Achieving Hi-end Agility in Large R&D Enterprises

Achieving High-end Agility in Large R&D

Enterprises Tathagat Varma

PMP, PRINCE2, CSM, Sr. Member IEEESr. Director Business Ops, Yahoo! R&D India

Disclaimer: these are my personal views

Topics• A Decade of Agility• Business impact• Enabling Hi-end Agility

What is Agility?• Agility is the ability to change the

body's position efficiently, and requires the integration of isolated movement skills using a combination of balance, coordination, speed, reflexes, strength, endurance and stamina.

• In business, agility means the capability of rapidly and efficiently adapting to changes. Recently agility has been applied e.g. in the context of agile software development and agile enterprise.

• http://en.wikipedia.org/wiki/Agility

Where is Agile used today?

…and where it is not?

Why do they adopt Agile?

And the results are showing…

Aa

But…

Large teams?

Distributed teams?

Large companies?

Company-wide?

Successful?

Scalable?

So…

…with Agile?

What are the barriers to agile adoption?

…and what are the concerns?

Meanwhile…

What’s up with business

?

Reported profit margin for S&P 500 for last 25 years is only 5.5%

http://runningofthebulls.typepad.com/toros_running_of_the_bull/2010/07/valuation-update.html

IT Operational Budget as Percentage of Revenue: 2006-2011

Source: Computer Economics, 2011

And the software budget is?

IT Budgets in Fortune 100 companies

77% of IT budgets to just maintain status quo

http://blogs.sungard.com/as_cloud/tag/top-cloud-computing/

Let’s do some math!1.6%

IT Budget

19%

Software

0.3% Of Revenue

‘Savings’ if Agile delivered…

2x: 0.15%

5x: 0.24%

10x: 0.27%

Loss in Agility

Business ~5-6%

Portfolios

Agile Projects 2-10x (?)

A typical large company

StrategyPortfolio

Projects

Planning Horizon and Execution Cycle

Strategy3-5 yearsPortfolio1-3 years

Projects3-6 months

Sprints2-4 weeks

Planning Onion

High-end Agility

“Ability to turn the Titanic”

“Ability to shut-down Fukushima”

Agility @ scaleAgility @ light-speed

Agility across the organization

“Butterfly Effect”

What is this?

Butterfly Effect• “Predictability- Does the Flap of a Butterfly's Wings

in Brazil Set Off a Tornado in Texas?” – Edward Lorenz, 1972

• The butterfly effect is a term used in Chaos Theory to describe how tiny variations can affect giant systems, and complex systems, like weather patterns. The term butterfly effect was applied in Chaos Theory to suggest that the wing movements of a butterfly might have significant repercussions on wind strength and movements throughout the weather systems of the world, and theoretically, could cause tornadoes halfway around the world.

• What the butterfly effect seems to posit, is that the prediction of the behavior of any large system is virtually impossible unless one could account for all tiny factors, which might have a minute effect on the system. Thus large systems like weather remain impossible to predict because there are too many unknown variables to count.

Who is this man?

Mohamed Bouazizi

And who is this man?

Enabling Hi-end Agility

Hi-end Agility

People and

Teams

Product Creation Process

End-to-End

Execution

People and Teams• Cross-functional Teamwork• Cross-silo Collaboration• Cultural Transformation

Cross-functional Teamwork• Not just the traditional development

teams• Business planners, strategists, financial

planners, marketing, sales, customer support, manufacturing, partners…everyone needs to be involved

• There are no “chicken” in this game!

Cross-silo Collaboration• No man team is an island• Silos lead to agency theory at work –

“optimized parts, suboptimised whole”• Cross-silo, or horizontal efforts ensure

collaboration with all relevant stakeholders not just a given project but for the entire business

• Get as many fingerprints as required

Cultural Transformation• Engineering teams ‘understand’ concept

of agility to an extent – other groups might not!

• Impedance mismatch between Agile engineering teams and traditional business teams

• Needs a centrally coordinated change management effort

Product Creation Process• Planning process• Decision-making process• Innovation networks

Planning Process• A long-term strategy sets the direction

and pace, but could also limit agility• Need to stay focused but flexible to

changes• A way to planning could be– 70%: long-term strategy– 20%: short-term mid-course adjustments– 10%: play by the ear

Decision-Making Process • Perhaps the bane of large organizations!• Quickening-up the process is key –

irrespective of the outcome of decision• More communication leads to faster and

better decisions (and buy-in)

Innovation Networks• Productizing innovative ideas is true

agility!• Democratize innovation• Make it safe to fail• It takes a village to raise a child • Rapid resolution of ideas

End-to-End Execution• Agility at project-level• Program Management• Communication

Agility at project level• Faster validation of hypothesis• Minimize WIP (Work In Progress)• Improve leadtime

Program Management• Lockstep all functions required to build

and launch the product• Provide, manage and ensure two-way

linkage between strategy and operational plans

• Optimize the ‘whole’, a la Lean

Communication• Highly underrated at team level• Execs need actionable communication

So, where is Agile in Gartner Hype Cycle?

Conclusions

• There is loss of agility in large organizations – project-level benefits don’t amplify at business level

• This is not just about applying agile / lean principles to software development team alone – we need to create ‘butterfly effect’

• Hi-end agility can be achieved by creating interlock of people, process and execution on top of project-level agility

References• State of Agile Development Survey 2010,

http://www.versionone.com/pdf/2010_State_of_Agile_Development_Survey_Results.pdf

• http://www.ambysoft.com/surveys/• http://www.wealthscribe.com/?p=70• http://anagilestory.com/2011/07/20/can-agile-work-in-big-organizations/• Predictability: Does the Flap of a Butterfly's Wings in Brazil Set Off a

Tornado in Texas? – Edward Lorenz, 1972, http://eapsweb.mit.edu/research/Lorenz/Butterfly_1972.pdf

• Why Agile doesn’t sell with Management, 21-Jul-2009, http://managewell.net/?p=550

• http://www.wisegeek.com/what-is-the-butterfly-effect.htm• http://managewell.net/?p=1118• http://www.infoq.com/interviews/larman-scrum-large-organizations

Thanks!

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Email: tathagat.varma@gmail.comPresentations:

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