Agile drives business growth, but culture is stifling progress

Culture is imperative to Agile success, Infosys Knowledge Institute research has found. However, few executives are investing in cultural transformation, with the problem more pronounced in Europe than in the U.S. Firms should act now to make Agile culture change work and leverage seven Agile levers— to increase growth compared to peers by as much as 63%.

How did Tesla become the most valuable car company in the world? A good part of it was brilliant product design, excellent use of software, and a charismatic owner guiding the firm through market downturns. Perhaps less well known is the use of Agile methodology and practices. Everyone from Elon Musk to middle management uses Agile principles to deliver high-quality features that customers love. Beneath the surface, the Agile mantra of working prototypes over finished goods is transcendent. And the culture itself lends the firm the agility and speed of a startup, even 18 years after it was born.

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The importance of Agile culture

The Tesla story shows the role that culture plays in Agile’s success. Concentrating on the people dimension makes the company more dynamic. Aspirational goals such as achieving a lower carbon footprint rally employees around a common vision. Giving workers a feeling of safety fosters a culture of experimentation, with diverse voices ensuring the best product reaches the market. As leaders move from a rigid discipline to coaching and empowerment, teams become autonomous and self-directed, releasing products faster. And creating an environment where team success is more important than a single individual, actually increases positive emotions across the organisation. Taken together, these cultural factors have helped make Tesla the fastest-growing brand worldwide.

Leaders across industries agree with this assessment. In our “Agile Radar 2021” research report, we surveyed 1,000 business and IT respondents and found that culture is top of mind for executives. In fact, over two-thirds name culture as imperative for a successful Agile transformation. And yet, just 38% of business executives and 19% of IT executives are investing there this year. The problem is even more pronounced in Europe, which lags the U.S. by 10% in cultural investments, even though cloud and Agile scaling frameworks have seen greater adoption in Europe.

The problem then is not a lack of awareness but the inability of big organisations to understand which cultural components of Agile change they should pursue. At the strategic level, Musk concentrated on getting software out of the gate quickly, and failing fast. A health care company we spoke to touted its ability to start Agile programs with a small band of believers, who were given space to shine and make mistakes without fear of retribution. At Netflix, the company ensures that each employee — no matter their place in the organisation — is encouraged to take big risks but also to take responsibility for their mistakes. Lessons are learned, cataloged, and then used across the firm to take even bigger risks next time; quite appropriate for an industry that benefits from betting bravely.

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The seven Agile levers for growth

Culture is the cornerstone of Agile programs, but good culture on its own won’t achieve the business benefit executives are looking for. In our research, we found that good use of certain Agile behaviours — or “levers” — lead to substantial business growth. With these levers in place, a firm moves from “doing Agile” to “being” an Agile organisation, with Agile practices, processes, and tools very much a part of the firm’s DNA. We spoke to senior leaders and clients who are at the forefront of their industries and cherry-picked 13 Agile levers that were used in their organisations. We found seven of these levers can increase business growth compared to peers by as much as 63% when used as part of a holistic Agile strategy. These levers are:

  1. Fostering better customer insights to strengthen customer journeys.
  2. Organising teams around these journeys from start to finish.
  3. Ensuring collaboration across functional boundaries.
  4. Instituting self-organised teams.
  5. Upskilling employees using digital learning platforms.
  6. Using Agile workspaces with collaborative working infrastructure.
  7. Enabling virtual workspaces with digital tools and collaboration platforms.

Senior leaders who invest in upskilling will ensure a culture of innovation in the enterprise. Skills needed today and in the future are identified and learning curves accelerated by providing immersive experiences to supplement learning. At Infosys, we categorize employees into different skill horizons based on workers’ core, digital, and emerging skills.

For staying close to the customer through better insights, data is not just a lazy asset locked in systems of record — it is accessible through an end-to-end system that translates customer insights into action. Going further, artificial intelligence taps into unspoken team behaviors and interactions, which research from CB Insights found increases revenue by as much as 63%.

Teams will also need to collaborate effectively and make decisions on their own. This will only happen if leaders understand when to guide and when to trust. In our research, we found that the most effective Agile firms (we call these “Sprinters”) are much more likely to foster servant leadership, along with the seven levers described. Finally, enabling collaborative Agile workspaces – both physical and virtual that allow seamless working.

Micro is the new mega

Perhaps most important in transformation is to adopt the Agile mindset and techniques discussed in piecemeal fashion, rather than expecting a big-bang approach to work. Here, exponential change occurs through “micro changes,” an idea put forward by Pramod Varma and Sanjay Purohit of the Societal Platform, and expounded upon in a recent Harvard Business Review article by InfosysJeff Kavanaugh and Rafee Tarafdar. Employees are given targeted rewards and recognition, along with cues and suggestions, leading teams to change their behaviour at the macro level with minimum risk and resistance along the way.

Agile is eating the world, much as software is still doing. By following these seven transformational levers and changing worker routines slowly and steadily, firms can achieve better business and IT outcomes, more growth, and a more customer-centric workforce that changes with the times.

Written by Alok Uniyal, vice-president, quality and head of agile & DevOps services at Infosys

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