way of life.
A different team for every business operation is the very definition of working in silos. A testimony of this mindset is understanding Agile as a methodology only used by engineers, software developers or R&D teams. In that realm, the senior management sets the digital goals, expecting IT departments to deliver on them.
A company’s internal silos are going to have a problem functioning in a world where humanity becomes (which it almost already is) an “everything is connected” reality, because that is also transforming what clients expect from companies in terms of design, speed, service and the overall experience. And so are the methodologies required to reach those expectations.
That’s when Agile becomes very handy. Multidisciplinary and cross-departmental work, almost by default, equal Agile and don’t talk the same language silos do. Silos be gone, your days are over.
One could say the challenge of implementing the Agile methodology is to make all those verbs come together and integrate them into the business culture to solve both operational and performance issues. That is, in fact, a valid point of view.
Nevertheless, Agile isn’t a wizardry solution to overcome all of a company’s innovation problems or operational challenges. Instead, it’s an enabler whose principles end up triggering a reflection on the status quo and on why processes—and things, in general—are done the way they are.
The bet on the Agile methodology elicits change in the way and speed businesses create, interact, deliver and think . That can happen at business area level, unit level or firm-wide. Ultimately it is a management decision. Agile’s adoption, like any other new-to-the-business methodology or strategy, requires decision makers’ buy-in and support. Another crucial element to broadening agile scale is to match investment to ambition.
Being agile isn’t the ultimate goal, but a process one; growing the business, improving client satisfaction and employee retention always remain any business’ ultimate goals.
Agile’s soft skills
There is a growing discrepancy between the job market and business needs, an issue that affects all industries and companies of all sizes.
Implementing the agile methodology has its talent challenge too. Since businesses need to update or even change organisational processes and ways of working, the workforce’s readiness becomes a top priority to be able to support that change.
Soft skills, often put in the “nice-to-have” box, become a must-have. Companies want to rely on training and upskilling programmes to prepare their workforce for ways of working where constructive critique, ambiguity, adaptation, openness and an “in-progress” mindset are key for interdisciplinary work to become possible.
Effective communication, conflict resolution, crisis management, diversity and inclusion, time management, relationship building, teamwork and flexibility, are among the soft skills to think of that a business wants to have for a better and larger implementation of the agile methodology.
This switch-up will push individuals to develop their adaptability, embrace ambiguity and explore new ideas and possibilities with curiosity and enthusiasm, broadening problem-solving and analytical thinking.
The hidden benefit of implementing Agile
Companies in Luxembourg believe that dialogue, cross-functional collaboration and the continuous involvement from end-users are the most important benefits of Agile.
But is that it?
The business world is changing. There’s a need for a more flexible way of working. In the case of Agile adoption, it’s a collateral benefit.
By breaking through the traditional organisational silos, people are motivated to leave their comfort zones as they interact with different departments and teams. As they leave their functional silos and are put in self-managed and customer-focused multidisciplinary teams, the quality of life at work improves. This is a collateral benefit when implementing Agile.
The future’s looking bright too, with companies expecting to see a more mature Agile practice and adoption in the near future. Indeed, a quarter of the PwC and PMI study’s respondents expect their PMO function to integrate Agile in their programme as well as project portfolio management in the next two-three years. Reduced delivery time, growth in productivity and competitiveness and overall product and services quality improvement are a few objectives in the horizon.
What we think
Thierry Kremser, Data Analytics and AI Leader at PwC Luxembourg
Over the years there was a strong evolution in the perception of Agile, changing from an IT project methodology to more as a state of mind, a philosophy. This change occurred because the business environment and needs are changing. There’s a need to adjust faster to the market, to do more and better. Traditional ways of doing business require time to plan ahead, and the question now is if we have time anymore. For businesses to succeed, leaders need to give up the governance control they currently have, and accept that people will be able to make decisions without them.
What to know more about Agile in Luxembourg?
Listen in to our podcast The One where we go Agile with Thierry and Nassos Karageorgiadis, member of the board of directors at the Project Management Institute in Luxembourg.
