Strategy = Execution

Strategy Execution in an agile world

Hybrids: can Agile methods and other methods work together? A false dilemma.

Antal Ruiter, director in the Financial Services Practice of Turner (aruiter@turner.nl) and Jacques Pijl, director Turner Strategy = Execution (jpijl@turner.nl).

As consultants specialising in strategy execution, we often encounter confusion about agile terminology applied to large-scale change on the one hand, and as a framework for organisational models on the other. How do you approach large-scale change and transformation in agile organisations? Can different approaches work together? Why and how should one attempt to transform a traditional ‘factory-type’ organisation into an agile organisation?

We thought it appropriate to set out our point of view and explain that using an agile methodology is not the same as organising yourself using an agile framework. We also want to demonstrate that, to execute a strategic agenda, practitioners should look beyond the limiting constraints of a particular methodology or framework and aim to create benefits and lasting and meaningful change in organisations using a variety of methods at hand. Also, we want to explain why, when, and how organisations should attempt the fundamental transformation into an agile model.

This is the second part of two posts. In the first post we dispelled confusions about the term agile in relation to the often referred to Spotify model. In this second post, we discuss how pragmatism should rule any strategy execution agenda, and how combinations of approaches, so called hybrid approaches, can be used when trying to change organisations. After all, strategy execution is about realizing benefits, methods are a means to an end.

Part II: Hybrids; Can Agile methods and other methods work together? A false dilemma.

Key Takeaways

  • Agile or nothing – beyond dogma
  • Understanding of situations where an iterative approach to change is appropriate
  • Circumstances in which a hybrid approach is necessary
  • The most important lessons and insights from a hybrid approach

Agile or nothing - beyond the dogma

Fortunately, it seems like a long time ago that the Agile police banned traditional program and project management methods and demanded that entire organizations adopt Agile as the only way to effectuate change. There was a time when everything had to be done through Agile, after all, so much time and money were invested in setting up and rolling out Agile frameworks. Entire departments, pools, and program management offices with ‘traditional’ project managers were dismantled as a result. As consultants specialising in strategy execution, we understand how change works: you sometimes must oversteer to end up where you wanted to be in the end. But oversteering has become overshooting in a lot of instances.

“Our strategic portfolio is built upon a change agenda, as well as a maintenance agenda and an innovation agenda. In addition to EPICs, we also have business change requirements that do not have such a clear resource allocation process. With a good balanced scorecard, you should be able to solve prioritization questions, but in practice, that integration is often not well implemented.”

Colette Leeflang, Program Manager Data Governance, APG

But as is often the case, the passage of time softens even the hardest of purists. Various sectors and organizations have since gone through all the stages of institutionalizing change through Agile, or Agile ‘frameworks’ (such as SAFe). This includes sectors like financial services. These sectors and organizations, having learned a lot, have recognized that a dogmatic way of implementation often does not work. Dogmatic in the sense that every change must go through the chosen Agile framework. Some pragmatism, along with the nature of the envisioned change, has made a comeback, and often for three main reasons: firstly, not all change benefits from an iterative approach. Second, in our imperfect world, agile frameworks for prioritizing work have often not been implemented fully; a phenomenon called by one of our clients ‘Agile in name only’. And lastly, managing large-scale change across many (agile or non-agile) teams will always require some form of overlaying coordination, whether within portfolios or within a program. We will expand a little on all three off these reasons.

Understanding the circumstances in which an iterative approach to change approach is suitable

First, let us address the fundamental question: when does it make sense to apply Agile methods? To prevent the means from becoming an end in itself, there are broadly two circumstances in which Agile methods are appropriate. Firstly, when it is uncertain what you want to achieve. Secondly, when it is uncertain how you want to achieve it. See figure 1: Two circumstances where Agile methods are suitable.

