Leaders and managers know the development and training of their employees is critical to the growth and success of their organization. However, as leaders are pressured with time and cost constraints, the training budget is often the first to go. It can be difficult to justify training costs without the hard numbers to back up the value of education.
The research gathered below demonstrates the ROI of training and its positive impact on organizations as a whole.
The ROI of Training
Exhaustive research by Dr. Laurie Bassi, a human capital analysis specialist, found that training and development has a 300% return on investment. The ROI of training out-returns many other investment options like R&D.
The research found companies that invested in training and development had:
21% increase in productivity
24% higher profit margin
300% reduction in employee turnover
218% higher income per employee
86% higher company value, and
A return per dollar invested of $6.72
Training and Financial Performance
Jack Welch calculated the impact of training and development on his executives and described the return on investment as infinite. GE continues to get returns on the leaders trained in the 1980s.
Research presented to The Association for Talent Development further supports this. According to this research, investment in employee training enhances a company’s financial performance. Research showed that an increase of $680 in a company’s training expenditures per employee generates, on average, a 6 percent improvement in total shareholder return.
Over a period of three years, the researchers studied more than 500 companies and found that firms investing the most in training and development (measured by total investment per employee and percentage of total gross payroll) yielded a 36.9 percent total shareholder return as compared with a 25.5 percent weighted return for the S&P 500 index for the same period.
Professional training is an investment that’s a win-win for companies and their employees. In fact, it is one of the first steps on the path to real, lasting change.
When it comes to Agile training, workshops and classes don’t make your organization automatically agile. Many factors play into organizational agility–from processes to culture–and some of them can’t be taught in a 2-day class. It takes commitment, practice and oftentimes, strong guidance.
However, it is vital your teams, managers, and leaders are all on the same page (language, practices, processes) when it comes to Agile frameworks and methodologies. That’s where training comes in.
In 2018, Texas Mutual Insurance Company made the choice to go “all in” with Agile. After decades at the forefront of workers’ compensation insurance for the state of Texas, Texas Mutual recognized that they would have to change how they delivered value in order to stay at the top.
In this webinar, Erik Cottrell interviews Texas Mutual COO, Jeanette Ward. Learn how she’s leading and managing change across the enterprise, how Texas Mutual made the decision to go Agile, and how she worked with peers to leave behind old Command and Control leadership habits.
Key takeaways include:
An executive’s perspective on managing an Agile transformation
Why TXM takes risks in a risk-averse industry
Tips for preparing your organization for change
Benefits and results gained from implementing Agile in insurance
How to win over the Agile skeptics in your organization
2018 was a remarkable year for the Agile community. Agile is now expanding into new departments and industries. Companies are continuing to tackle the challenge of scaling Agile throughout their organization. More and more leaders are getting involved in their organizational transformations every day.
What does this all mean for companies and their use of Agile in 2019?
In our latest webinar, Founder & CEO, David Hawks, and SVP of Client Success, Erik Cottrell, presented the Agile trends they’ve observed in 2018 and during Agile Velocity’s 8 years of business.
You’ll leave with…
– An overview of Agile trends occurring in companies across industries
– Agile transformation mistakes to look out for in 2019
– Quick tips for scaling Agile & implementing frameworks, like SAFe or Scrum at Scale
– Our predictions for the future of Agile
In the first couple sentences of “Agile Integration: The Blueprint for Enterprise Architecture,” a recently released report by Red Hat, the authors write: “Business success is increasingly based on your ability to react to change. As new disruptive players enter markets and technology upends what consumers expect, organizations increasingly need to change plans in much shorter cycles than ever before. Modern software architectures and processes can make organizations more effective at dealing with this change and emerging as winners in their markets.”
With the business case spelled out, the report goes on to describe “a new architectural framework called agile integration” that can help “your organization to create a competitive advantage.” This is not to be confused with the traditional “agile software development,” according to the authors.
Rather, the agile methodology, when applied to agile integration, “takes the complexity of existing systems, different data types, data streams, and customer expectations, and finds a way to unify them.
“A distributed integration architecture treats each integration point as a separate and unique deployment,” according to Red Hat, which is a provider of open source software solutions. “The integration can then be containerized and deployed locally for a specific project or team without affecting any other integrations deployed throughout the organization.
“Each instance uses an immutable definition . . . [making] the environment highly repeatable and consistent for each instance, which is ideal for continuous integration and continuous delivery pipelines.”
Erik Cottrell, Senior Vice President of Client Success and Strategy of Agile Velocity, suggested the developing trend was promising.
