How to successfully transform from classical to agile R&D
Figure 1: The “long march” of agile transformation.
Digitalization and connectivity are causing major disruption in industries around the globe. As a result, more and more companies are adapting agile principles and practices to meet the challenges and CTOs confront tough questions concerning the best way to adopt agility so as to increase R&D performance and create valuable innovation.
Figure 1 shows an agile transformation with its typical ups and downs. To avoid common pitfalls and accelerate an agile transformation, we at 3DSE recommend a stepwise emergent approach that encompasses five major dimensions of R&D: strategy, product, process, organization and culture. Table 1 maps the relevance of these dimensions to the principles of the manifesto for agile software development *1 and key challenges as well as success factors presented in the CHAOS report from the Standish Group. *2
Agile R&D: quickly turns strategy, product, processes, organization and culture toward new value-creating and value-protecting opportunities and features.
Agile Transformation: aligns strategy, product, processes, organization and culture to an agile R&D vision. During transformation, teams are enabled, and agile approaches and principles are scaled up from the team to the organizational level.
Key Challenges for Agile Transformation
The major obstacles in adopting agility can be observed in transformations involving developers and manufacturers of cyber-physical systems:
- Lack of support of top management concerning the benefits of agility: Without executive sponsorship, agile transformation projects are doomed.
- Unclear vision for the agile transformation: “If you don’t know where you’re going, you’ll probably end up somewhere else.” (David Campbell)
- Inconsistent roles, processes and tools: Missing common language, method, roles and responsibilities causes confusion and inefficiency for future users.
- Mindset of competition (resources, knowledge, equipment…) instead of acting as a team.
Agile Transformation Approach
In our experience in successful agile transformations, we have found two approaches highly effective in overcoming these obstacles:
Agile Pioneers Approach: set up of completely agile working co-located teams within the existing organization, for example, agile pilot projects -> major challenges: cultural mix, process limits.
Agile Entrepreneur Approach: set up of a completely new agile organization in parallel to the existing one, for example, an innovation lab -> major challenge: later organizational merger.
We refer to a third way of implementing agility as the:
Agile Agent Approach: bottom-up implementation of agile methods and roles within the existing organization, for example, implementing an agile project management office (PMO) -> major challenge: requires top management commitment.
As this third approach is characterized by low speed and minor results, we recommend the first two approaches. Figure 2 highlights the key characteristics of the different approaches.
The key to accelerating the “long march” of agile transformation is an emergent approach involving all stakeholders. The two recommended approaches rely on the following common behavioral features implemented sequentially (see figure 3):
- Preparation: target agreement at the top management level, dedicated team, change concept.
- Experimentation: clear agile vision, consistent agile toolbox including principles and practices.
- Scaling: agile leadership principles, scaling model, clear role and process descriptions.
The behavioral aspect of these features is crucial for any successful agile transformation. “Behavioral” refers to the effect of an intervention on individuals and teams to get along with a new complex situation and to align on objectives and ways to achieve these objectives. Table 2 describes the above-mentioned features and their behavioral aspects.
Each of the described features is critical for the success of the agile transformation. Implementing these features needs to take into account the specific organizational environment, internal structures and interactions. To adapt the “target-group-oriented change concept” feature to the organizational characteristics, the following steps need to be executed:
- Stakeholder analysis: Who cares about or is impacted by the agile transformation?
- Target group identification: How can stakeholders be grouped to make communication more efficient, for example, in terms of external vs. internal?
- Change concept definition: What are effective change instruments and how can they be applied to change objectives as well as target groups?
Figure 4 shows a real-life example of an effective change concept that made the X-Lab a success story of agile transformation within MAN Truck and Bus AG.
Agile Transformation – Key Success Factors
Starting agile transformation is one step, but accelerating that transformation is another step entirely. Based on our experiences in agile and change management, 3DSE recommends the “agile transformation program” that acts a role-model and focuses on the following eight key success factors throughout the transformation process:
- Agile leadership: lead the transformation in an agile way.
- Frequent value delivery: continuously deliver value for your customers and stakeholders.
- Incremental revolution: apply a step-wise approach to implementing the agile vision and to continuously improving it – allow failure and “kill your darlings” if they prove not sufficient.
- Agile toolbox: apply agile events and artefacts within the chosen agile transformation approach.
- Multi-project fit: enable tailoring of the defined agile events and artefacts to different project categories.
- Modular architecture: design products with a scalable modular architecture to be able to decouple different realization speeds.
- Agile infrastructure: enable the agile transformation with agile services, adequate technologies and an agile ecosystem.
- Stable framework for change: ensures the agile transformation initiative is adequately staffed, self-organized and self-managed.
Figure 5 summarizes the key success factors and illustrates best practices.
Dr. Thilo Pfletschinger
Dr. Thilo Pfletschinger was Partner at 3DSE Management Consultants GmbH in Munich. With more than 15 years of experience in R&D consulting he is responsible for the key topic „Optimizing R&D“ as well as the 3DSE practice with the same name. With excellent industry expertise in Automotive, Transportation, Energy, Health Tech, Aerospace & Defence as well as Industrial his core competencies lie in the user-oriented planning and sustainable implementation of innovation and strategy programs as well as organizational and process changes.