When the Ground Shifts, It Pays to Be Agile

The companies that emerge stronger out of this epidemic/ crisis will be the ones that address the three critical factors speed, cost and resilience. For all companies reducing cost while doing minimum damage to key functions is crucial with revenue and profits plummeting.

The ability to react quickly to changing circumstances will have a major impact on their ability to contain damage and make most of the new opportunities. Companies have become aware of how fragile of the critical systems they depend on and of the need for resilience. 

Agile moves the needle

Agile method is the corporate capability that can address the three critical factors cost, speed and resilience. The teams are aligned strongly on purpose, strategy and priorities, work independently, improving resilience. The strong connection between teams and goals improves efficiency and effectiveness, faster responses to conditions and shorter time to market. 

An agile organisation can quickly reprioritise product or service development, and adapting to shifting demand. The employees become engaged and committed to the company due to a strong sense of purpose and team, and with transparent goals.

Starting an agile transformation could be a major challenge. Even though many companies have initiated agile practices some time ago, it has been doing incremental changes. In times of crisis, all things that are difficult to address are questioned, sacred cows can be attacked and this would be the right time to accelerate agile development.

What the new normal can look like

There is enough evidence across industries achieves significant savings in terms of cost, accelerated time to market, and better employee engagement. 

Is the timing right?

In a survey conducted it was seen that most companies had initiated agile several years ago and the top management decided to push the pedal. Agile had already been adopted in many parts of the organisation but it was siloed. this invariably happens when the company faces a sudden and serious threat or changes in consumer behaviour or a sudden market shift. In agile companies, the management saw the threat as a catalyst for accelerating agile transformations. 

Setting the stage

There are a few perquisites to accelerate agile transformation. The first is an aggressive target -cost reduction by 20+ per cent, or a substantial productivity increase.

Second, the organisation should have some experience in agile. If the organisation has not started an agile journey, it requires more time to prepare through experimentation.

Third, top management commitment to drastic and structural change., as scaling requires addressing the whole organisation. 

Hitting the gas - Acceleration

If the system is in place, a company can redesign and rebuild an organisation to be better, stronger and faster. It will be better prepared to face the new normal that emerges after the crisis. It can be a standalone or a part of cost reduction or delayering plan.

Implementation

• Develop a new structure Develop a new management structure built around agile teams and principles, create a fair and transparent selection and staffing process with clear purpose and objectives and a backlog of projects.
• Embed new projects The company builds capabilities to support behaviour change and initiates relevant training
• Prepare the MVP operating model Design new roles, career paths, and review system as well as sources of funding and resource allocation. 
• Accelerate data and tech transformation Companies should launch, quicken their technology transformation simultaneously making a transition to a modular architecture. Companies must take on board full-stack engineers who can work in cross-functional teams. It is essential to prioritise bottlenecks and resolve it quickly. 

When the Ground Shifts, It Pays to Be Agile

By Martin Danoesastro, Benjamin Rehberg, David Ritter, Ananth Krishna, Peter Hildebrandt, and Mehran Islam

BCG MAY 26, 2020