If your organization knows what it is that is required or needed, and there is a clear on how to get there, it usually does not make sense to follow an iterative approach, as iteration nearly always involves some level of waste. If, on the other hand, what is required is not clear but the method of how to get there is, then iteration will add value as a tool to decide what needs to be built or changed. The same applies to knowing what you want but not having a clear idea of how to get there: iterating in steps and methods will allow for finding the right approach. Finally, if one does not know what one wants and has no idea on how to get there, then there is a clear need to further refine the need for change and the idea in the first place. Here ideation is a possible approach.

Obviously the above is not an exact science: experience in choosing the right approach is key. And there are other helpful frameworks such as the Stacey Matrix which can help determine which approach is best suited for the job at hand. The key point is that while the Agile approach is valuable and effective in many situations, there are instances where it may not be the most suitable approach. We believe that a hybrid approach is sometimes best: an approach that makes use of Agile methods but combines it with more classic styles of program or project management. Below are some further scenarios, that combine the dichotomies of figure 1, where an Agile approach might not be the best fit and where hybrid approaches are needed.

Twee omstandigheden Agile
Figure 1: Two circumstances where Agile methods are suitable (Turner, 2023).

Circumstances where hybrid approaches are needed


Hybrid approaches combine agile and other methodologies in a pragmatic approach to change. Often, they are a combination of more classic program and project management techniques that help manage and or even control that a large set of changes occur in tandem, whilst at the same time allowing for flexibility within each of the teams delivering part of the change as to the approach they choose or require, e.g. agile or other method. Which situations do ask for these hybrid approaches?

Well-defined requirements

If the project or task has clearly defined and stable requirements from the beginning, and there is little likelihood of changes or uncertainties, a traditional, plan-driven approach might be more appropriate. Agile methods thrive in environments where requirements are likely to evolve and change (i.e. the top right quadrant in figure 1 above).

When strict regulatory or compliance requirements apply

In certain industries or contexts, strict regulatory or compliance standards may necessitate a more structured and predictable approach to ensure thorough documentation, traceability, and adherence to regulations. Agile methods, with their focus on flexibility and adaptability, may require additional effort to meet these compliance requirements (this is an important dilemma in Financial Services organizations, where much change has a regulatory background. We argue that a hybrid approach may be most suited, see below).

When there is a strong resistance to change

Agile methodologies often require a cultural shift, with increased collaboration, transparency, and empowerment of teams. If there is strong r to change or a lack of buy-in from key stakeholders or team members, it can hinder the successful implementation of Agile principles and practices. This resistance should be addressed first, or a different approach should be used.

When there are severe resource constraints, or a lack of availability of key team members and prioritizing work is a key

Many organizations suffer from a lack of prioritizing change, and from making it a strategic imperative to creating a balanced portfolio of types of change.. The principles of agile teams require a level of autonomy, but when a long list of change initiatives compete for resources, management needs to make a call and determine which change is prioritized. Agile projects require active involvement and dedicated resources from cross-functional teams, including product owners, developers, testers, and stakeholders. If there are severe resource constraints or a lack of availability of key team members, it may be challenging to implement Agile practices effectively.

In our first post, we argued that when organizations transform themselves and implement the Spotify model or SAFe framework, prioritization methods are often not implemented well. The result is a messy decision-making process, where competition for resources and skills ensue. In such a messy but realistic world, sticking to Agile dogma is a sure path to failure, because the result may be that many initiatives get only halfway. Here we often see senior management stepping in and deciding priorities and imperatives top-down.

When large scale change has to be coordinated across multiple domains

As strategy execution consultants, we have extensive experience in trying to coordinate change across many teams. A recent example involved more than 80 teams across multiple domains within an organization, some of which use agile development methods, and others that used a traditional waterfall method, all aiming to effectuate regulatory change. Coordinating this type of work involves an overlay and coordination layer that sits on top of the teams but below steering-level management. This overlay highlights issues, maximizes synergies, and ensures all teams make the necessary adjustments within the required time frame. In such large-scale change, there will be individual Product Owners or Business Owners with differing priorities that may not align with the overall program priorities. The overlay must then be able to escalate any arising issues and force prioritization.