“Enterprise IT constraints are not new for companies adopting Agility,” he said. “What’s new, and exciting, is how courageous Lean/Agile Enterprises are now responding to IT infrastructure constraints with the same urgency and ingenuity as their application development counterparts. These companies recognize how profoundly IT challenges inhibit their ability to deliver value to their customer base and waste valuable team cycles. These IT innovations are foundational to an enterprise value stream.”
He continued: “Agility offers relief to teams who can’t know more than they do at the outset. By actually working with, and learning quickly from, small batch size teams are able to deliver value and get smarter along the way. Better still, new constraints and challenges are surfaced faster and can be addressed as work is being done, not just during planning or documenting. There’s a myth that no planning is done in Agile, but we find there’s the right kind of planning that actually allows teams to accelerate doing work.”
Near the end of the 19-page report, Red Hat concludes that “agility is a process, not a project” that is essential.
“It has never been more important for organizations to be able to react to change in the market, and it is largely IT systems that must deliver this ability to launch new services or update existing ones quickly. Rethinking IT infrastructure has never been more important, as it is the foundation of digital services.
“Infrastructure teams have historically been tied to very long, modulated processes because of the need to mitigate risk and maintain stability. However, it is possible to shift the mindset of infrastructure from hardware or platform-based to integration-based. Integration is not a subset of infrastructure.” Elaborating on this, the authors note that “it is a conceptual approach to infrastructure that includes data and applications with hardware and platforms.”
To achieve the aforementioned “agile integration,” the authors suggested three technology pillars:
Distributed integration, which uses messaging and enterprise integration patterns to integrate data and systems. These are broken down into small, team-driven integrations that are distributed, as needed, across projects and touchpoints.
Internal API management, which creates a reusable set of interfaces to allow development teams to engage with applications and systems. APIs provide guidance and structure to how applications should interact.
Containers, which allow integration projects to be closely aligned with development and operational projects and enable integrations to be developed, tested, and released similarly to software projects using DevOps methods.”
These resonate with leaders like Cottrell, whose company is at the heart of the “Agile” movement in Austin, Texas.
“These three pillars allow teams to get to ‘done’ by providing the necessary access to and integration with key technologies without waiting in an IT queue, where the request has to be prioritized against other, unrelated requests,” he said. “By giving teams access to these building blocks, they’ve reduced friction and allow for remarkable acceleration at scale, all without losing necessary discipline or appropriate controls.”
Red Hat put the proverbial exclamation point on the concept in its report when it wrote that “technology has to be used to support culture change, and that means working to make infrastructure teams—and not just their software—more agile.” A&G
We could give you advice all day on a million different Agile subjects–but we thought it might help to hear from someone who’s been in your shoes.
We interviewed Will Simpson, COO of New Iron, and our own Erik Cottrell, SVP of Client Success, to learn about their Agile transformation stories from ideation to execution and everything in between.
See below for the full webinar recording and summary.
Erik and Will met nearly 7 years ago when they led an Agile transformation in their organization as the Product leader and the Technology leader respectively. Here is their story.
Experiencing Pains In The Organization
Erik and Will’s company had huge aspirations and smart people. Unfortunately, there was no formal product team, broken and non-existent processes, eager clients, and a challenging multi-stack technology foundation that led them to seek change.
Betting On Agile
Will initially brought Agile to their organization at a team level through training with Agile Velocity. He invested time into creating a solid foundation of knowledge across all teams.
Further still, he sat down with each member of his technology organization and interviewed them. This process brought to light the lack of Agile expertise in his organization. This is when he made the decision to bring in Agile Velocity as a full transformation partner. However, he quickly understood a change of this size would require buy-in from all areas of the organization–not just technology.
For Erik and Will, buy-in started as a series of hard, honest conversations between the two of them. They established an internal partnership built on trust, safety, and candor, which allowed them to depend on each other as they navigated through organizational change.
Remember: Even leaders don’t have to work alone.
Buy-In From Peers
Before you ever ask for buy-in, first ask yourself this question: “What matters to the other side?” For your Finance leader, the answer is probably budget and process. For your HR leader, maybe it’s company culture.
Whatever the answer might be, focus on finding a way to account for those interests. Understanding what matters to another person or department is the first step in convincing them to join your cause.
Buy-In From Teams
Change has the potential to be a very scary thing. There will likely be individuals who worry about losing their job in the midst of organizational change. Communication of your goals and the realities of your planned changes will be key to mitigating tension or stress during your Agile transformation.
Erik and Will’s Agile Transformation Checklist
1. Answer the question “Why do we want to change the organization?”
Have a clear vision or goal for your Agile transformation you can communicate throughout the entire organization.
