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Achieving Hi-end Agility in Large R&D Enterprises


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Agile methods have improved project performance, but that doesn't seem to roll-up at business level. There is a need to create 'butterfly effect' to amplify smaller actions into large outcomes. In this presentation made on 20-Aug-2011 at Agile Hyderabad 2011, I examine some of the issues that need to be addressed to enable hi-end agility in large R&D enterprises.

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Achieving Hi-end Agility in Large R&D Enterprises

  1. 1. Achieving High-endAgility in Large R&D Enterprises Tathagat Varma PMP, PRINCE2, CSM, Sr. Member IEEESr. Director Business Ops, Yahoo! R&D India
  2. 2. Disclaimer: these are my personalviews
  3. 3. Topics• A Decade of Agility• Business impact• Enabling Hi-end Agility
  4. 4. What is Agility?• Agility is the ability to change the bodys 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.•
  5. 5. Where is Agile used today?
  6. 6. …and where it is not?
  7. 7. Why do they adopt Agile?
  8. 8. And the results are showing…Aa
  9. 9. But…
  10. 10. Large teams?
  11. 11. Distributed teams?
  12. 12. Large companies?
  13. 13. Company-wide?
  14. 14. Successful?
  15. 15. Scalable?
  16. 16. So… …with Agile?
  17. 17. What are the barriers to agile adoption?
  18. 18. …and what are the concerns?
  19. 19. Meanwhile…
  20. 20. Reported profit margin for S&P 500 forlast 25 years is only 5.5%
  21. 21. IT Operational Budget as Percentage ofRevenue: 2006-2011 Source: Computer Economics, 2011
  22. 22. And the software budget is?
  23. 23. IT Budgets in Fortune 100 companies 77 of IT budgets to % just maintain status quo
  24. 24. Let‟s do some math! 1.6%IT Budget 0.3% Of Revenue 19% Software
  25. 25. „Savings‟ if Agile delivered… 10x: 0.27% 5x: 0.24% 2x: 0.15%
  26. 26. Loss in Agility Business ~5- 6% Portfolios Agile Projects 2-10x (?)
  27. 27. A typical large company
  28. 28. Planning Horizon and Execution Cycle Strategy 3-5 years Portfolio 1-3 years Projects 3-6 months Sprints 2-4 weeks
  29. 29. Planning Onion
  30. 30. High-end Agility “Ability to turn the Titanic” “Ability to shut-down Fukushima” Agility @ scale Agility @ light-speed Agility across the organization
  31. 31. What is this?
  32. 32. Butterfly Effect• “Predictability- Does the Flap of a Butterflys 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.
  33. 33. Who is this man? Mohamed Bouazizi
  34. 34. And who is this man?
  35. 35. Enabling Hi-end Agility Product Creation Process End-to- People End and Teams Execution Hi-end Agility
  36. 36. People and Teams• Cross-functional Teamwork• Cross-silo Collaboration• Cultural Transformation
  37. 37. 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!
  38. 38. 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
  39. 39. 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
  40. 40. Product Creation Process• Planning process• Decision-making process• Innovation networks
  41. 41. 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
  42. 42. 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)
  43. 43. 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
  44. 44. End-to-End Execution• Agility at project-level• Program Management• Communication
  45. 45. Agility at project level• Faster validation of hypothesis• Minimize WIP (Work In Progress)• Improve leadtime
  46. 46. 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
  47. 47. Communication• Highly underrated at team level• Execs need actionable communication
  48. 48. So, where is Agile in Gartner Hype Cycle?
  49. 49. 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
  50. 50. References• State of Agile Development Survey 2010, ts.pdf•••• Predictability: Does the Flap of a Butterflys Wings in Brazil Set Off a Tornado in Texas? – Edward Lorenz, 1972,• Why Agile doesn‟t sell with Management, 21-Jul-2009,•••
  51. 51. Thanks! Twitter: @tathagatvarma Blog: Email: tathagat.varma@gmail.comPresentations: