A change in strategy development is needed. In our first article we explained why in today’s context the development of an IT strategy should take a different course. In the following we show why the described requirements apply and which success factors exist for agile IT strategy development.
First experiences with agility are available – is that enough for a successful IT strategy development?
Many companies have now gained experience with agility, be it in software development or in non-IT areas as well as in the general transformation to an agile company. Based on successful projects, some have tested agile scaling models, enriched the associated portfolio management with agile principles and, where appropriate, have already experimented with strategic agile elements. However, the majority of companies still understand agility as a pure project instrument and accordingly have little or no experience with its use on the strategic level.
So what do you have to pay attention to and what is important in the agile development of an IT strategy? Which external and internal factors need to be considered – and why? Which parts of the existing strategy process remain, which ones need to be adapted? How will the time schedule, employee involvement and the role of the CIO in the process change? In short: What is critical for an agile strategy development?
The application of agile principles at the strategic level
The concept of agility is constantly evolving in discussions, but it is mostly seen as a framework for action to effectively manage complex situations. For the concrete application in a context – here the IT strategy development – the Agile Manifesto and the Agile Principles are in our view still a very helpful orientation. This results in the following 6 requirements for companies in order to be able to carry out agile strategy development successfully:
- The ability to recognize changes in the needs of customers and in the market context at an early stage.
- The ability to make quick decisions – based on these new data or hypotheses (i.e. under uncertainty).
- Fast reaction with changed or new products, services or even business models.
- Quick adaptation in the necessary internal structures and processes.
- Being able to sustainably cope with the high speed of change as an organization – e.g. through automation, evolutionary improvement and participation of those affected.
- To be able to carry out organizational changes quickly and easily and to continuously develop the (learning) competence of the company.
Your customers are enthusiastic?
Congratulations! Either you have happened to hit the bull’s eye with your products or you know your place in the market environment perfectly and are able to notice and react to changes. For the development of the IT strategy this means that you know your business very well. You know what the business departments themselves need – and what they in turn can and want to offer the customers as a whole.
Unfortunately, the reality often looks different: Due to long planning cycles, the exchange between IT and business departments is anything but frequent and this effect is often intensified by traditional silo structures. Talk to your business departments on a regular basis and frequently about strategic needs and alignment, not just about the everyday IT project small talk!
By the way: Who in your company actually knows the business? Who can recognize errors, dependencies and market developments in the tension between IT and business early on? The CIO and the IT top management, or rather the application support or service desk agent?
In the agile strategy development process it is necessary to change the way your own IT staff participates; it is all about a stronger, continuous integration of practical experience. It goes without saying that classic strategic characteristics such as strategic guidelines of the company management remain valid – but they must be enriched much more by further perceptions in order to be able to meet the actual needs of the customers.
Suggestion: Invite a few colleagues from the IT base to your next strategy workshop and discuss the necessary adjustments of the IT strategy at eye level – it could be exciting! If you are really brave – how about colleagues from the business departments as participants of the next strategy workshop?
Again something new
In the future, disruptive thinking and acting will become more and more important than consistently sticking to a successful past.
An agile approach means being able to make changes as well as possible at any time when new insights have arisen. This does not mean chaotic, haphazard and erratic procedures, but requires a clear, disciplined structure and a balanced rhythm of planning & change, as all typical agile frameworks provide. Applied to the strategic process, this means that experiences and insights from the ongoing implementation of the strategy (e.g. through ongoing projects) have a direct impact on strategic planning and, conversely, continuously adapted planning has a direct effect on the ongoing implementation. There is a much stronger interlocking of the two elements planning and execution, more feedback and adaptation, i.e. a typical iterative-incremental approach.
For the implementation of an agile IT strategy, the derivations are simple: Instead of a classic sequence with long-term planning, fixed budget releases and long-running projects, a so-called duality must be established – an active coupling of strategic planning with implementation, ergo mostly with project portfolio management. It is important to create the necessary transparency, derive insights and make adaptations quickly. How do you need to structure your decision-making processes so that the information gained can be made available quickly and comprehensively to those involved in the strategic process?