2. Gain buy-in
You cannot create lasting change without including the entire organization. Have open and honest conversations with your teams, leaders, and peers to gain their willing participation.
There are many ways organizations go about their Agile implementations. How do you know which is the best Agile transformation option? We’ve reviewed nine different ways organizations of all sizes from varying industries are implementing Agile to help you make the right decision.
To make this Agile implementation guide, we considered the following:
Size of the transformation
Investment (cost, effort, time)
Necessary skill level
Commitment of the leadership team
Get the guidance you’ve been looking for. This infographic weighs the pros and cons of each Agile implementation option, from hiring an internal expert to partnering with experienced Agile consultants.
The current rate of disruption and the increasing amount of global competition all contribute to what we now call a “VUCA” world:
Volatile – Speed, magnitude, turbulence, and dynamics of change
Uncertain – Unclear about the present and hard to predict the future
Complex – Multiple interdependencies amongst a globally interconnected world
Ambiguous – Lack of clarity of the meaning of events
Organizational agility allows you to respond quickly to this unpredictable world. Without it, you risk being overwhelmed by the rate of change.
What is Organizational Agility?
Organizational agility focuses on leadership teamwork and the alignment of every part of the organization around a shared understanding of major vision, goals, and working principles in order to deliver value quickly and efficiently.
Benefits of Organizational Agility
Focus and clarity
An engaged workforce
Speed to adapt to market
7 Steps to Implement Organizational Agility & Excel in a VUCA World
1. Leadership Maturity
Management styles are changing from the old methods to a more modern, Agile management.
2. Culture Maturity
Agile emphasizes alignment across the organization, allowing you to let go of old priorities (i.e. strict processes and control) and embrace higher values.
3. Throttle Demand to Match Throughput
Look at throughput in terms of how much work your organization can do at once and then sequence the work to deliver value the fastest.
“I cannot say whether things will get better if we change; what I can say is they must change if we are to get better.” — Georg C. Lichtenberg, German Philosopher and Physicist
If your organization is just starting out on the Agile journey, alignment to Agile business initiatives is the first stage in the Path to Agility®. Leaders should to look across the breadth of their organization and ask, “Do I have the right people and the right expertise in place to make the transition to becoming Agile?” This question helps leaders identify their organization’s readiness to undertake the Agile transformation. It also creates an initial roadmap to begin the transformation by identifying the three main areas of the organization that will be impacted: key Agile roles, shifts in leadership, and new approaches to management.
Successfully navigating change across these three core areas are the cornerstones of implementing the Agile approach.
3 Things to Consider When Transitioning
It’s not enough to have ready and willing employees–they must also be able. Companies considering moving to Agile need to know beforehand exactly what is involved in the transformation to ensure they have the right people in place to make a successful transition. Inside the Agile transformation, there will be new roles for both key employees and leaders, and there will be many new duties for most people within the organization.
Prior to undertaking an Agile transformation, leaders should understand three key elements of how the change will impact their organization:
New Agile Roles. Leaders will have to identify fundamental roles that might not exist in the organization, and where these roles will come from. Oftentimes, these roles require employees to learn a new set of skills.
Leadership. Leaders and the entire executive team must be at the forefront of spearheading change.
Adaptation. Leadership must be willing to adapt to changing management styles, as well as develop new skills that fit within the Agile framework.
Undertaking the Agile Transformation: New Agile Roles
There are two key Agile roles within a transformation that often are challenging to fill because they typically don’t exist prior to an Agile implementation:
Let’s take a closer look at both roles.
The primary function of the Product Owner is prioritizing a team’s backlog of work. This critical step allows teams to consistently deliver on its highest-value items. The Product Owner role is essential to success–without it, teams lack clear focus and won’t be successful.
Where does this role come from? For companies in the software development space, this role typically aligns to product management roles. Existing product managers may assume additional Product Owner duties. However, organizational leaders need to be aware of how adding extra work to those people’s plates impacts their current duties. Ensure they have enough bandwidth to take on the Product Owner role or be prepared to hire new team members to handle this extra layer of interaction.
Companies in the IT enterprise sector typically lack strong Product Owner functions, so it may be a completely new role for those organizations. There is some debate about whether the Product Owner role should come from the business side or the technology side of an organization. We believe it can come from either, so long as Product Owners have these three things:
Time to work closely with a team on a daily basis
Talented ScrumMasters are leaders, facilitators, and motivators rather than drivers and taskmasters. The primary responsibility of the ScrumMaster is to facilitate the exchange of information, help teams decide what they can achieve in a given time frame, and ensure obstacles and barriers are eliminated that impede success.
