• Scaling Agile!
• Beyond Budgeting!
• Why this is important – where does
agile and lean ﬁt into?!
• Accepting uncertainty!
• More ﬂexible F&C!
What is your idea of agile methods?!
• What does ”agile in large scale” mean?!
• What does ”agile in large
How we should see Lean Thinking?!
• Question: Is SW Kanban same as Kanban in manufacturing or is it
• My claim is we are creating something new based on the old and
If R&D is changing, should the rest of the organization
• Is there friction between R&D and the rest of the organizations?!
• What new could other organizations learn?!
• Is agile teaches how to approach the UNCERTAINTY - Isn’t the
changing world present also elsewhere than in software
Changing mind sets!
‘Command and Control’
• Organizations are obedient machines
• Organizations are a collection of
replaceable parts (parts determine
performance of the whole)
• Organizations comprise of ‘cause and
effect’ relationships that are
• Organizations need central planning,
coordination & control
• Change is reactive and project driven
‘Beyond Budgeting’ or ‘Empower &
Adapt’ Model Senior
teams figure out
units support self-
exists in a
• Organizations are adaptive systems
• Organizations are holistic systems (whole
system determines performance)
• Organizations are webs of relationships that
• Organizations are self-organizing and self-
• Change is integrative and adaptive
• Most of the companies spend their eforts on Neutralizing Innovation,
doing increments of the existing products or a catchup !
• Only few companies are able to nurture the radical innovations
Why this important?!
• Globalization is a whole new ball-game!
• This model is OK for growing and mature, established markets but
does not work at times of secular market change!
• Secular market change means in this context ”not to be repeated“ and
occurs when market expands to new categories or new class of
• It means a massive growth opportunity which you are about to miss if
you are too internally focused!
• POINT is to replace the annual planning with vision, strategy and
execution that gives company the escape velocity!
Typical Portfolio Pattern!
• Growth of 15 – 30% (or more) is high and single-digit growth is low,
the 10-15 % range being kind of a ”tweeter” zone!
• A category is material to your business if it should generate 5-10
percent of either your total revenue or your total proﬁt or should be
Material and non-material business!
• The more material the business is the ore power it has in resource-
allocation negotiations during the annual budget process!
• There is no real competition between Mature and Emerging
businesses: Emerging initiatives are doomed from birth. Mature
business is driven by fact-based management teams and needy
market requirements in Emerging business get little understanding
– a primary symptom of enterprises experiencing Christensen’s
How to get the company to ﬂy on?!
• Hierarchy of powers (that may drag you down to Earth)!
1. Category power!
‒ Look for categories (e.g. Smartphones category) that are of high
demands are more powerful than their peers; grow faster and enjoy
2. Company power!
‒ Status and prospects of a company relative to its competitors;
company power can be different for different categories of products!
3. Market power!
• Company power within a single market segment!
4. Offer power!
• Demand of given product or device compared to reference
5. Execution power!
‒ Ability to outperform your competitors under conditions that favor no
vendor in particular!
More respect for special conditions that distruptive
innovatio n needs!
• Create a virtual organization with single manager in charge that
reﬂects the typical startup-conditions:!
• Higher risks and rewards!
• It’s not 8 to 4 work!
• Quick decision models, quick support!
• ”Organization within organization”!
• Respect the people that take the challenge!
Four Modes of Execution!
Invention! Deployment! Optimization! Transitions!
Type of Leader! Visionary
Creativity! Competitiveness! Control! Collaboration!
Core Attribute! Spontaneous! Tough-minded! Prepared! Empathetic!
Decision style! Intuition! Experimentation! Deliberation! Consensus!
Beyond Budgeting Ideas!
• Separate concerns: !
• Targets & rewards!
• Planning & forecasting!
• Resource allocations!
• Measures and controls!
• The problem is that the budget tries to perform too many tasks that
conﬂict with each other. It acts as a basis for setting targets and
rewards, business planning and forecasting, cost and capital
allocation, and performance measurement and control. And the
more that targets are treated as ﬁxed contracts the greater is the
likelihood of dysfunctional behaviour. !
Common Ground in Beyond Budgeting & Agile:
• A good plan respects uncertainty !
– x-level rolling planning!
• You do not want to place your bets too early!
• Learning is important!
Can agile planning be adapted to ﬁnance and control?!
• Most of the R&D costs come from
– Where do we need matrix
organization cost center structure?!
• Backlogs already contain the information
who did & what!
• Respect Beyond Budgeting principles!
– Separation of tracking and
From organization-based budgeting to project-based F&C!!
More Flexible F&C!
• Incremental investments: balance resources as feasible (shorter
feedback loops, based on progress)!
– Even allow self-organization (allow people dynamically change
between teams), and just monitor where the effort has been
• Delayed decisions: collect feedback from ﬁeld, then make ﬁnal
investment decisions i.e. adjust the Epic and Feature priorities
• Option: Balancing investments asymmetrically towards disruptive