Strategic programs are no longer planned miles in advance, but rather a step-by-step approach to solutions is taken. The iterative approach, or rather the possibility to make corrections, also allows proceeding experimentally and with uncertainty – instead of having to wait for extensive preliminary analyses – an invaluable advantage of agile strategy development.
High performance in projects and innovation departments
A further success factor for agile IT strategy development are of course the teams that either drive the actual implementation in projects or the necessary creative design of new things in innovation projects. Once you have experienced modern project work in a “high performance team”, you never want to go back to a classic model with hierarchical project managers, top-down defined work-breakdown structure and a lone fighter mentality – the difference is gigantic!
Modern project teams as part of agile IT strategy development and implementation are of course cross-functional.
Modern project teams as part of agile IT strategy development and implementation are of course cross-functional. This means that our own employees from the various departments, but also cross-functional staff, are not only companions, guests and requestors, but are an integral part of the teams, every day. The best solutions for complex problems arise when as many people as possible with different and creative perspectives work together.
Consider how much the question of whether a project “hangs in IT” or “in business” occupies your company and what (negative) consequences this simple question has for your projects. What must happen in your company so that the best experts can work together in projects and innovation teams – regardless of their legal position in the company?
As a result of this structural component, there are further aspects that you need to consider when designing effective teams – from sustainable “empowerment & enabling” (self-organization), to freedom for collaborative work and the provision of methodological training by agile coaches.
Digitization of poor processes
The successful implementation of a strategy usually requires adjustments to the internal performance of the company, i.e. adjustments to structures and processes. This means in consequence that the strategic goals only become effective when the internal processes and structures have been adapted in a viable and sustainable manner.
In the context of an agile strategy development it follows that the adaptability and speed must be correspondingly higher. If the internal organization can only be modernized every few years, the entire energy from the agile strategy process will be wasted without effect.
The end-to-end approach in designing the process landscape is a core element in companies and organizations today. Not optimizations of “islands” bring the desired performance of a process, but the improvement of the interaction of the individual elements. In doing so, companies must allow and enable a higher degree of cross-functional networking both internally and externally (with partners and suppliers). Greater use of data and technology to develop new solutions for customers and the market, to make decisions and improve processes is essential.
But what does this mean for IT and successful agile strategy development? Two things above all:
- Your processes and structures should not be designed for stability but for adaptability
- Be careful with “lighthouse projects” and “isolated applications”; these must be integrated into operational processes in order to have a lasting effect.
Can your company develop?
The above-mentioned aspects present companies with enormous challenges. Some industries have reached very stable conditions in recent years – and companies have been very successful in their market segment without having to change. In many cases, the same was true for the IT organizations of these companies; administration, maintenance and cost management instead of innovation and strategic development was the credo.
In this context, a new corporate culture is now emerging as a driver of change. The company has identified the need for agility – and defined goals that agility is designed to achieve. This has resulted in many new demands on the organization itself.
Agile companies follow a new principle of order. The allocation of resources and the implementation of task requirements, knowledge and competencies in flat hierarchies are key factors for success. Since it is often necessary to act on the basis of assumptions, a rethinking in the direction of an “inspiring work environment” is required, in which decisions are accepted under uncertainty and errors must be tolerated as a source of learning.
A developing organization – a learning organization – needs a corporate culture and structures that enable permanent learning and continuous renewal at all levels.
A developing organization – a learning organization – needs a corporate culture and structures that enable permanent learning and continuous renewal at all levels. This also means that a well integrated change management becomes essential, orchestrating the right balance between change and pause.
The organizational competence of a company becomes visible through the actions and routines of its employees as well as rules. Through the already described change through agility in transparency, decision paths, co-determination, frequency of adaptation and much more, the company changes a lot. The challenge is to use these positive effects effectively for the strategic process in order to get the uncertainty caused by complexity under control.
Conclusion: Success factors for agile IT strategy development
As the responsible IT manager, what can you do now to strategically develop the company successfully?
Move much closer to the business units, to the market and to your customers through joint projects and innovation plans. Dissolve loam layers between strategic planning and implementation, encourage constant feedback and adaptation. Involve your employees in the strategy process. Allow dialogues at eye level and promote a good error culture. Finally, design your organization, processes and structures from the ground up so that they can be developed quickly and painlessly.
Image source header picture: Artur Aldyrkhanov