When there is a fixed scope and timeline

If the project has fixed and non-negotiable deadlines or a rigid scope that cannot be altered, Agile’s iterative and incremental nature might not align well with those constraints. In such cases, a more traditional project management approach that focuses on detailed planning and strict adherence to timelines may be more suitable.

In short, it is important to assess the specific context, requirements, and constraints of each project or initiative to determine the most appropriate approach, whether it be Agile or another methodology. Flexibility and adaptability are key in selecting the right approach for each unique situation.

“Transitioning to an agile organization is complex and can only succeed if top management truly understands what this means, grasps what can and cannot be delivered, and fully supports it.”

Onno Zwaagstra, former Agile Portfolio Manager, Aegon

An example of a Hybrid approach: a large bank needing to effectuate changes in over 80 domains and systems to conform to a new international payments standard: the changes are critical, both for compliance and for strategic reasons. Some teams need to implement software changes from vendors, others need to revamp and redesign entire propositions and processes. Each of these teams chooses their own approach, and the central overlay for the program instigates a monthly reporting schedule and steering committee in which those responsible for all of the 80 domains are present and therefore full accountability is held. The overlay structure follows a classic program (Prince 2) method. Some of the teams use waterfall planning, others follow agile development. Maximal control and transparency as to the issues and progress of all teams is cycled through every month until all changes are complete.

The hybrid approach, key lessons and insights

As stated, hybrid approaches combine agile and other methodologies in a pragmatic approach to change. What mechanisms are needed to make hybrids work?

What mechanisms to apply to make Agile work together with classic program management.

In the table below we explicit the mechanisms for each role or concept that are at work in both Agile and classic program management and at the same time are the mechanisms to be aligned, making the hybrid approach work.

 

Agile framework
(e.g.. SAFe )

Program management, (e.g. waterfall or MSP )

Alignment mechanisms:

Planning

Planning commitment and turnaround time inviolable – assumes uncertainty about deliverables

Specifications and requirements of deliverables inviolable – assumes certainty on. execution

Agile experts can often make far-reaching predictions.

Program managers structurally build in slack.

Risk management

Relies on approval of changes by risk & compliance parties

Often becomes evident through iterative approach

Involves Risk & Compliance at steering Committee level

Becomes evident through focus on the long-term risks and mitigations

Involve risk and compliance in project teams, and ensure objective (second line) judgement is held separately in Steering Committee

 

Impact and throughput time

Critical path, escalation path

Build space for strong governance and executive calls in agile frameworks, allow for prioritization of critical projects.

Implement clear escalation paths.

Break deliverables into essential and non-essential features.

Business owner role

Evaluates success according to ‘fitness for use’ and participates in Agile Release Train-events. Ensures business value is delivered

Evaluates success by ensuring delivery is ‘according to specs’ and participates in steering committee. Ensures business value is delivered

Overlay steering committees where business ownership is shared across departments or teams.

Process rhythm

Program Increments – fixed rhythm

Milestones, dependent on throughput time

Pre-sync critical milestones with PI events. Reserve or scale up ART capacity for critical deliverables (‘fast lane’ or ‘priority lane’).

Change leader’s role

Release Train Engineer – responsible for process

Program- or Project manager – responsible for results

Regular consultation and mutual understanding. Tactical alignment e.g. when a large, multi-year strategic change program is launched, adapt the Agile value streams and/or teams accordingly.

Figure 2: What mechanisms to apply to make Agile work together with classic program management (Turner, 2023).

 

“Over the years, I have discovered a cunning paradox. In reality, an Agile framework only works in a stable context, while Agile is meant to be agile. As an organization, I am truly agile if I can employ more tools and methods than just the Agile framework.” 

Ithar Dacosta, Innovation Executive, APG Pension Management.

Two lessons: don’t reinvent the wheel and embrace the hybrid approach

For organizations that are just beginning to institutionalize change through Agile frameworks, it is beneficial for them to leverage the lessons learned from other organizations. Below you will find insights from conversations with various executives and professionals who have been extensively involved in establishing and/or working with Agile frameworks in conjunction with program and project management.