More than 80 percent of all organizations that implement an Agile transformation adopt the Scrum methodology. Each team within your organization needs a ScrumMaster, and organizational leaders need to know that Scrum duties can consume up to 50 percent of an employee’s time. If companies have dedicated full-time ScrumMasters, those people typically work with multiple teams.
Now that we’ve identified the key Agile roles needed to implement Agile, let’s delve deeper into the two other primary aspects of an Agile transformation.
Undertaking the Agile Transformation: Organizational Change
Agile is much more than a process change at the team level. It’s a sweeping organizational change that impacts a company’s entire culture, leadership style, and behavior. These comprehensive transformations may require organizational changes throughout the ranks of management.
Leaders need to ask, “Do I have anyone in my organization with expertise in managing organizational change?” Typically, most executives lack organizational change management skills. Leaders might have to consider bringing in someone to help plan and manage the organizational changes who also can help develop organizational change expertise skills in key employees.
The key elements of organizational change include:
Effectively communicating change
Managing incremental rollouts of change
Keeping positive momentum going for change
These things are difficult to implement and handle successfully. Agile Velocity’s transformation roadmap outlines an organization’s Path to Agility®.
Undertaking the Agile Transformation: Change Management
The Agile transformation works best when there’s 100-percent buy-in from the top. Since an Agile transformation completely flips the switch and turns the organizational chart upside down, this can be a difficult path for companies to navigate.
Leaders often are required to adjust from a traditional top-down hierarchy style of management, in which they primarily control and delegate, to working with independent, self-organizing, and fully Agile teams. Leadership shifts to the teams closest to the problems, which may require some organizational restructuring and remodeling. These changes can create some identity crisis for certain leaders, especially front-line managers who might lose the teams with which they are directly linked. Leaders may need to consider making some management shifts in order to ensure change is embraced rather than impeded.
A big element of being Agile is understanding the necessary shifts at all levels of the organization and creating safety for leaders whose roles and duties will change. They often have to give up their teams or their “turf” and are given something new that might be out of their element. Leaders must ensure they manage these changes in an effective way and create safety for leaders, teams, and others within the organization.
This is how Agile transformation creates a different way of working and impacts the entire culture of an organization. Agile Velocity’s team of experts specializes in helping companies implement and successfully navigate this organizational change. You can learn more about our approach on our Transformation Services page.
It takes a village to make an Agile transformation successful in any company. Leaders who’ve decided to implement Agile often find they need data and success stories they can offer their peers so the entire leadership team understands, supports, and feels confident in the decision to transform. The following are talking points for you to share with your colleagues.
So, will Agile deliver? Yes!
In 2017, VersionOne’s 12th Annual State of Agility Report reveals that organizationsare seeing positive results in the areas they set out to improve when they decided to undergo an Agile transformation. In fact, “four of the top five reported reasons for adopting agile” are also reported to be the areas most-improved by adopting agile. These include:
Alignment between business leaders and departments
Agile organizations put heavy emphasis on transparency and communication between all levels of the business, allowing for clear alignment on goals and the quick removal of impediments.
Management of changing priorities within the business
The iterative nature of Agile accommodates for a business’ ever-changing priorities, giving leaders the time to reevaluate often and pivot in response to market changes as opposed to falling behind competitors.
Agile principles and practices increase productivity by limiting waste in the production system complexities, such as handoffs, dependencies, late integrations, etc. This results in the reduction of repeat work, defect costs, and failed initiatives because issues are uncovered earlier in the process.
An iterative release cycle also allows teams to release smaller, bite-sized chunks of a product more often. Instead of getting tied up in (incredibly) long-term plans, teams typically release products every 2-4 weeks. Once an organization becomes predictable like this, feedback loops are tighter, giving the organization the ability to give customers higher quality, more valuable products.
Agile has proven time and time again to bring benefits to every level of an organization. Thanks to these benefits, it has rapidly taken over software development and is now spreading to other departments from marketing to human resources and beyond. Today, results of an Agile transformation are branching out to include things like more leads, higher employee engagement, and more recruits.
How do you ensure a successful Agile transformation in your organization?
As with any aspect of business, when you understand and utilize best practices, you see more impactful results at a quicker rate. But don’t take our word for it–take it from others just like you.
For their 2017 report, VersionOne surveyed 1,492 people in Agile organizations from around the world and put together a list of their top 5 tips for success in Agile. These tips included:
1. Developing internal Agile coaches
2. Using consistent practices and process across all teams
3. Implementing a common tool across teams
4. Investing in external Agile consultants and trainers
5. Protecting your Agile transformation with an Executive Sponsor
Over time, we found leaders are more often than not looking for a way to make informed business decisions with confidence. Without a predictable cadence of delivery, organizations are usually flying blind when it comes to making decisions about sequencing work and planning for how those decisions will impact their market and the forecast of all initiatives in flight. Agile is helping companies across many industries solve these problems.
We hope this article provides you with a few key points to bring up to coworkers when chatting about Agile. If you’re interested in learning more about how we help organizations build lasting agility, check out our Agile Transformation Services page. We’ve incorporated these top 5 tips coupled with a focus on producing desired business outcomes into our approach to ensure lasting organizational change.
In this webinar, Mike and Bryan discussed different tactics and practices that organizations can take as they begin to scale agility across the organization. You can find the webinar summary and Q&A transcription below.
There are a number of really good Agile scaling frameworks out there–SAFe, DAD, LeSS, Enterprise Scrum, etc. Some can appear overly complex and scary at first glance.
Start simple. Don’t immediately align with any specific framework. There are some common best practices that most of the scaling frameworks out there recommend, so just start there. Then evolve and grow over time by adding a bit more here and there as your organization’s needs dictate it.
5 Practices to Start Scaling Agile
Scrum of Scrums
Chances are you are familiar with the Daily Scrum that is held every day within the Agile Team, to synchronize efforts around the plan for today. Scrum of Scrums is a scaled version of the Daily Scrum – to ensure that the cross-team work is synchronized.
Product Owner Sync
The purpose of the PO Sync is to ensure alignment of the product vision and work-related content across all involved teams. SAFe and Scrum @ Scale scaling frameworks recommend this scaling event.
When multiple teams are working on the same program, it is important to establish the Program Backlog. The Program Backlog is created and maintained by the Program Manager role or perhaps even a Product Owner from one of the teams. The Program Backlog consists of features in priority order.
Dependency Identification and Scheduling
One of the biggest risks when scaling Agile is inter-team dependencies. To mitigate these risks, teams working on the same program should plan together (iteration planning and/or release planning) to identify the dependencies between teams.
Dependencies are bi-directional in that there is both a giver and a getter. To ensure visibility, each dependency should be tracked within the Team Backlogs as either a “Give” or a “Get” as shown in the diagram.
A “Give” is where one team provides a specific deliverable to another team on or before a specified date or iteration. A “Get” is where a team receives a specific deliverable from another team by the specified date or iteration. A “Get” user story will typically involve integration activities across teams.
Common Integration Environment
You will need to establish a common integration environment for multi-team programs. Ideally, this is done prior to iteration 1 to ensure demonstration of working software from the integration environment each and every iteration.
Typical activities in establishing a common integration environment include:
Continuous Integration (CI) tooling
Source code repository program mainline branch establishment
Test case automation
Automatic deployment migration from local to integration/staging environment
Questions from 5 Practices to Begin Scaling Agility Webinar
Where does the security testing occur on slide 14? Is it assumed to be part of the unit & validation tests?
Yes. In an Agile organization, security concerns need to be considered as we go within each iteration. This leads to unit testing and functional testing for the security requirements.
What is your recommended “planning” approach for a given development timeline (e.g. 6 weeks or 1 qtr)? Specifically, getting ahead of cross-team dependencies.
I recommend quarterly release planning with an emphasis on identifying dependencies and making them visible. SAFe has an excellent technique for this called the Program Board.
Are the % usage of SAFe vs LeSS vs others just in the US or across the world? I have heard the LeSS is more commonly used in Europe and possibly Asia.
The cPrime survey referenced received responses from all over the world.
Understanding there is a Scrum of Scrums (S2), what are your thoughts on scaling that further to a “Scrum of Scrum of Scrums” (i.e. – S3) or even an S4? We’ve seen this implemented to create sync points across multiple trains (S3) and value streams (S4). Thoughts on this?
Scrum of Scrums is definitely fractal and can be scaled up as needed. Specifically, a “Scrum of Scrums of Scrums” is useful in coordination of large solutions involving multiple programs (or Agile release trains) as you mention. I personally have never seen it beyond 3 levels (S3), but it is theoretically scalable to the nth degree.
What works best for Scaling, Scrum or Kanban?
Both can be scaled. Many Kanban teams take a “Scrumban” approach by including some best practices of Scrum–in particular, the Daily Scrum. Thus, scaling up to a “Scrum of Scrums” is a natural extension to the daily planning event.
If you’re looking to start a SAFe® implementation, we recommend starting with Leading SAFe® training. You can explore our public and private training options on our Leading SAFe® training page by clicking here.