They are unanimous in two things:

  • Firstly, they believe that not every organization seeking to add an Agile framework to their repertoire of change methods should have to reinvent the costly wheel in terms of what works and what doesn’t.
  • Secondly, they unanimously state that Agile frameworks and traditional project and program management methods should not be conflicting but should complement each other in hybrid approaches.


This latter point may be the most important lesson.

Future interesting topics to discuss on making Agile work in strategy execution:

We would like your input on and/or questions regarding other perspectives on how to make Agile work in strategy execution. E.g.

  1. How organisational context matters: becoming an agile organisation should be approached differently depending on the type of organisation you want to change: as with many things in life, one size does not fit all.
  2. ‘Agile in name only.’ In conversations with our clients and various professionals, another issue came to light. Sometimes methods are chosen without being professionally and implemented in a tailored way, ‘Agile in name only.’ Low maturity in both the Agile approach, using an Agile framework, and in program and project management does not lead to results, and making combinations of approaches work becomes even more challenging (‘spot on spot’). Especially when it is casually stated that ‘we work Agile,’ but it lacks substantial understanding. A topic in itself.
  3. Suggestions? Please do not hesitate to contact us! Antal Ruiter, director in the Financial Services Practice of Turner (aruiter@turner.nl) and Jacques Pijl, director Turner Strategy = Execution (jpijl@turner.nl).

 

Further reading:

  1. On differentiation in approaches. Organizations are ‘lost in translation.’ Different change challenges require different approaches, and they are currently not being applied. We previously wrote a blog on this: Why proven methods are preferable in strategy execution. Why proven methods are preferable in strategy execution. 
  2. On scaling. Agile frameworks are primarily used for IT and digital issues, which does not cover all types of change. There are also many changes that involve analysis, design, and scaling. Scaling, in particular, is the neglected aspect of strategy execution.
    Scaling is often misunderstood as the transition from version 1.0 to 2.0 of a minimum viable product (MVP). However, scaling is equally complex when it comes to organizational expansion from a small team to hundreds of people. Read the blog by Jacques Pijl and Frits Korthals Altes on this: The winning combination. 

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Strategy = Execution. Improve, Renew and Innovate Faster

How can organizations make strategy execution their number one priority? And improve, renew and innovate faster? This I describe in my book Strategy = Execution. Strategy = execution is based on the research that Turner started years ago into the success factors of strategy execution and innovation. We interviewed 60 directors and professionals and analyzed more than 75 cases, 300 relevant books and articles.

  • More about Jacques Pijl (author) and Turner Consultancy.
  • The most popular interventions based on Strategy = Execution
  • 24 endorsements from organizational leaders
  • American management book of the year 2021, no. 1 in the category of strategic management, in the top 100 bestseller, seventh edition, translated into: English, German, Spanish, Russian and Bahasa.
  • Selection of the most important management books according to CEOs of innovative organizations (FD New Champions). Included in library of classics (mb.nl).
  • Nominated for Management Book of the Year.
  • Countless articles and interviews in FD, Emerce, Frankwatching and CFO.
  • Numerous Ted Talks and in-company workshops at the top 25-50 organizations, average rating 8.7.
  • More about Jacques Pijl (author) and Turner Consultancy
  • The most popular interventions based on Strategy = Execution
  • 24 endorsements from organizational leaders
  • American management book of the year 2021, no. 1 in the category of strategic management, in the top 100 bestseller, seventh edition, translated into: English, German, Spanish, Russian and Indonesian.
  • Selection of the most important management books according to CEOs of innovative organizations (FD New Champions). Included in library of classics (mb.nl).
  • Nominated for Management Book of the Year.
  • Countless articles and interviews in FD, Emerce, Frankwatching and CFO.
  • Numerous Ted Talks and in-company workshops at the top 25-50 organizations, average rating 8.7.

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